How Google’s AI Edge Is Shaping the Landmark Antitrust Battle Over Search Monopoly

Federal Judge Weighs Google’s Search Monopoly and AI Edge

The federal judge tasked with determining measures to limit Google’s monopoly in online search is carefully evaluating the company’s advantage in artificial intelligence (AI). His goal is to craft a resolution that addresses market dominance without causing undue harm to other industry participants.

On Friday, in the US District Court in Washington, attorneys representing Alphabet Inc.’s Google and the Justice Department responded to Judge Amit Mehta’s final inquiries in the government’s antitrust case. The judge faces a pivotal decision: whether to break up Google to reshape the internet’s search landscape or to enforce more targeted remedies. Mehta has indicated he aims to issue a ruling by August.

Justice Department’s Proposed Remedies

The Department of Justice (DOJ) has proposed that Google divest its widely used Chrome web browser and share certain data it collects for search results. Additionally, the DOJ seeks a ban on Google paying for default search engine placement on devices—a restriction that would extend to Google’s AI products like Gemini. The government argues that these AI advancements benefit from Google’s illegal monopoly in search.

Judge Mehta’s initial questions to the government centered on whether limiting Google’s role in generative AI is an appropriate way to tackle its search dominance. He also considered forcing Google to share key data with competitors and banning payments for default search engine status on devices.

“Do you think someone will leave the sidelines and build a new general search engine given what we are seeing in AI?” Mehta asked. DOJ lawyer David Dahlquist responded, “Yes, we believe these remedies will create that opportunity. The focus on generative AI is because it is becoming the new access point for search.”

Exclusive Agreements and Market Impact

A central issue is Google’s multibillion-dollar agreements with Apple and other device makers that secure default search engine status. Google’s attorneys argue that banning these payments would disadvantage consumers, browser companies, and device manufacturers, effectively benefiting large rivals like Microsoft.

Google’s counterproposal would allow revenue sharing with competing browsers. However, Mehta expressed concern about the broader market impact. “Every distribution partner said this would harm them, some even said it could put them out of business,” he noted. “Is it acceptable to fix one market and harm others?”

Dahlquist acknowledged the risk of private harm but emphasized the public interest in restoring competition. The judge explored whether exceptions to the payment ban might work; the government rejected this, noting even Apple executives showed some openness to the proposals despite potential revenue loss.

Google’s Defense and the AI Factor

Google argues the DOJ’s proposals are excessive, potentially harming consumers, the economy, and US tech leadership. It maintains that its search dominance results from decades of innovation and superior service.

Lead Google lawyer John Schmidtlein urged the court to focus remedial actions strictly on the illegal conduct identified, cautioning that broad remedies—especially those affecting generative AI products—could radically reshape the market. Still, Mehta signaled skepticism, suggesting AI-related remedies are likely under consideration.

“Simply opening distribution avenues without forward-looking remedies won’t suffice to foster real competition,” Mehta commented. Schmidtlein countered that generative AI products fall outside the relevant search market and have not been harmed by Google's conduct since they did not exist at the time.

The Existential Threat to Traditional Search

AI chatbots pose a significant threat to traditional search engines by providing direct answers rather than lists of links. During the trial, representatives from AI companies reported being blocked by Google’s contractual restrictions. For example, Perplexity’s executive Dmitry Shevelenko testified that Google’s agreement with Motorola prevented the smartphone maker from setting Perplexity as the default assistant.

“Motorola can’t escape its Google obligations and so cannot change the default assistant,” Shevelenko explained.

Competition Concerns Regarding Chrome

The DOJ also proposes that Google sell Chrome, the most popular browser in the US, arguing this would increase competition. Dahlquist noted that 35% of Google’s total queries originate from Chrome, making it a key part of the search ecosystem. Apple’s Safari is Chrome’s only real rival, and it also defaults to Google search.

AI startups like OpenAI and Perplexity have expressed interest in acquiring Chrome if divestiture is ordered. However, Mehta raised doubts about whether such a sale would genuinely enhance competition. He highlighted risks such as the new owner favoring its own search product or simply reinstating Google search by default.

Dahlquist outlined a scenario where the new Chrome owner could accept payments from multiple companies for default search placement, initially including Google (without payments), with the possibility of payments resuming later under restrictions.

Google warned that divesting Chrome would create a diminished product disconnected from its integrated ecosystem. “Chrome was built with blood, sweat, and tears over many years,” Schmidtlein said, emphasizing its dependence on other Google services.

Despite Google’s objections, Mehta described the Chrome divestiture as “cleaner, more elegant, and less speculative” compared to other remedies. Schmidtlein disagreed, citing uncertainty about the buyer and noting that companies like OpenAI are developing their own browsers.

Balancing Competition with Market Stability

Judge Mehta made clear he is not seeking to cripple Google but to support emerging competitors. “We want to kickstart competition, not put everyone on equal footing immediately,” he said.

As the case moves closer to a decision, the court’s approach to integrating AI considerations with traditional antitrust remedies will be critical in shaping the future of search and digital markets.

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