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A let-off or tougher than it looks? What the Google monopoly ruling means

Shutterstock / A Google business logo on an office building in midtown Atlanta, Georgia

Shutterstock / A Google business logo on an office building in midtown Atlanta, Georgia

In the modern internet era, few monopoly cases have been as closely scrutinised in Silicon Valley - and beyond - as the US government's landmark case challenging Google's dominance in online search.

Not since US v Microsoft, filed in 1998, has Big Tech felt so threatened.

But a year after ruling that Google was "a monopolist," Judge Amit Mehta proposed a series of remedies that some - though not everyone - view as letting Google off lightly.

Here's what you need to know.

Google avoids worst case scenario

The prospect of a company breakup loomed large during the remedies phase of the case. Ultimately, Judge Mehta decided not to force Google to spin off Chrome, the world's most popular browser, as government lawyers had requested.

The US Department of Justice had also proposed court oversight of the company's Android operating system to ensure the company refrains from using its ecosystem to "favour its general search services and search text ad monopolies."

Both Chrome and Android emerged unscathed in Judge Mehta's ruling.

"[T]hose were the mechanisms for gaining share, for preventing the emergence of new competitors, and for monetizing its search monopoly," said John Kwoka, an economics professor at Northeastern University.

Regulators will have another shot at forcing a break up later this month in the remedies phase of a different antitrust case the US government is mounting against Google -- over its dominance of advertising technology.

AI is key

The Department of Justice filed this case against Google in 2020. Back then, few consumers had ever heard of, let alone used, generative artificial intelligence (AI).

"The emergence of GenAI changed the course of this case," Judge Mehta wrote in his ruling, noting how swiftly money has flowed into the emerging technology.

The pace of change has only accelerated in the year since he concluded that Google is a monopolist in online search.

Although Google is a major player in AI -- often posting AI responses at the top of search results -- Judge Mehta said companies in that space can mount the kind of financial and technological threat against Google that traditional search companies couldn't.

The judge found himself in an uncomfortable spot: asked "to predict the future of a rapidly changing market rather than merely look at historical facts," said Jennifer Huddleston, a senior fellow in technology policy at the conservative-learning think tank the Cato Institute.

That's "not a judge's forte," Ms Huddleston added, which is why Judge Mehta may have been especially cautious as he issued potential solutions to Google's search monopoly.

Big win for Big Tech?

While most Wall Street analysts seemed to agree that Judge Mehta's ruling was a major win for the tech industry, the judge did order some remedies that could make a difference, according to experts.

For example, Google must share certain data with "qualified competitors" as deemed by the court.

This will include portions of its search index, Google's massive inventory of web content that functions like a map of the internet.

The judge will also allow certain competitors to display Google search results as their own in a bid to give them the time and resources they need to innovate.

The judge is allowing Google to continue to pay companies like Apple and Samsung for distribution of its search engine on devices and browsers, but will bar Google from maintaining exclusive contracts.

That means partners will have more leverage to bail out of those deals or partner with alternative companies.

"The remedies the judge has ordered could be meaningful," said professor Rebecca Hay Allensworth, an antitrust expert at Vanderbilt Law School, adding that averting Google's worst-case scenario doesn't make Judge Mehta's ruling "a real win" for the tech industry.

After all, she says, Judge Mehta was bound by the Microsoft case in which an appeals court struck down a judge's push to break up that monopoly.

"It was always going to be an uphill battle to try to get this judge sitting in this court to do the thing that his colleague was rebuffed for doing" more than two decades ago, Ms Allensworth said.

Author: Lily JamaliNorth America Technology Correspondent, San Francisco

Source: BBC News:

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