Judge Mehta’s decision represents one of the most significant rulings against corporate monopoly practices in two decades and could fundamentally reshape the tech giant’s future.
The Justice Department called the remedies “significant.”
“We will continue to review the opinion to consider the Department’s options and next steps regarding seeking additional relief,” Assistant Attorney-General Abigail Slater said in a release.
However, Tuesday’s decision fell short of expectations from some observers who had anticipated more radical changes to Google.
“It sounds like the judge felt that it was too draconian to provide some of the remedies that prosecutors or the Department of Justice wanted,” professor Carl Tobias, of the University of Richmond Law School, said.
“Google is certainly not going to be broken up, and it’s not clear that its business model is going to change a whole lot.”
The US government had pushed for Chrome’s divestment, contending the browser serves as a crucial gateway to internet activity and facilitates a third of all Google web searches.
But in his ruling, Mehta warned that a Chrome divestiture “would be incredibly messy and highly risky” and said US attorneys had overreached.
The case focused on Google’s expensive distribution agreements, paying billions for Apple, Samsung, and other smartphone manufacturers to establish Google as the default search engine on iPhones and other devices.
‘Crippling’ effects
In his decision last year, Judge Mehta said Google’s default status on the iPhone allowed the company to evolve into an internet powerhouse, insulated from competitive threats.
But in a surprise move, Mehta on Tuesday said an outright ban of these deals was off the table, insisting that such a prohibition could have too profound an effect on other businesses.
“Google will not be barred from making payments or offering other consideration to distribution partners for preloading or placement of Google Search, Chrome, or its GenAI products,” the judge wrote.
Minutes after the decision, shares in Google parent Alphabet rocketed by 7.5% in after-hours trading. Apple’s stock rose by more than 3%.
“This is a monster win for [Apple] and for Google it’s a home run ruling that removes a huge overhang on the stock,” Dan Ives, of Wedbush Securities, said.
Under the judge’s order, Google must make available to “qualified competitors” search index data and user interaction information that rivals can use to improve their services.
The ruling also specifically addresses the emerging threat from generative artificial intelligence chatbots like ChatGPT, extending restrictions to prevent Google from using exclusive deals to dominate the AI space as it did with traditional search.
A technical committee will oversee implementation of the remedies, which take effect 60 days after the judgment is entered.
Offensive against Big Tech
Google faces another legal case, awaiting a federal court decision in Virginia regarding its web display advertising technology business. A separate judge ruled earlier this year that Google’s ad tech operations also constitute an illegal monopoly that stifles competition.
These cases are part of a broader government and bipartisan campaign against Big Tech. The US currently has five pending antitrust cases against major technology companies.
The original search engine case against Google, along with a separate case targeting Meta, originated during the first Trump administration in 2020.
The Biden administration maintained these prosecutions while launching additional cases against Apple and Amazon, as well as a second case challenging Google.
-Agence France-Presse
