FILE – In this Sept. 24, 2019, file photo a sign is shown on a Google building at their campus in Mountain View, Calif. Google is once again postponing a return to the office for most workers until mid-January 2022. The internet search giant is also to requiring all employees to be vaccinated once its sprawling campuses are fully reopened. (AP Photo/Jeff Chiu, File)
Under a blockbuster anti-monopoly court ruling on Tuesday over internet search, Google will not be forced to break itself up.
The Mountain View search and digital-advertising giant will not have to sell its wildly popular Chrome browser or globally pervasive Android cell-phone operating system, a federal court judge ruled.
But Google must stop cutting exclusive deals with other companies to make its search engine and other products the only available choices on consumers’ devices.
However, the judge allowed Google to pay companies to place its Search, Chrome and AI products on devices, including by pre-loading Google products as defaults when devices are first sold.
“Google’s monopoly has endured for more than a decade,” Washington, D.C. federal court Judge Amit Mehta said in his 226-page decision, adding that there has been “little meaningful market entry” to challenge the technology behemoth’s lock on search.
UC Berkeley law school adjunct professor and professional mediator Christopher Hockett, an antitrust expert, said the ruling’s remedies to Google’s monopoly appeared more “surgical” than many expected.
“Although it imposes significant changes in Google’s business, the company remains intact and can continue to pay for favorable distribution arrangements,” Hockett said Tuesday. “Of course we will have to see what happens on appeal.”
The U.S. Department of Justice, joined by nearly every U.S. state including California, sued Google in 2020, alleging in a court filing that the company’s search monopoly “caused significant, long-running harm to competition.”
The Justice Department and the office of California’s Attorney General did not immediately respond to questions about Mehta’s ruling, and whether they planned to appeal.
Critics alleged Google’s monopoly allowed the company to degrade search results.
The department and states asked Mehta to issue remedies that would strike deep into Google’s vastly lucrative business selling digital ads in connection with its search engine, a primary driver of profits for its parent company Alphabet that surpassed $100 billion last year. The plaintiffs asked Mehta to make Google sell Chrome, and, if the judge’s remedies failed to eliminate Google’s monopoly, unload Android later. Mehta shot down both proposals.
Mehta did approve the plaintiffs’ request to prohibit Google from exclusive contracts for distribution of Google Search, Chrome, its Google Assistant help-bot, and its AI chatbot Gemini.
The provision in Mehta’s ruling allowing Google to pay to have its products as default offerings on devices made the judge’s decision a “monster win” for Google and Apple, which have a multi-billion-dollar deal to make Google Search the default option on iPhones, said Wedbush Securities analyst Dan Ives.
“While in theory Google is barred from ‘exclusive deals’ for search,” Ives said in a note to investors, “this now lays the groundwork for Apple to continue its deal.”
Ives predicted the two iconic Silicon Valley firms would forge a significant partnership over use of Google’s Gemini on Apple products.
Apple and Google did not immediately respond to questions about how, if at all, the order might affect their deal, and how they might respond.
The American Economic Liberties Project, a non-profit dedicated to fighting monopolies, slammed Mehta’s ruling, saying the judge let Google “protect its monopoly,” and that his ruling should be appealed.
“The Court found Google liable for maintaining one of the most consequential and damaging monopolies of the internet era,” said the group’s executive director Nidhi Hegde. “This ruling leaves the public unprotected, crucial and evolving markets concentrated, and worse, sends a signal that will embolden monopolists everywhere.”
Under Mehta’s ruling, Google will also have to provide certain search and user data to competitors at minimal cost.
The remedies are to last six years, and Mehta said he would adjust them later after hearing from Google and the plaintiffs on certain elements.
Google said in a statement Tuesday that it had concerns about how the remedies limiting distribution of services and mandating sharing of data with rivals would affect users and their privacy.
“We’re reviewing the decision closely,” Google said.” 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 U.S. Justice Department in a statement Tuesday celebrated the remedies ordered by Mehta.
“For years, Google accounted for approximately 90 percent of all search queries in the United States, and Google used anticompetitive tactics to maintain and extend its monopolies in search and search advertising,” the department said. “Using its monopoly profits, Google bought preferential treatment for its search engine and created a self-reinforcing cycle of monopolization — shutting out potential competitors, reducing innovation, and taking choice away from American consumers.”
The department’s antitrust chief, assistant attorney general Abigail Slater, said the department would “continue to review the opinion” and consider possible “next steps regarding seeking additional relief.”
Mehta’s order appeared to quash an unsolicited offer made by San Francisco AI startup Perplexity, which proposed, before the ruling, to buy Chrome from Google for $34.5 billion.
Underlying the legal saga over Google’s search monopoly was another huge anti-monopoly case, against Microsoft, when the federal government accused the company in 1998 of breaking antitrust laws by packaging its Internet Explorer browser with its Windows operating system. A federal judge’s order to break up Microsoft was overturned on appeal in 2001.
Check back on this developing story.
Originally published at Ethan Baron