In a major victory for Google, a US district court has ruled against the US government’s closely watched, hard-fought proposal to break up the tech giant as part of remedies in a landmark search antitrust case.
Judge Amit Mehta of the US District Court of Columbia on Tuesday, September 2, rejected the Justice Department’s proposal to force Google to spin out its popular Chrome web browser, among other ‘fixes’ suggested to unleash competition in the online search engine market that has been illegally monopolised by Google.
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 more equal 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.”
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The US court’s ruling also goes beyond how Google should remedy its search monopoly, delving into significant questions such as how search engines operate, what are the economics of browsers, and is AI already changing how people are looking up information online? Here are a few key takeaways from the decision.
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 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.
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“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 that the divestiture of Android if Google failed to comply with other remedies or if those remedies prove less effective than anticipated. The court rejected this proposal as well on similar grounds.
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Google’s search deals with 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 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 put consumer welfare at risk.
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 who raised concerns about the downstream effects of the ban on Google’s default search deals.
In its counter-offer, Google proposed dropping the exclusive terms of its search deals which would allow rivals to ink similar agreements if they can afford to. The court modified a few aspects of this proposal, ordering Google to give browser developers the option to reset the default search engine each year across devices and access points.