A federal judge on Tuesday spared Google from a breakup after ruling that the tech company’s online search business is a monopoly.
US District Judge Amit Mehta, in a 230-page ruling, barred Google from having exclusive contracts for its Google Search, Chrome, Google Assistant, and Gemini app products as part of his remedy to the more than $2 trillion company’s monopoly in search.
But the ruling fell short of some of the most contentious demands from the US government. The Washington, DC-based federal judge said Google would not have sell off its Chrome browser or Android operating system.
Shares for Alphabet, Google’s parent company, jumped more than 6% in after-hours trading.
Though Mehta ordered Google to end its exclusive search engine deals, the judge said Google could still strike non-exclusive deals to make its search engine, Chrome browser, and generative AI products the default choice on other platforms, like smartphones and internet browsers.
“Cutting off payments from Google almost certainly will impose substantial — in some cases, crippling — downstream harms to distribution partners, related markets, and consumers, which counsels against a broad payment ban,” Mehta wrote.
Additionally, Mehta ruled that Google share search index and user-interaction data with certain competitors to “deny Google the fruits of its exclusionary acts,” but said it will have to share less information than the Justice Department requested.
In the order, Mehta remarked that while Google remains the dominant player in online search, the legal landscape shifted during the case with the introduction of generative artificial intelligence.
The judge said he crafted the remedies “with a healthy dose of humility.”
“Unlike the typical case where the court’s job is to resolve a dispute based on historic facts, here the court is asked to gaze into a crystal ball and look to the future,” Mehta wrote. “Not exactly a judge’s forte.”
Google’s decision to make Google Search the default search engine on Chrome, not its ownership of the browser, contributed to its monopoly power, Mehta found.
Forcing Google to sell off Chrome after it had invested billions of dollars into building the browser would be the wrong remedy and “incredibly messy,” the judge wrote in the ruling.
“Chrome does not run as a standalone business. At the most basic level, it depends on Google for a host of administrative functions, such as finance, marketing, and human resources,” Mehta said.
The judge ruled the order will remain in effect for six years.
The order can be paused during the appeals process, which could drag on for years. Google previously vowed to appeal Mehta’s original ruling deeming the tech giant a monopolist.
“Today’s decision recognizes how much the industry has changed through the advent of AI, which is giving people so many more ways to find information,” Google said in a statement following the ruling. “This underlines what we’ve been saying since this case was filed in 2020: Competition is intense and people can easily choose the services they want. That’s why we disagree so strongly with the Court’s initial decision in August 2024 on liability.
“Now the Court has imposed limits on how we distribute Google services, and will require us to share Search data with rivals,” the statement continued. “We have concerns about how these requirements will impact our users and their privacy, and we’re reviewing the decision closely. The Court did recognize that divesting Chrome and Android would have gone beyond the case’s focus on search distribution, and would have harmed consumers and our partners.”
The DOJ said in a statement that “the Justice Department’s Antitrust Division won significant remedies in its monopolization case against Google in online search.”
“The court’s ruling today recognizes the need for remedies that will pry open the market for general search services, which has been frozen in place for over a decade,” the DOJ added. “The ruling also recognizes the need to prevent Google from using the same anticompetitive tactics for its GenAI products as it used to monopolize the search market, and the remedies will reach GenAI technologies and companies.”
In a landmark ruling last year following a 10-week non-jury trial in 2023, Mehta found that Google violated US antitrust law by maintaining a monopoly with its online search business.
“Google is a monopolist, and it has acted as one to maintain its monopoly,” Mehta wrote in the ruling at the time.
The legal showdown pitting the tech behemoth against the Department of Justice and a coalition of states sparked the biggest monopoly ruling since Microsoft faced a potential breakup nearly 30 years ago. In that case, a federal judge in 2000 ordered Microsoft to be split up, but the ruling was later reversed on appeal.
As part of its proposed remedies for Google, the Justice Department had asked Mehta to force Google to sell off its Chrome web browser, end its exclusive multibillion-dollar deals with Apple, Mozilla, Samsung, and others to make Google the default search engine on web browsers and smartphones, and share search data with rivals. Chrome is the world’s most popular web browser.
The Justice Department wanted the court to force Google to break off its Android mobile operating system if the search market doesn’t experience an increase in competition through its sweeping proposed fixes.
The remedies hearing, which began in April and lasted for three weeks, saw testimony from Alphabet CEO Sundar Pichai, who argued that the DOJ’s proposed fixes amounted to a “de facto divestiture” of Google’s search business.
Pichai warned in his testimony that the government’s proposals would have “many unintended consequences.”
Artificial intelligence firms OpenAI and Perplexity have previously floated their desires to buy Chrome should Google be forced to divest Chrome.
“If Chrome is really going to sell, we should take a look at it,” OpenAI CEO Sam Altman recently told a group of reporters.
Last month, Perplexity offered up $34.5 billion to buy Chrome. Search.com and Yahoo also expressed interest.
In an opening statement during the remedies hearing, a Justice Department lawyer said the court must prevent Google from using its search monopoly to dominate the AI market.
“Unless Google’s vast payments are eliminated, Google will likely win each search distribution opportunity, given the tremendous advantages it has accrued from over 10 years of monopoly maintenance,” DOJ lawyers wrote in a post-trial May court filing.
In a series of posts on X after the remedies hearing ended in May, Google said the DOJ’s proposals went “miles beyond” the judge’s decision and “would harm consumers, businesses, and America’s tech leadership.”
“We still strongly believe the Court’s original decision was wrong, and look forward to our eventual appeal,” Google said in a post.
“I think that Google will have good arguments on appeal about why those remedies are inappropriate,” Neil Chilson, a former acting chief technologist at the FTC and the head of AI policy at the tech nonprofit Abundance Institute, told Business Insider.
When Microsoft faced a breakup over an antitrust case in 2001, an appeals court ultimately overturned the order that would have broken up the company — an outcome Chilson said he believes could happen here, as well.
Meanwhile, Google still has more antitrust headaches ahead.
A Virginia federal judge ruled in April that the company holds an illegal monopoly in certain online advertising technology markets. A remedies hearing in that case is set to begin in September.
Read the full article here
