When U.S. District Court Judge Amit Mehta prepares to decide whether to split the company's most profitable business into part of an antitrust trial, Google (GOOG, GOOGL) massive search empire faces its biggest existential threat.
Mehta heard the ending arguments from Google and the Department of Justice (DOJ) during the remedial phase of the antitrust case, during which both sides opposed the company’s opposition and the huge changes to the company.
The Justice Department prevailed during the initial liability phase of the trial, and Mehta found that Google violated the antitrust laws of “general search” and “general search text” ads in the market that appeared at the top of the search results page.
During the remedial phase, the Justice Department believes that Mehta should force Google to sell its Chrome browser, share its search data with its competitors, and kill its exclusive protocols to ensure Google is the default search engine on mobile devices and web browsers.
Google has said it will have initial discoveries about its initial discovery as an illegal monopoly, but the process may take years before the company and the Justice Department reach a final resolution.
Google still has to compete with another antitrust trial that has reached a remedial phase related to its online advertising technology business. U.S. District Court Judge Leonie Brinkema also found Google responsible in April when the Justice Department filed against the company.
In this case, Brinkema found that the Justice Department proved that Google held and abused its monopoly in the market to provide open web display ads for publishers’ advertising servers and advertising exchanges. But Brinkema found that the Justice Department failed to establish a relevant market for the advertising network, the department's third round for Google.
If Mehta agrees with the Justice Department's advice, Google will have to fundamentally change its current search business. Its Chrome browser is the most popular web browser in the world, thanks to its inclusion in Android phones, which make up most of the smartphones around the world.
Chrome Losing Chrome, which uses Google as the default search engine, may cut Google off from users. Forced companies to end exclusive contracts with other tech companies will also affect Google and its partners.
For example, Google has reached an agreement with Apple (AAPL) that sees Google paying Apple $20 billion a year in exchange for Apple's use of Google as the default search engine in Safari browser.
In 2024, Apple reported full-year service revenue of $96.1 billion. Cutting $20 billion from it will make Apple's bottom line occupy a lot of money.
Google believes the Justice Department recommended remedies go too far and they will only help competitors such as Microsoft and its Bing search engine, while hurting device manufacturers and forcing them to raise prices for consumers.
The lingering in the background is the continuous development of generative AI and its impact on the search market. The Justice Department initially filed a lawsuit in 2020 that Chatgpt has upended the tech industry, creating new competitors like Chatgpt Search, Confusion and Humanity’s own Claude Search Bot.
During the search antitrust trial, Eddy Cue, senior vice president of services at Apple, said the search query in Apple's Safari browser was the first in April, adding that he believed users were moving their query to a generated AI application.
However, Google disputes the claim, saying it continues to see growth in its products, including on iOS devices. The company also released its own competitively generated AI product, including an AI overview, which appears at the top of its search results page and in AI mode, similar to ChatGpt, allowing users to interact with Google through a chatbot interface.
Mehta is expected to provide his findings at a remedy hearing in August. At the same time, Google must also prepare for remedies in ad trials.
Alexis Keenan is a legal journalist at Yahoo Finance. Follow Alexis on X @AlexiskWeed.
Send an email to Daniel Howley at dhowley@yahoofinance.com. Follow him on X/Twitter @Danielhowley.
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