Google avoids breakup in landmark US antitrust case: Key takeaways on Chrome, AI, search deals

Last year, the same court had ruled that Google had an illegal monopoly of the online search engine market. The case then entered the remedies phase, where Judge Mehta heard arguments from both Google and the DOJ on the most appropriate ways to address the tech giant’s anti-competitive behaviour and create a level-playing field for other search competitors.

The remedies trial lasted for roughly 15 days in May this year. It saw testimony from several key witnesses including Google CEO Sundar Pichai, senior Apple executive Eddy Cue, representatives from OpenAI and Perplexity, among others.

The 230-page decision lifts a cloud that has hung over Google and its AI ambitions, particularly in online search, since it lost the antitrust case last year. For Silicon Valley, more broadly, it possibly highlights how the regulatory climate is shifting under the pro-business Trump administration which has taken a friendlier approach toward tech companies compared to its predecessor.

“This decision marks an important step forward in the Department of Justice’s ongoing fight to protect American consumers. Under President Trump’s leadership, we will continue our legal efforts to hold companies accountable for monopolistic practices,” US Attorney General Pamela Bondi said in a statement.

Stating that the decision reflects how much the industry has changed through the advent of AI, Lee-Anne Mulholland, vice president, Regulatory Affairs, Google, said, “We have concerns about how these requirements will impact our users and their privacy, and we’re reviewing the decision closely.”

In some respects, the US court’s ruling goes beyond how Google should remedy its search monopoly, delving into fundamental questions such as what does it take to build a Google Search-level search engine? Who can buy and run Chrome? And is AI already changing how people are looking up information online? Here are a few key takeaways from the judgment.

‘Breaking off Chrome, Android would go too far’

In one of its more drastic proposals, the DOJ had urged the court to direct Google to sell off its market-leading web browser Chrome as well as Chromium, the open-source platform underlying Chrome and other web browsers. Several tech firms including OpenAI and Yahoo had expressed interest in taking Chrome off Google’s hands, with AI search startup Perplexity making an unsolicited bid of $34.5 billion for the browser last month.

However, the court held that the proposed Chrome divestiture remedy was a “poor fit for this case” as legal precedence suggests that such measures were ordered only in cases where less severe remedies would likely prove inadequate.

“Plaintiffs have not shown that their behavioral remedies will be ineffective without the immediate divestiture of Chrome,” it said. The court also held that forcing Google to sell Chrome would be unreasonable as it has built it from the ground up and invested billions of dollars in the browser. Additionally, the Chrome divestiture would impact users outside the geographical scope of the case as 80 per cent of Chrome’s monthly active users are located outside the US.

It would be incredibly messy and highly risky because Chrome does not run as a standalone business and depends on Google for a host of administrative functions such as financing, marketing, back-end systems, engineering personnel, etc, as per the ruling. Even if Chrome was bought by a new owner, the court said that it is “highly skeptical that a Chrome divestiture would not come at the expense of substantial product degradation and a loss of consumer welfare.”

“That concern extends to the Chromium open-source project and other Chrome-based products,” it added. CEO Sundar Pichai, who once led the team that created the browser, had similarly testified that no other company was equipped to maintain Chrome and Chromium the way Google has.

The DOJ had also proposed the divestiture of Android if Google failed to comply with other remedies or if those remedies proved less effective than anticipated. The court rejected this proposal as well on similar grounds.

‘Ban on search deals will hurt distributors’

As part of its proposal, the DOJ argued that Google should be prohibited from making exclusive search deals with smartphone makers and browser developers for default placement of its search engine. For instance, the company reportedly pays Apple $20 billion every year to make Google Search the default search engine on iPhones.

The court’s initial antitrust ruling had also held that Google became too powerful because it could afford to be the default search engine everywhere. However, in its remedies ruling, the court declined to impose this ban over concerns that it would negatively impact distributors and consumer welfare in various ways including higher prices, less innovation, and less competition.

It also held that such a ban would end up giving Google an advantage, at least in the short term, as “distributors will have no real alternative because Google is the best search provider” and will likely remain the default search engine. The court made this decision based on testimonies from representatives for Apple, Samsung, Motorola, Mozilla, Opera, and others.

In its counter-offer, Google had proposed dropping the exclusive terms of its search deals which would allow rivals to ink similar agreements with distributors, if they could afford to. The court accepted this remedy with a few modifications, ordering Google to give browser developers the option to reset the default search engine each year across devices and access points.

‘Emergence of AI changed course of this case’

A lot of time was spent talking about AI during the remedies trial. The search antitrust lawsuit against Google was filed in 2020. Two years later, OpenAI’s ChatGPT burst onto the scene. Eddy Cue, a senior VP at Apple, testified in court that search volume to its Safari browser had declined for the first time in 22 years. Notably, he linked the drop in search volume to the rise of AI chatbots like ChatGPT.

During the hearings, Google contended that the shift in user behaviour was already making the search market more competitive. The DOJ obviously disagreed with this, pointing out that the company could use the same anticompetitive playbook for default placement of its AI products. Google is reportedly paying Samsung an ‘enormous sum’ to have its Gemini AI chatbot preinstalled on devices.

In its ruling, the court held that AI chatbots have not eliminated the need for traditional search engines as their functionality only partially overlaps. It also prohibited Google from securing “exclusivity for its GenAI products on browsers or a Browser Developer’s device.”

Judge Mehta also specifically prohibited Google from entering into an exclusive agreement with Apple “to distribute any Google GenAI product either in any Safari mode or on any Apple mobile or desktop device.”

‘Data-sharing can help close quality gap’

While the court rejected most of the DOJ’s proposed remedies, it did adopt a few of them albeit in narrowed form. It ordered Google to make certain search index data available to rivals at a marginal cost. “Making data available to competitors would narrow the scale gap created by Google’s exclusive distribution agreements and, in turn, the quality gap that followed,” Judge Mehta wrote.

However, the court has limited the definition of search index to “databases that store and organize information about websites and their content that is crawled from the web.” It does not include, for instance, databases that store information “gathered from data feeds” and “collected via partnerships.”

The court also directed Google to offer search and search text ads syndication services to enable its rivals to deliver higher-quality search results and ads. These search syndication services will be made available under five-year licences, as per the ruling.