What if antitrust regulators forced Google to sell Chrome?

Sundar Pichai stands in front of a group of screens displaying the Google Chrome logo.
Sundar Pichai stands in front of a group of screens displaying the Google Chrome logo.
Image: REUTERS/Stephen Lam
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What would happen if Google were forced to sell off Chrome?

As the tech giant faces mounting antitrust scrutiny in the US, federal and state prosecutors are reportedly considering splitting Chrome off from Google as a way to address their monopoly concerns. The popular browser, which carries roughly two-thirds of global web traffic, is a key piece of Google’s strategy to entrench its search engine as the world’s default and cement its grip on the digital advertising market.

But a Chrome sale wouldn’t just impact Google’s business. It would affect everything from digital privacy to the shape of the digital ad market—impacting consumers and businesses alike.

Experts in data security, online marketing, and the business of tech warn that those wide-reaching impacts would depend on who Chrome’s new owner would be. If the buyer is a rival tech giant like Microsoft or Oracle, regulators might just be transferring the monopoly from one company to another.

The fate of cookies

One of Chrome’s most distinguishing features—aside from its ubiquity—is that it’s the last major browser that doesn’t block third-party cookies by default. These cookies are packets of information that advertisers can use to follow users as they navigate the web, carefully targeting them with ads based on their behavior. Chrome’s biggest competitors, Safari and Firefox, already block third-party cookies (although smaller competitors like Opera and Microsoft Edge still don’t).

In January, Chrome announced it would follow suit and block tracking cookies—but not for another two years. The browser’s foot-dragging probably has something to do with the fact that Google’s ad business still relies on those cookies, says Danny O’Brien, the director of strategy at the privacy-focused Electronic Frontier Foundation. By setting a two-year deadline to sunset cookies, Chrome gives other teams at Google time to develop new tools to target ads.

“It would be hard to claim that there’s somebody hanging over every Chrome developer’s keystrokes saying, ‘You can’t block ads,’” O’Brien said. “But I think there are incentives for other browser-makers to encourage [blocking third-party cookies] far more than you would see at an in-house web browser built by the world’s largest ad network.”

If Chrome were sold, a new owner might make a different decision about cookies, depending on its business model. Safari was free to ditch them sooner because online ads aren’t one of Apple’s core revenue streams. But whether the browser goes to a competitor like Oracle or Microsoft, or spins off into its own company, it’s not guaranteed that the new boss would treat privacy much differently than Google.

Disrupting the digital ad market

A new Chrome owner might make a strategic choice to position itself as a privacy-focused browser and speed up cookies’ demise—or it could become a friend to digital publishers and keep cookies alive. After all, says MIT marketing professor Sinan Aral, as disruptive as nixing cookies would be for Google’s business, it would wreak far more havoc for third-party advertisers and the websites that depend on them for revenue.

By Google’s own estimates (pdf), its decision to cut cookies will cause digital publishers to lose more than half of their revenue from programmatic ads. For news websites, Google estimates that the figure will rise closer to two-thirds. Take that estimate with a grain of salt: Google put those numbers out when it was trying to justify its earlier decision not to block cookies, and publishers quibble with how dire the impact would actually be. But no one argues that it wouldn’t be at least somewhat disruptive.

Aral points out that owning the world’s most popular web browser gives Google an opening to snoop on users’ browsing activity in new ways, even if third-party cookies fade away. The company’s competitors in the digital ad market don’t have that power.

“Google says ‘We’re phasing out third-party cookies out of privacy concerns,’ but really what that does, given that they control Chrome, is shut everyone else out of the information that cookies provide about where people go online,” Aral said. “It also makes it harder for publishers to measure the effect of digital ads on their own, making them more reliant on Google.”

Again, if Chrome were split off from Google’s advertising business, a new owner might make decisions about cookies that help competing ad vendors and online publishers—but it all depends on how the new parent company plans to monetize the browser.

Rewriting Google’s business plan

Spinning off Chrome wouldn’t be as easy as it might seem, cautions Michael Cusumano, a deputy dean at MIT’s Sloan School of Management who has written several books about the inner workings of Silicon Valley businesses. Breaking off any piece of the Google empire would challenge its business model in which all services are free to use and supported by ads.

“I don’t know how you could do that with Google,” he said, “because its only revenues essentially come from advertisements, and the advertisements are tied to the search engine, and the search engine is tied to the browser, and the browser is tied to Android.”

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The close ties between Google’s products, which all come together to nudge more people to use its search engine, was at the center of US prosecutors’ antitrust lawsuit against the company. Cusumano says pulling Chrome out of the picture could weaken Google’s dominance on search, making its advertising less valuable and cutting its revenues.

To make up the difference, Google might consider, for example, charging smartphone manufacturers to use its Android operating system—which would be a fundamental change in Google’s approach to its business.

“Google has never charged for software. Its whole thing is that these are all free services and advertisers pay,” says Cusumano—a model adopted by most other major tech players, including Facebook. A Chrome split-off, in other words, could be a warning shot for one of Silicon Valley’s favorite business models. “If we want to have a government attack on that business model,” says Cusumano, “we’d have to really think it through carefully.”