Google avoids court-ordered breakup as AI revitalizes competition

One year after ruling that Google illegally maintained a monopoly in online search, U.S. District Judge Amit Mehta rejected a Department of Justice proposal that would have forced Google to sell its Chrome web browser and Android mobile operating system. Mehta also rejected a proposed outright ban on the multibillion-dollar revenue-sharing payments Google makes to firms like Apple for status as the default general search engine (“GSE”) in browsers and operating systems.  

The court’s Sept. 2 decision bans the search giant from certain exclusive deals with browsers and mobile operators that tie the use of products like Google Play to other offerings. Google was also ordered to share certain data and search results with competitors. 

The trial’s eventful remedies phase, which unfolded in 2025, showed that innovation and competition in online search markets do not wait for judges. As the court was considering remedies, generative artificial intelligence (AI) disrupted Google’s core business, creating both threats and opportunities more significant than industry insiders who testified at trial had been aware of just a year before. In his order, Mehta underscored the need for “humility” when intervening in a market undergoing such radical changes. However, the timing of these events illustrates the limits of antitrust policy in markets driven by technology and rapid innovation. 

The Department of Justice and 11 state attorneys general filed suit against Google on October 20, 2020, in the final months of President Donald Trump’s first term. Alleging that Google monopolized the search engine market, the DOJ brought the case to trial in September 2023 in the D.C. District Court. In August 2024, Mehta ruled against Google (a ruling still under appeal separately from the newly filed appeal of the remedies).  

Central to Mehta’s ruling was Google’s use of large revenue-sharing payments for status as the default search engine on browsers and mobile phones. The DOJ asserted in its complaint that: 

Google pays billions of dollars each year to distributors—including popular-device manufacturers such as Apple, LG, Motorola, and Samsung; major U.S. wireless carriers such as AT&T, T-Mobile, and Verizon; and browser developers such as Mozilla, Opera, and UCWeb—to secure default status for its general search engine and, in many cases, to specifically prohibit Google’s counterparties from dealing with Google’s competitors.

These payments totaled $26.3 billion in 2021. “Time and again,” wrote Mehta in his August 2024 decision, “Google’s partners have concluded that it is financially infeasible to switch default GSEs or seek greater flexibility in search offerings because it would mean sacrificing the hundreds of millions, if not billions, of dollars that Google pays them as revenue share.”  

After the 2024 ruling against Google, both sides submitted proposed remedies to the court.  Unsurprisingly, the lists vary dramatically. Google proposed several targeted restrictions on the deals it can make for default status with browsers, operating systems, and wireless carriers. The DOJ, in contrast, proposed a long and varied list of penalties, which included forcing Google to sell off its Chrome internet browser now and threatening the forced sale of mobile operating system Android in five years if “either or both monopolized markets have not experienced a substantial increase in competition.” 

Mehta rejects the DOJ’s structural remedies, appropriately criticizing them as a “poor fit” for the case. The DOJ argued that because Google gives itself default status on its internet browser (Chrome) and mobile operating system, Android, forced sales would open these coveted spots to the type of competition previously restrained by revenue-sharing deals. Mehta accepts this possibility but finds that the DOJ ignores the costs of such a plan, particularly to consumers. The forced sales would be “incredibly messy and highly risky,” he wrote, imposing great cost not merely on Google but on Chrome and Android’s many consumers. 

Mehta also stops far short of the ban on multibillion-dollar default payments proposed by the DOJ. This part of the ruling is somewhat surprising given the 2024 liability decision’s focus on precisely these revenue-sharing payments as the primary illegal means by which Google maintained a monopoly. The bulk of Google’s multibillion-dollar payments to Apple, for example, are expected to survive the ruling. 

Mehta accepted that fully eliminating the payments—a “staggering” $26 billion in 2021—would serve the goal of more competition between search engines. He was concerned, however, about the potentially massive downstream effects of halting the payments, including the loss of smaller browsers like Mozilla, a less robust Android ecosystem, and more expensive mobile phones. 

Mehta does ban the exclusivity provisions featured in some previous Google contracts that tied various products, such as the Google Play store and Gemini AI assistant, to the use of others. The decision also requires Google to share data and search results with certain competitors, an attempt to mitigate the competitive advantage of Google’s scale and resulting access to information. 

The procompetitive effects of the remedies approved by Mehta are straightforward in theory. Search engines other than Google will have greater access to be the default status on browsers and mobile phones. The gap in data between Google and other search engines will be reduced through sharing. But this is no longer a path of development that any firm is likely to take.  

“The emergence of GenAI changed the course of this case,” wrote Mehta. “No witness at the liability trial testified that GenAI products posed a near-term threat to GSEs. The very first witness at the remedies hearing, by contrast, placed GenAI front and center as a nascent competitive threat.” 

Generative AI applications powered by large language models are not pure substitutes for search engines, but the interplay between the two technologies, a process still very much underway, has created avenues for competition that few people knew possible just a year ago. Google now finds itself in a highly competitive environment, not because courts or regulators pried open competition, but because innovation opened new opportunities and ultimately new markets. 

Rapid and unexpected disruption of this kind is the norm in 21st-century technology-driven markets. Conversely, five-year trials (still pending multiple appeals) are the norm in antitrust. The timing of these events in the case vividly illustrates a fundamental problem with using antitrust law to create and implement policy: Technology-driven markets change more rapidly than courts can reach and implement decisions.  

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Source: https://reason.org/commentary/google-avoids-court-ordered-breakup-ai-revitalizes-competition/