In a major shift, former President Donald Trump’s Justice Department has diverged from the Biden administration’s stance on Google’s antitrust case. While both administrations agree that Google should be broken up, the Trump administration has made a significant change by allowing Google to retain its investments in artificial intelligence (AI), including its stake in the AI company Anthropic, which is a rival to OpenAI.
This adjustment, announced last Friday, marks a departure from the Biden-era request to force Google to divest its AI holdings. Mark McCareins, a business law professor at Northwestern University’s Kellogg School of Management, called the move “significant” and “very justified,” pointing out that it might be a strategic decision aimed at preventing the U.S. from falling behind China in the global AI race. David Olson, an associate law professor at Boston College, echoed this sentiment, suggesting that the government might be concerned about stifling technological advancements that are crucial to international competition.
The change in direction came as Google’s parent company, Alphabet, saw its stock price drop more than 4% on Monday, alongside a broader decline in tech stocks due to macroeconomic concerns. The fate of Google’s $2 trillion empire rests with federal judge Amit Mehta, who ruled in August that Google had illegally monopolized the online search market. Judge Mehta’s ruling has set the stage for hearings in April and May to determine the appropriate remedies.
A key aspect of the case is whether Google should be forced to sell off parts of its business. While the Trump administration’s proposal retains the idea of Google divesting its Chrome browser, it softens the Biden administration’s stance on the Android operating system and removes the call to divest Google’s AI investments. The new proposal suggests that the government could still monitor Google’s AI investments for potential anti-competitive impacts on the search market.
In court filings, Anthropic has argued that forcing Google to sell its AI stake could unfairly tip the balance in favor of OpenAI and its backer, Microsoft. In response, the DOJ clarified that it no longer seeks a mandatory divestiture of Google’s AI holdings but will instead impose reporting requirements to ensure that future investments in AI do not undermine competition in search.
While the Trump administration’s shift may appear as a concession, antitrust expert Derek Mountford noted that it comes with a caveat. “They’re asking for some reporting requirements to be attached to it,” he said, emphasizing that the administration may still retain significant control over Google’s AI ventures.
Amidst ongoing debates over how to handle Google, the Trump administration faces the complex challenge of balancing antitrust enforcement with maintaining a competitive edge in the global AI race. Adam Kovacevich, CEO of Chamber of Progress, raised concerns that breaking up Google could weaken the U.S.’s position in the AI competition. He argued that weakening one of America’s most powerful tech companies might be poorly timed in the context of global technological advancements.
The DOJ’s proposals also include measures to block Google from entering into search engine default contracts with major companies such as Apple, Samsung, and Mozilla. These contracts are highly lucrative for Google, and a change in their structure could severely impact Apple, which relies on revenue from Google’s search placement agreements. In 2021, Google paid Apple approximately $26 billion for default search placements, a figure that analysts estimate could account for up to $20 billion in annual revenue for Apple.
In response, Google has pushed back, arguing that it should still be able to enter into search licensing contracts but without requiring device manufacturers to distribute or promote its AI products, such as its Gemini Assistant Application.
As the case moves forward, McCareins suggested that the Justice Department’s proposal to divest Chrome could simply be a negotiating tactic. Since the underlying case is still subject to appeals, the Trump administration may be using this demand to strengthen its bargaining position in future discussions with the judge.
With hearings set for later this year, the fate of Google’s business practices—and the future of competition in the tech world—remains uncertain. The case continues to raise critical questions about the balance between antitrust enforcement and fostering innovation in an increasingly competitive global marketplace.
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