In response to a U.S. antitrust ruling, Google (Alphabet Inc.) has proposed modifications to its agreements with Apple (AAPL) and other companies regarding the default search engine settings on new devices. This proposal aims to address concerns raised by a U.S. District Judge who ruled that Google holds an unlawful monopoly in online search and related advertising.
The tech giant’s new proposal seeks to loosen its search deals, but it is far narrower than the U.S. government’s recommendation, which includes a drastic suggestion for Google to divest its Chrome browser. Google, in court filings, called the government’s request excessive and warned that such intervention could hinder innovation within the search market. The company urged Judge Amit Mehta to proceed carefully in determining what measures should be taken to restore competition, especially given the rapid advancements in artificial intelligence (AI) that are transforming the way users interact with search engines.
Google plans to appeal the ruling but has emphasized that the “remedies” phase of the case should focus specifically on its distribution agreements with browser developers, mobile device manufacturers, and wireless carriers. These agreements, according to Judge Mehta, provide Google with a substantial and largely invisible advantage over its competitors. Many devices in the U.S. come preloaded with Google’s search engine, a practice that the judge argued is particularly hard for Android manufacturers to bypass, as they must agree to install Google Search to access the Google Play Store.
To address these concerns, Google proposed making these agreements non-exclusive. This would allow Android phone manufacturers more flexibility and potentially unbundle Google’s Play Store from Chrome and Search. Additionally, Google offered to give browser developers the ability to reassess their decision to set Google as the default search engine annually, further reducing the long-term exclusivity of the agreements.
However, Google’s proposal does not include ending its revenue-sharing agreements. These deals, which share a portion of Google’s ad revenue with device makers and software companies that make Google their default search engine, are vital for many independent browser developers like Mozilla (maker of Firefox). For example, Apple is estimated to have received approximately $20 billion from its search deal with Google in 2022 alone.
Critics, including Kamyl Bazbaz, spokesperson for search competitor DuckDuckGo, argue that Google’s proposal fails to restore true competition. Bazbaz stated that any remedy should not only stop illegal conduct but also foster innovation and market competition. His statement highlights the ongoing concern that Google’s market power stifles the ability of competitors to improve their products.
The proposal sets the stage for a trial in April 2024, where the U.S. Department of Justice and several state coalitions will present their case for more aggressive antitrust remedies. These could include forcing Google to divest its Chrome browser and possibly the Android operating system. In court documents, the government also suggests that Google should cease paying for default search engine positions and stop investing in rivals or query-based AI products. They argue that these changes are necessary to foster competition in the online search market and prevent Google from using its dominance to extend its reach into AI-driven search technologies.
As the case progresses, all eyes will be on how the courts balance Google’s significant role in search innovation with the need to preserve competitive practices in the digital marketplace. For more on Google’s antitrust case, visit the U.S. Department of Justice’s official page and read updates on Google’s antitrust developments.