The Department of Justice (DOJ) has taken a new approach to the Trump administration’s plans to break up Google. However, it will not make the tech giant sell its AI investments, which contradicts the Biden administration’s stricter stance on Google’s AI assets.
President-elect Trump and former president Joe Biden barely agree on most matters, but the two opposites seem to attract effortlessly when it comes to breaking up Google. This move could reshape the entire tech world, as Google’s resources, like Chrome, serve as the backbone for search engines on most devices.
However, an apparent disparity emerged in a court filing last Friday, revealing what each administration intends — and what it might mean — in breaking up Google. The Biden administration was all-in on forcing Google to divest its AI investments last year, including its stake in Anthropic. This could both undermine Google’s revenue and put countries, such as China, ahead of the game in advancing AI.
The Trump administration, however, decided to back off on Google’s AI investment — a move that business law professor Mark McCareins says is major and justified.
Google’s share in Anthropic, OpenAI’s rival, is worth billions, and Boston College Law School associate law professor David Olson says the government’s decision to withdraw the sale order shows just how much the race with China on advancing AI is growing tense by the day.
The effects of the entire plan to dismantle Google are already visible as Alphabet, Google’s parent company, saw its stock drop by more than 4% on Monday.
Judge to rule on Google’s monopoly as DOJ pushes for breakup
Last August, a ruling by Amit Mehta exposed Google as an illegal monopoly in online markets for general search and search text ads. The company would use unfair tactics to block competition by paying billions to giant brands like Apple, Samsung, and Mozilla to make Google the default search engine on their devices and browsers. These deals give users a hard time when they attempt to switch to competitors like Bing, DuckDuckGo, or Yahoo.
Google also stacked its search engine with the Chrome browser and Android operating system so that Google Search remains the first and easiest choice for all users. When it came to controlling general search text ads, Google would make it difficult for advertisers to run successful ad campaigns on competitors. And since the company owns most of the search traffic online, businesses have no choice but to buy ads from Google ads and abandon any rivals.
Concerns also arose over Google’s alleged misconduct in pushing its competitors lower in search engine rankings, which made them less visible or attractive to users.
Federal judge Amit Mehta will again decide the fate of Google’s empire, worth over $2 trillion, but whatever her ruling, Google will fight back with an appeal, and so can the DOJ. The court allowed the government and Google to submit remedies that would resign the Biden administration’s proposal to break up Google by Friday, March 7. The hearings to discuss these remedies are set for April and May.
However, despite Google’s concerns about national security that would result from disbanding Google Chrome, the DOJ did not alter its decision. Instead, it stated that Google must divest its Chrome browser so that new competitors can get a fair share of the market and free themselves from the company’s monopoly.
The DOJ also did not completely rule out the possibility of forcing Google to sell off its Android OS in the future. While they did not demand an immediate sale, they kept the option open for revisiting if they later discovered that Google’s control over Android is much more harmful to competitors than they imagined.
DOJ drops AI divestiture but adds monitoring as a workaround
Prosecutors dropped the Biden administration’s request for Google to sell its rights in AI and instead proposed a workaround where federal authorities would monitor the investments that threaten competition. Anthropic also made its case before the judge, explaining that if Google were to relinquish its stake, OpenAI and its sponsor, Microsoft, would take advantage of this uneven playing field and monopolize their services.
In its revised proposal on Friday, the DOJ stated that it no longer demands that Google disband its AI investments. However, an antitrust expert at Gunster, Derek Mountford, noted that while this decision is a concession, there are conditions tied to it. He suggests that the DOJ still wants reports on Google’s AI activities, despite rolling back the proposed sanctions, to ensure it achieves strict monitoring and control.
Chamber of Progress CEO Adam Kovacevich stated that Google plays a key role in the fight for the future of AI between the US and China. “What are we going to do, hobble one of our main US runners in that race by breaking up that company?” inquired Kovacevich.
Trump DOJ targets Google’s default search deals
The DOJ requested the judge block Google from signing contracts that make its search engine the default on devices like Apple and Samsung phones and popular browsers, including Apple’s Safari and Mozilla Firefox. If the judge grants this request, Apple could lose a huge revenue stream because Google pays the company billions per year for default search placements. In 2021, Google dished out a total of $26 billion for default search payments, with Apple receiving the largest share.
Google fought back on Friday by arguing that it should still be allowed to make these deals so long as it does not condition manufacturers to distribute or promote its AI Gemini Assistant. Northwestern law professor McCareins stated that the DOJ is using the case against Google as a bargaining tool because it will likely face appeals.
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