DOJ Google Antitrust Case Wraps With Generative AI in Spotlight

The US Justice Department’s proposed fixes for Google’s illegal monopoly in the online search market are more likely to spur competition than the remedies offered by the company, an economist called by antitrust enforcers testified in the government’s landmark trial against the tech giant.

The department’s “remedies will have a better chance of restoring competition,” said Tasneem Chipty, an economics expert for the government. “Google’s remedies will tend to preserve Google’s monopoly.”

Chipty testified for several hours before Judge Amit Mehta as the DOJ’s final witness before the government rested its case. Mehta ruled last year that the tech giant illegally monopolized the search market, and he is overseeing a three-week trial in Washington to consider a package of changes proposed by antitrust enforcers.

The Justice Department has asked that Google be forced to sell its popular Chrome web browser and share some of the data it collects to create its search results. It has also asked Mehta to ban Google from paying for search engine defaults — a bar that would also apply to Google’s AI products, including Gemini, which the government says were aided by the company’s illegal monopoly in search.

Bloomberg Intelligence antitrust analyst Jennifer Rie said it’s unlikely that Mehta will ultimately order a sale of Chrome though the Justice Department has done a good job of demonstrating why a divestiture is needed and how it could be accomplished.

The government finishing its presentation of testimony and evidence marked the halfway point in the remedies trial. On Tuesday afternoon, Google began making its case that the DOJ’s proposals are too extreme. The company has already asserted that the remedies would hurt America’s consumers, economy and position as a world leader of tech. Alphabet Inc. Chief Executive Officer Sundar Pichai is expected to testify in the coming days, as is Google’s search boss, Liz Reid.

Read More: Google Is Twice a Monopolist. Fixing It Will Be the Hard Part

A significant portion of the trial has focused on the burgeoning field of generative AI, which witnesses and the Justice Department say could become a new access point to the web in the way that browsers and smartphones operate today. AI chatbots are already seen as an existential threat to traditional search engines, as they can address users’ questions directly with AI-drafted responses — replacing the need to present people with a long list of search results pointing across the web.

The Justice Department is “showing that Google is well-positioned to do the same thing with Gemini that it did with search,” Rie said. “The DOJ has done a good job showing that AI products are not necessarily taking over for general search engines, but instead work in conjunction with them.”

The Justice Department called a slew of high-profile tech executives, including OpenAI’s Nick Turley, Perplexity’s Dmitry Shevelenko, and DuckDuckGo’s Gabriel Weinberg, to the stand to describe what they said were Google’s harmful business practices and how the proposed remedies would break up the monopoly.

Three company representatives — from OpenAI, Perplexity and even Yahoo — said they would be interested in buying Chrome if Google were forced to divest it. And one of Google’s browser rivals, DuckDuckGo, has even given an eye-popping sale estimate of “upwards of $50 billion” for Chrome based on its vast user base, according to court testimony.

During the trial, Shevelenko said that Google’s contract with Lenovo Group Ltd.’s Motorola blocked the smartphone maker from setting Perplexity AI as the default assistant on its new devices. Motorola “can’t get out of their Google obligations and so they are unable to change the default assistant on the device,” the Perplexity executive said.

Chipty, the DOJ’s economics expert, also testified Tuesday on the risk that Google could take advantage of generative AI’s popularity to distribute its search services and get around potential court-ordered remedies.

“You could imagine, for example, that Google might pay distributors to pre-install a Google Gemini on the home screen of Android devices, kind of like it’s done today with the Google search,” Chipty said. “And if something like that would be permissible, it’s possible to expect that we find ourselves in the same situation today.”

To contact the reporters on this story:
Davey Alba in New York at malba13@bloomberg.net;
Leah Nylen in Washington at lnylen2@bloomberg.net

To contact the editors responsible for this story:
Sarah Frier at sfrier1@bloomberg.net

Peter Blumberg, Steve Stroth

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