When OpenAI rocked the tech world with the launch of ChatGPT in 2022, Google scrambled to roll out what employees called a “rushed,” “botched” and “un-Googley” competitor. Those early stumbles may have been a blessing in disguise.
On Tuesday, a federal judge ruled against the most severe consequences that were proposed by the U.S. Department of Justice as part of a landmark antitrust case filed in 2020. Google lost the case last year, but the judge decided that the search giant can keep its Chrome browser, defying the government’s request.
The harshest punishment handed down bars Google from engaging in exclusive contracts that come with payments or licensing. The company must also share search data.
Google’s victory, despite its loss at trial, is largely the result of the fiercely competitive AI industry that’s taken shape in less than three years. U.S. District Judge Amit Mehta wrote in a filing that “the emergence of GenAI changed the course of this case.”
“Google is still the dominant firm in the relevant product markets,” Mehta wrote. “No existing rival has wrested market share from Google. And no new competitor has entered the market. But artificial intelligence technologies, particularly generative AI (“GenAI”), may yet prove to be game changers,”
Tuesday’s decision lands nearly a year after Mehta ruled Google illegally held a monopoly in internet search. Shares of Google soared in extended trading.
Mehta dedicated roughly 30 pages of the 226-page filing to explaining generative AI and the market as it exists today. He described the space as “highly competitive” and wrote that there have been “numerous new market entrants” with access to “a lot of capital.”
In other words, the AI market has become hugely important and has entirely different competitive dynamics than search, which Google dominates.
Mehta said it will stay that way.
“Google cannot use the same anticompetitive playbook for its GenAI products that it used for Search,” he wrote.
Google and the Justice Department both referenced the significance of AI in their statements on Tuesday.
Lee-Anne Mulholland, Google’s vice president of regulatory affairs, wrote in a blog post after the ruling that, “Today’s decision recognizes how much the industry has changed through the advent of AI, which is giving people so many more ways to find information.”
Mulholland added that the company has “concerns” about how the sharing of search data will “impact our users and their privacy,” and that the company is reviewing the decision.
The DOJ said in its statement that the decision will “pry open” the search market after Google’s extended stretch of dominance.
“The ruling also recognizes the need to prevent Google from using the same anticompetitive tactics for its GenAI products as it used to monopolize the search market, and the remedies will reach GenAI technologies and companies,” the DOJ said.
Generative AI startups are repeatedly mentioned throughout the document.
OpenAI’s name comes up 30 times, Anthropic is named six times and Perplexity shows up in 24 instances. Anthropic and Perplexity had not even been founded when the case was originally filed, as they launched in 2021 and 2022, respectively.
OpenAI had been around for several years, but it was a long way from becoming a household name. Its ChatGPT chatbot was introduced to the public in late 2022, an unveiling that sparked the generative AI boom.
ChatGPT was named 28 times in Tuesday’s filing.
“Today, tens of millions of people use GenAI chatbots, like ChatGPT, Perplexity, and Claude, to gather information that they previously sought through internet search,” the filing says.
The remedies determination also mentioned Elon Musk’s xAI as well as other companies including DuckDuckGo, which has a chat service called Duck.ai, Meta and China’s DeepSeek as competitors in the space.
“These remedies proceedings thus have been as much about promoting competition among GSEs [general search engines] as ensuring that Google’s dominance in search does not carry over into the GenAI space,” the filing says.
— CNBC’s Jennifer Elias contributed to this report.
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