On September 2, Judge Amit Mehta issued his remedies decision in the Department of Justice’s monopolization lawsuit against Google’s search business. At this stage, the court’s goal was to restore competition in the markets that Google illegally monopolized, and Judge Mehta had a range of tools available to pry open a market that was frozen shut for over 10 years.
For its part, Google wanted the court to tread lightly, proposing that it only ban Google’s distribution agreements. In markets with expansive network effects, like general search, the court made clear that prying open competition is not as simple as prohibiting exclusionary conduct.
The Future of Internet Search
Judge Mehta spent most of his factual findings dedicated to “developments” in the market since the liability trial concluded in 2023. This came with a heavy emphasis on AI and the public’s adoption of large language models (LLMs) as a substitution for search. With an eye toward the future, Judge Mehta declared that “Google cannot use the same anticompetitive playbook for its GenAI products that it used for Search.” This was a big concession to the Department’s case, particularly its briefings in the run up to the remedies phase, where the government’s concern about competition in AI was an overriding theme.
Over Google’s objection, the court expanded the scope of remedies to include generative AI products. The court predicted these technologies will pose a threat to the primacy of traditional internet search. The court went so far to say that Generative AI products are already in a better position to compete with Google than any traditional search company has been in decades.
Against that backdrop, the court carefully crafted findings to prohibit Google from leveraging its dominance in general search to the AI product space. At every turn it expanded the parties’ proposals to include those AI products. For example, DOJ’s definition for the qualified competitors Google must syndicate data to was expanded to include Generative AI firms, not just search companies. Google’s proposals were expanded to bar the company from securing exclusivity for its GenAI products on browsers. The court even instructed Google to submit an expanded definition of Google Assistant to cover future AI products under development. The court’s laser focus on Generative AI is a clear indication that it viewed emerging technologies as the only path to dislodge Google’s illegal monopoly. As the court explained, Generative AI products such as Gemini and ChatGPT rely on search engines to “ground” the products by routinely incorporating into their responses fresh information from the internet.
Dodging Divestitures
The DOJ remedies proposals urged the district court to open the general search market with the heaviest tool available, structural remedies. Google ultimately dodged structural remedies – such as a forced sale of the Chrome web browser– after the court could not find that Google’s market dominance was sufficiently attributable to its illegal conduct. Notably, the court doubted whether a divestiture of Chrome truly constituted a structural remedy, given that the remedy might not dislodge Google from its market dominance. The court further reasoned that a divestiture was not appropriate, because “traditional” and “particularly appropriate” justifications for divestiture were absent, such as terminating monopolies formed by mergers and acquisitions.
Additional Core Remedies
Ban on Some Payments: The district court recognized that Google’s payments to distribution partners had the net effect of freezing the ecosystem in place, and banning such payments could bring about a “much-needed thaw” to encourage new entrants. The court even pointed out that such revenues were fruits of Google’s illegal conduct. But the court exercised caution out of concern that such a ban could harm downstream participants such as manufacturers, carriers, and developers. Paradoxically, the court ruled that Google may continue paying partners like Apple for default placement, so long as such deals are non-exclusive which raises more than a few questions. However, Google is barred from entering into exclusive distribution or default agreements for Search, Chrome, Google Assistant, and the Gemini app for six years.
Mandated Data-Sharing with Qualified Competitors: The district court found that Google’s distribution agreements allowed the company to achieve massive scale advantages, because the agreements prevented rivals from accessing user queries needed to effectively compete. To remedy that illegal conduct, the court ordered Google to make certain data available to qualified competitors but greatly limited the DOJ’s proposals.
Google is required to share portions of its search index data
Google is required to share some user-interaction data that associates queries and results with user interactions
Syndication: The district court found that syndication was a reasonable method of addressing the effects of Google’s anticompetitive acts and such sharing would enable qualified competitors to build their own search indexes and capacity. However, the court narrowed DOJ’s proposals, only requiring Google to offer search and search ad syndication services on ordinary commercial terms that are consistent with Google’s current syndication services.
Enforcement
A technical committee will be established to monitor Google’s compliance.
Remedies will be in effect for six years, starting 60 days after final judgment entry.
Google and the DOJ must submit a revised final judgment by September 10.
Bottom Line:
The district court seemed resolute that Google monopolized the market for general search services, but the court was hesitant in using all the available tools to restore competition in the market. Putting aside structural remedies, it seems strange that a company is found liable for conduct (i.e. payments to distributors) but still allowed to engage in the conduct. Allowing Google to continue making some version of the conduct that formed the basis of liability may indeed blunt the effectiveness of the remedies imposed, as the court even recognized. The court did make clear that it is prepared to revisit the proposed remedy on banning payments, if competition is not restored.
It will be critical for the DOJ and the district court to ensure that Google complies with the remedies, as the company already has asymmetrical expertise in the relevant market. Now, the devil is in the details. Google and the DOJ must come to baseline agreements on everything from terms of service definitions to the technical specifications of certain APIs- not an easy task. Taken on its face, many of the data governance mechanisms could be quite strong and open the market to disruptive innovation. However, Google has a history of gaming compliance to keep its data edge. Going forward, DOJ will have to adhere to Ronald Reagan’s maxim about the Soviets, “Trust but verify.”