Last year, Judge Amit Mehta ruled that Google held a monopoly in the search engine market. This week, the court decided on an appropriate penalty, opting for a less severe measure than previously discussed, such as forcing Google to split off Chrome or Android. Instead, the court chose to impose restrictions that aim to open up the market to competitors without disrupting the company's entire ecosystem.
From now on, Google is prohibited from signing exclusive contracts that prevent other search engines from appearing in browser or smartphone settings. Additionally, Google is required to share part of its search index and user behavior data with competing companies. This move could help rivals improve their own search quality and close the gap to Google's services. However, advertising information stays off-limits, and the data transfer must occur at cost price, without generating revenue for Google.
The US Department of Justice (DOJ) had pushed for tougher action, including forcing Google to relinquish Chrome or Android. However, Judge Mehta determined that the connection between these products and Google’s search monopoly was not sufficiently direct. He noted that predicting the direction of technology is complex, referencing the rise of new competitors like ChatGPT and Perplexity, which are changing the market faster than the courts can respond.
As a result, Google remains intact, and its major agreements—such as those with Apple—stand. The key change is that default search cannot be exclusive to Google, giving other companies a chance to be chosen as default through deals with device manufacturers.
Markets quickly responded to the news, with Alphabet’s shares surging 10% after the verdict, signaling relief for investors who feared harsher measures. Apple also benefited, as its agreement with Google remains unaffected for now.
Many antitrust experts and politicians, however, argue the new rules don't go far enough. The DOJ is contemplating an appeal. The decision is neither a full victory for Google nor a game-changer for market competition, leaving many questions about the effectiveness of the remedies.
This case marks the first major antitrust lawsuit against a big tech company in the US in years. Similar investigations are underway against Meta, Amazon, Apple, and others. Another front in the government’s pursuit of fair competition targets Google’s dominant position in digital advertising, with the DOJ pushing for the company to divest some advertising assets to improve competitive conditions.
The technology sector is rapidly evolving, driven by artificial intelligence and significant investment. Judge Mehta emphasized the need for caution in landmark cases to avoid destabilizing the digital markets and harming consumers or businesses.
The long-term effects of the court’s decision will unfold over time. For now, the remedy is a compromise, highlighting the challenges facing future antitrust actions against tech giants and the ongoing debate over the adequacy of existing US antitrust laws.
