Last week Google released Chrome, its long rumored and long anticipated internet browser. For some time now, Google has enjoyed the leading market share amongst internet search engines and internet advertising. Many viewed its foray into the browser market to be inevitable. The free open source browser is clearly intended to compete with Microsoft’s Internet Explorer, which currently controls around 70% of the browser market. It will also be in direct competition with Mozilla’s Firefox, another free browser that, with funds and talent provided by Google, has gradually been chipping away at Microsoft’s market share, and with which Google recently extended until 2011 a deal to be Firefox’s default home page and search engine. Google has already drawn complaints from Microsoft and other internet advertising companies, as well as attention from the Justice Department for its commanding presence in the internet advertising market. While the focus is presently on Google’s advertising dominance, the unveiling of Chrome poses a new threat to Microsoft, not only by introducing an alternative to Internet Explorer, but possibly by also paving the way for a future alternative to the Windows operating system.
With the launch of Chrome, Google has taken another huge step towards having a presence in almost every aspect of a user’s internet experience. Already, it has a plethora of internet applications including email, chat, video sharing, word processing, spreadsheets, calendar, and social networking sites. Its burgeoning array of internet services is quickly beginning to resemble a complete operating system; consequently, some are speculating that Chrome is Google’s backdoor way of making Microsoft’s Windows OS obsolete by replacing pc-based applications with applications on the web. As of now, Microsoft enjoys a virtual monopoly in operating systems, but the proliferation of web-based programs is rapidly decreasing its necessity. Chrome integrates Google’s web-based applications, which can be run offline using Google Gears, regardless of what operating system is used. The combination of Chrome, Gears, and Google’s applications could conceivably make the OS irrelevant by allowing users to boot to a “foundation” OS that launches Chrome as a “gateway to the Google ecosystem.” One need only to point to all that Google has developed in a few short years to show that such a possibility is not so farfetched. Microsoft may soon be surprised to find the greatest threat to its OS market share comes from a company that began with search engines.
If this is in fact Google’s strategy, Chrome coupled with Google’s dominance in the search engine market could elicit the same antitrust examination that Microsoft has previously endured, but only if the FTC manages to pinpoint the exact market that Google is monopolizing, and even then, is probably only likely if Chrome manages to gain a significant share in the browser market. The legal definitions of markets aren’t going to be as simple to apply to an innovation like Chrome, which performs multiple functions, or, for that matter, to any new development that arises from the convergence and division of technologies.
Chrome will undoubtedly help drive innovation on the web by increasing the competition in the browser market. According to one antitrust expert, it will be the consumers who are the winners because the spurred competition will lead to the development of more new and sophisticated features and better, faster service. Microsoft and Firefox have each affirmed their eagerness to welcome Chrome as an impetus to increase innovation and to develop faster, more stable versions of their current browsers. While Microsoft is seeking to appear confident in its ability to prevail as the market leader, even with the challenge of fresh competition, its ability to compete may still be strapped by court oversight resulting from the federal antitrust case (.pdf) regarding Microsoft’s annihilation of Netscape in the 90s.
Google has the advantage of not being subject to the same legal restrictions as Microsoft, which is restrained from tying its browser to its search engine, but its past legal attacks may come back to haunt them. It was just over a year ago that Google unsuccessfully sued Microsoft over its Vista desktop search that used the Windows/MSN browser. Such petty litigation on the part of Google will only encourage Microsoft to take a close look at whether Google’s linking of its browser, search engine, and other applications crosses any legal boundaries. Although Chrome offers the option of replacing Google as the default search engine, when the design of Chrome’s combination browser and search bar is taken into consideration, the argument can be made that this is itself an analogous form of “bundling” comparable to that which got Microsoft into hot water. The concern has been raised that integrating the browser and search bar, coupled with Google’s advertising supremacy, may eventually result in the diversion of users from where they specifically wanted to go to a page of Google search results and Google advertisements. The end result would be that Chrome is no longer provides neutral access to the internet. If it is determined that the FCC’s net neutrality principals apply to applications as well as service providers, Chrome’s design could attract the attention of the Department of Justice for something other than advertising.
Microsoft has previously complained about Google’s dominance in online advertising. In mid July, its general counsel went before a congressional committee to complain about Google’s latest advertising deal with Yahoo, claiming that “never before in the history of advertising has one company been in a position to control prices on advertising on up to 90% of advertising in a single medium.” People may scoff at the irony that now Microsoft is the one trying to point the monopoly finger, but the merit of its accusations has recently been confirmed by the Justice Department’s hiring of litigator Sanford Litvack to coordinate a possible antitrust challenge to Google’s internet advertising supremacy. The good (and bad) news for Microsoft is that the advent of Chrome diminishes the likelihood of future antitrust suits against itself by demonstrating that entrance into the “market,” however one chooses to define it, is not impossible and, if Chrome proves to be successful, that competition is not stifled. While Chrome may not succeed in making Windows and IE completely obsolete, it may make future arguments for a Microsoft monopoly more difficult to make.
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