Google Faces Historic Antitrust Battle as AI Challenges Loom in the Search Industry

On Monday, a lawyer from the United States Department of Justice underscored the need for Alphabet's Google to adopt robust measures to prevent the expansion of its dominance in online search through artificial intelligence tools during the opening of a historic antitrust case. This case holds the potential to fundamentally reshape the internet landscape, possibly replacing Google as the primary gateway to online information.

David Dahlquist, representing the Justice Department, stated, "It's time to tell Google and other monopolists that when you violate antitrust laws, you must face the consequences." This lawsuit is accompanied by efforts akin to those that dismantled AT&T, Microsoft, and Standard Oil in the past. Alongside the Justice Department, a coalition of state attorneys general is pursuing the divestiture of Google's Chrome browser and other actions to restore competitiveness.

Dahlquist emphasized that remedies proposed by the court should be forward-looking, recognizing changes on the horizon. Witnesses from Perplexity AI and OpenAI are expected to testify on the overlap between search technology and AI, and how Google’s dominance impacts their operations.

John Schmidtlein, a partner at Williams & Connolly, countered before U.S. District Judge Amit Mehta, suggesting that the Justice Department’s recommendations amounted to a “wish list” for those looking to benefit from Google’s innovative strides. He argued that AI competitors seek concessions, despite facing robust competition.

Google maintains that its AI products are outside the scope of this case, which centers around its search engine. In a blog post by high-ranking Google executive Lee-Anne Mulholland, the company argued that implementing the proposed remedies would "stifle American innovation at a critical juncture." Google plans to challenge the final ruling.

Antitrust enforcers have proposed sweeping measures intended to rapidly open the search market to allow emerging competitors a chance to breathe. Their recommendations include terminating Google’s lucrative agreements that make it the default search engine on devices like Apple's tablets and smartphones. Additionally, if other measures fail to restore competition, Google could be required to sell its Android mobile operating system.

Google argues that ending payments to device manufacturers and browser developers would raise smartphone costs and threaten the existence of companies like Mozilla. Google intends to call witnesses from Mozilla, Verizon, and Apple, with Apple having unsuccessfully attempted to intervene in the case previously.

This case, initiated during the Trump administration, part of broader antitrust scrutiny of major tech companies, continues under President Biden. The presence of Assistant Attorney General Gail Slater and other Justice Department antitrust officials in court signaled bipartisan support for the remedies being sought, representing full backing from both past and present Justice Department administrations, according to Dahlquist.