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Google Proposes Loosening Search Deals to Address U.S. Antitrust Ruling

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Alphabet’s Google has offered a proposal to loosen its agreements with Apple and other partners that set Google as the default search engine on new devices. The move aims to address a U.S. District Court ruling that found the company unlawfully dominates the online search market.

Google’s proposed remedies focus on its distribution agreements with device manufacturers, browser developers, and wireless carriers. These agreements were deemed by U.S. District Judge Amit Mehta to give Google an unfair advantage over competitors, with the judge citing their exclusivity as a barrier to competition.

To address these concerns, Google suggested making its agreements non-exclusive and allowing browser developers to revisit their default search engine choice annually. For Android device manufacturers, the proposal includes unbundling Google’s Play Store from its search engine and Chrome browser.

However, Google’s proposal stops short of addressing one critical element: revenue-sharing agreements. These deals, which provide device and software companies with a portion of Google’s ad revenue, are a significant part of the company’s dominance. In 2022, Apple reportedly earned $20 billion through its agreement with Google. Mozilla and other independent browser developers have argued that these payments are vital to their operations.

Kamyl Bazbaz, a spokesperson for DuckDuckGo, criticized Google’s approach, stating that it maintains the status quo. “The remedy must stop illegal conduct, prevent its recurrence, and restore competition in the affected markets,” he said.

The U.S. Department of Justice and a coalition of states have rejected Google’s proposal, arguing that more drastic measures, including divestitures of its Chrome browser and potentially its Android operating system, are necessary. They will present their case in an April trial, calling witnesses from Microsoft, OpenAI, and AI startup Perplexity to demonstrate the need for broader remedies.

The prosecutors also aim to stop Google from paying to be the default search engine, investing in search rivals or AI query products, and to mandate licensing of its search results and technology to competitors.

Google cautioned Judge Mehta to act cautiously, arguing that antitrust remedies should not stifle innovation, particularly as artificial intelligence is transforming online search and other digital products. “Courts have historically avoided imposing remedies that chill innovation,” Google emphasized in court filings.

The outcome of this case could reshape the online search market and influence the future of AI-driven products. For now, the stage is set for a high-stakes trial that will determine how deeply regulators can intervene in Google’s business practices.

 

DOJ Pushes for Google to Divest Chrome to Restore Search Competition

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Key Developments

The U.S. Department of Justice (DOJ) has proposed a series of sweeping measures to curb Google’s dominance in online search and advertising. These proposals, outlined in a Washington court filing, are part of a landmark antitrust case aimed at dismantling what prosecutors describe as an illegal monopoly in search, where Google controls 90% of the U.S. market.

The DOJ’s recommendations include:

  • Divesting Chrome: Google would be required to sell its popular web browser, which is a critical component of its ad-targeting ecosystem.
  • Ending exclusive agreements: The DOJ seeks to eliminate deals where Google pays billions annually to device makers, like Apple, to secure default search engine placement.
  • Potential Android sale: If other remedies fail, Google may have to divest its Android mobile operating system, which prosecutors claim has been used to cement its search dominance.

These measures would remain in place for up to a decade, monitored by a court-appointed technical committee.

Government Overreach or Necessary Reform?

Google has called the DOJ’s proposals “staggering,” with Alphabet Chief Legal Officer Kent Walker warning they could harm consumers, developers, and small businesses while jeopardizing U.S. global technological leadership.

The company argues that divesting Chrome and Android—both built on open-source platforms—would disrupt businesses that rely on these technologies to innovate. Furthermore, Google maintains that its search and AI products benefit users and companies alike.

Proposals for Data and Competition

Prosecutors aim to level the playing field through additional measures:

  • Data Sharing: Google would be required to license search results and share user data with competitors, including privacy-compliant data it currently cannot share.
  • AI Product Training: Publishers and websites could opt out of contributing data to train Google’s AI tools.
  • Restrictions on Acquisitions: Google would be barred from acquiring search, query-based AI, or advertising technology competitors.

These remedies are designed to dismantle what the DOJ describes as a “feedback loop” that entrenches Google’s market position through user data, search dominance, and advertising revenue.

Technical Oversight

A proposed five-member technical committee, funded by Google, would enforce compliance. The committee would have authority to access documents, interview employees, and review software code to ensure adherence to the court’s rulings.

Impact on Chrome and Android

Chrome, the world’s most popular web browser, and Android, a widely used mobile operating system, have been pivotal in Google’s strategy to prioritize its own search engine and products. Prosecutors claim these platforms have hindered competition, citing complaints from rivals like DuckDuckGo.

Google contends that forcing divestitures would harm innovation and argues that both platforms’ open-source nature has supported the development of competing products.

Next Steps

The DOJ trial for these proposals is scheduled for April 2024, with Google presenting its counterproposals in December 2023. The outcome of this case could reshape the online search landscape and influence regulatory approaches to Big Tech in the U.S. and globally.