Will Alphabet Have to Divest the Chrome Browser? Maybe Not.

Alphabet might be forced by the Department of Justice and courts to sell off the  Chrome browser as part of a settlement of an antitrust case against Alphabet. The implications--if the settlement does include such a provision--are less clear than one might think, based on the pattern of the earlier Microsoft antitrust settlement that forbade bundling of the Internet Explorer browser with the Windows operating system.

Some will argue that the case opened the door for emergence of Chrome and other browsers. Others will note that the settlement pushed Microsoft to invest in other areas. Microsoft's move into gaming (Xbox) and cloud computing (Azure) are examples. 

Everyone might agree that there were few, if any, long term adverse financial impacts for Microsoft. 

And, since use of Internet Explorer was at no cost to users in any case, there was little if any direct negative revenue impact. 

It is conceivable that, if ordered, a divestiture of the Chrome browser business would have short-term negative revenue effects for Alphabet, but probably little to no negative long-term effect on the firm. 

Since ownership of Chrome might principally deliver the value of browsing data that aids Alphabet’s advertising business, the possibility exists that Alphabet would shift to licensing access to such data from the new owner. That would add a cost, but might not be debilitating. 

Alphabet equity valuation should drop, at least temporarily, one might argue, as that happened to Microsoft equity as well, after the antitrust ruling.  

Also, Alphabet might move to create different ways of optimizing its advertising business, using different methods. 

There arguably are other benefits, such as the ability to influence new standards, but those benefits are hard to quantify.  

Some might note that Alphabet’s advertising business faces market share challenges from Amazon, TikTok and others, in any case, and that Alphabet's ad market share is falling.  

And all that assumes the DoJ’s recommendations are accepted by the courts. That is not a certainty, and might not even be the court’s preferred remedy. We might note that the DoJ had asked for Microsoft to be broken up. The actual remedy was a ban on bundling Internet Explorer with the Windows operating system.