Google Wins Legal Battle, Avoids Chrome Divestment, Faces Exclusive Agreement Ban

In a significant legal victory for Google, a federal judge in Washington, D.C., ruled that the tech giant would not be required to sell its Chrome browser. However, the court prohibited Google from entering into exclusive agreements that could solidify its market dominance. The ruling stated that the plaintiff's request to force the divestment of these key assets was excessive, as Google had not used these assets to impose any illegal restrictions.

The case, which began in the fall of 2020, had already determined that Google violated U.S. antitrust laws through its search business. The judge noted that Google was a monopolist and had taken actions to maintain its monopoly. During the remedial phase of the trial, which lasted several weeks, Google argued that the Department of Justice's proposed measures would harm consumer interests and potentially stifle competition in the U.S. economy and tech industry.

Chrome's head of engineering argued that if forced to divest Chrome, the browser would become merely a "shadow of its current product," potentially becoming "unsafe and outdated." The ruling prohibits Google from entering into agreements with device manufacturers that require pre-installation of Google Search, Chrome, Google Assistant, or Gemini as a condition for licensing the Google Play app store. However, the court did not prohibit Google from continuing to pay partners to distribute its services, meaning that Google's high-payout agreements with Apple remain intact.

The court document stated that cutting off Google's payments would likely have significant adverse effects on distribution partners, related markets, and consumers, and in some cases, severe impacts. Historically, Google has secured its search engine as the default option through exclusive contracts with device manufacturers like Apple. The judge noted that before 2020, 95% of mobile search requests in the U.S. were completed through Google.

The ruling requires Google to share certain search index and user interaction data with some competitors to prevent Google from benefiting from exclusive behavior. However, the amount of information Google needs to share is less than what the Department of Justice had requested.

Industry analysts noted that even without exclusive agreements, many manufacturers would continue to pre-install Google products due to their widespread use. The decision was seen as favorable for both Apple and Google, especially given reports of potential collaboration between the two companies to integrate Gemini into Siri. However, the prohibition on exclusive agreements means Google will need to work harder to attract users, particularly in the face of competition from OpenAI and Perplexity.