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During the final stage of the Justice Department’s antitrust trial against Google (NASDAQ:GOOG) (NASDAQ:GOOGL), U.S. District Judge Amit Mehta signaled uncertainty over how far the court should go in curbing the tech giant’s dominance in internet search, particularly as the industry undergoes major shifts driven by artificial intelligence, The Wall Street Journal reported on Friday.
Judge Mehta, who previously ruled that Google (NASDAQ:GOOG) (NASDAQ:GOOGL) holds a monopoly in search and used unlawful tactics to maintain it, pressed both government and company attorneys on whether remedies should address the company’s growing influence in generative AI through products like Gemini, its ChatGPT rival.
Generative AI is quickly becoming the new entry point to search, said DOJ attorney David Dahlquist, arguing that Gemini represents a strategic extension of Google’s (NASDAQ:GOOG) (NASDAQ:GOOGL) search monopoly.
Possible remedies to monopoly
Among the remedies proposed by the government are sweeping measures: divesting Google’s (GOOG) (GOOGL) Chrome browser, banning the company from paying Apple (NASDAQ:AAPL) to remain Safari’s default search engine and compelling Google (GOOG) (GOOGL) to share search data with competitors. The DOJ has pointed to legal precedents from its landmark case against Microsoft (MSFT) in the early 2000s as justification for these steps.
Google’s defense team pushed back, contending that the department hasn’t demonstrated that its contracts, such as the multi-billion-dollar deal with Apple (NASDAQ:AAPL), are the reason the company remains dominant, the Journal reported.
Google, which accounts for roughly 90% of the online search market, has proposed lighter remedies, such as loosening its exclusive arrangements with Apple (NASDAQ:AAPL), Mozilla and Android device makers to allow more competition. The company has said it will appeal any unfavorable ruling. Judge Mehta has indicated he plans to issue a decision in August.
Relationship with Apple
One area under close scrutiny is Google’s (GOOG) (GOOGL) relationship with Apple (AAPL). The search giant is said to pay the iPhone maker around $20 billion annually for default placement in Apple’s Safari browser. Changes to that arrangement could not only impact Google’s (GOOG) (GOOGL) dominance but also strip billions from Apple’s revenue (AAPL).
Mehta is also weighing whether to block similar deals Google (GOOG) (GOOGL) has made to preload Gemini on devices from Samsung and Motorola. The Justice Department argues this is an effort to lock up dominance in the next generation of search technology.
Meanwhile, shifting user behavior has already rattled Google (GOOG) (GOOGL). Apple (AAPL) executives testified that search queries on Safari have recently declined, a first in more than 20 years, while suggesting that users may soon have the option to choose AI tools like ChatGPT or Perplexity for certain queries.
In a response, Google (GOOG) (GOOGL) said it is seeing continued growth in search activity across Apple (AAPL) platforms. Still, the DOJ maintains that competitors need access to Google’s search data to effectively challenge Gemini. Mehta questioned whether AI platforms that don’t operate traditional search engines should be granted such access.
He also floated a number of alternatives during closing arguments, including the idea of conditioning a ban on Google’s (GOOG) (GOOGL) payments to distributors only if other measures fail. He even asked whether a forced sale of Chrome might be a simpler solution.
Google’s (GOOG) (GOOGL) lawyer, John Schmidtlein, rejected that notion, arguing that divesting Chrome would do more harm than good, with uncertain benefits.
Looking ahead, Google (GOOG) (GOOGL) Chief Executive Sundar Pichai has said the company hopes to finalize a new agreement with Apple (AAPL) this year that would allow Gemini to be used to handle user queries on Apple (AAPL) devices, mirroring the integration Apple (AAPL) already offers with OpenAI’s ChatGPT, the Journal reported.