Google can keep its existing investments in AI startups such as Anthropic, but it must notify antitrust regulators before further investing in AI companies.
The requirement was included in a revised proposal filed Friday by the U.S. Department of Justice (DOJ) as part of its ongoing landmark antitrust case against the firm in the search industry.
DOJ shifts approach to regulating Google’s AI influence
The content of the court filing represents a considerable change in the government’s approach to how pervasive Google’s influence has been on AI development.
Although the DOJ first aimed to make the tech firm divest from companies such as Anthropic, this proposal recognizes that an outright ban on Google participating in AI investments could lead to negative unintended consequences. However, the agency is still worried about the firm using its financial strength to guide the industry in anti-competitive directions.
The DOJ’s most recent brief captures the balancing act it is trying to achieve, as it attempts to regulate possible monopolistic behavior but also to acknowledge the novelty of the sector in question and the fast pace with which it is evolving.
Antitrust authorities seek to track and assess the tech giant’s market impact without abruptly derailing progress by forcing Google to alert regulators of future AI-related investments.
The DOJ said in its filing that preventing Google from investing in AI could have unintended effects in the AI space. The agency said letting the company keep its existing investments and just adopting a notification system provided a degree of oversight without prematurely stifling AI progress.
Regulators express concerns over Google’s market dominance and AI’s future
Despite the shift in approach, the Justice Department has largely retained its proposed remedies from its original November 2023 filing. These include recommending that Google be forced to divest its Chrome web browser and implementing measures to dismantle its control over search and advertising markets.
The DOJ underscores persistent concerns over the tech firm’s dominance in digital marketplaces by upholding its call for Chrome’s divestiture. Federal regulators argue that Google leverages its control over search and advertising to suppress competition, a claim that a federal court upheld last year.
Judge Amit Mehta ruled that Google illegally monopolized the online search and advertising markets, paving the way for a trial next month to determine the appropriate remedies.
Beyond search and advertising, the government is now focusing on artificial intelligence as a key battleground in the tech industry. With Google pouring billions into AI startups—such as its $3 billion investment in Anthropic—regulators worry the company could leverage these partnerships to tighten its grip on emerging technology markets.
This comes as other tech companies, including Amazon, continue to pour money into Anthropic, searching through the other AI cash piles more pressing. Anthropic also said that forcing Google to divest, under the DOJ’s initial November proposal, would harm competition in the AI industry by ripping apart an important source of investment and innovation.
Google has vigorously fought many of the DOJ’s proposals, calling them too aggressive and harmful to consumers and the economy.
Google responds as the industry reacts
Peter Schottenfels, a Google spokesman, stated on Friday that the department’s sweeping proposals extend beyond the court’s decision and would negatively impact American consumers, the economy, and national security.
The tech giant says that if it were barred from investing in AI startups or continuing with certain business deals, the U.S. would suffer a “comparative disadvantage” in the global race to build new artificial intelligence tools.
The company has also resisted other proposals that would prevent it from forming revenue-sharing partnerships with browser vendors and telephone manufacturers, saying it should be able to continue to have such arrangements as long as they do not become exclusive.
The DOJ could seek to break up Google’s search and browser businesses. This disruptive step would change not just Google but the face of the Internet, similar to the antitrust breakup of AT&T in the 1980s.
The new mandate that companies notify the government of their investments in artificial intelligence could serve as a model for curtailing tech giants’ increasing grip on technology.
While the legal fight plays out, interested parties, including nascent AI start-ups, incumbent tech companies, and regulators, have been paying close attention to the court’s ruling and its implications for digital marketplaces and AI development going forward.
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