Yesterday’s Google antitrust ruling was historic.
It may be kind of obvious to most people that a company handling 90% or more of search queries in the U.S. is a monopolist, but it’s nonetheless a big deal for a judge to rule as such—and to confirm that Google was therefore breaking antitrust rules when it shored up that outsized position by paying billions to Apple, Samsung and other players to make Google Search the default on their devices.
This, and U.S. judge Amit Mehta’s finding that Google’s monopolistic position has allowed it to charge excessive prices for search text ads, constitute the biggest outcome in U.S. tech antitrust history since the Microsoft ruling nearly quarter of a century ago. It will most likely have a big impact. But we are far from knowing what that impact will be, because Mehta is yet to lay out how Google must fix things—and this next part of the proceedings could come within six months, or it could be delayed for a long time by Google’s promised appeal.
So, for now, we have to play the conjecture game.
Given the fact that exclusive default-search payments are at the core of the case, it is quite possible that Mehta will demand their end. That would represent a hit to the bottom lines of the companies Google has been paying; Apple alone has been making as much as $20 billion a year out of this scheme. As my colleague Jason Del Rey wrote yesterday, Firefox-maker Mozilla in particular faces an existential threat in this scenario, as it is almost entirely funded by payments for making Google its default search engine.
But it’s very unclear how things might change for consumers as a result of yesterday’s ruling.
Mehta may merely tell Google to start sharing its search data with rival search providers, which could promote competition in the sector without users seeing much that’s different.
It is possible that people will be presented with a search engine choice when firing up their browser for the first time—Google already does this in Chrome in Europe, to comply with new antitrust laws there. It could be that Apple will start offering its own search engine in Safari, though this would cost billions to develop, and it’s just as likely that there would be an opening for Microsoft’s Bing on the iPhone, or perhaps the search engine that’s being developed by new Apple partner OpenAI.
Whatever happens will come at a time when search is already in flux—new entrants like OpenAI and Perplexity, and indeed Google itself, are starting to use AI to give people more definitive-seeming answers to their search queries, rather than presenting them with lists. (Disclosure: Fortune recently struck a revenue-sharing deal with Perplexity.) I suspect that, years down the line, people will be furiously debating how much of an effect the Google antitrust ruling really had in the grand scheme of things, just as they’ve argued about the true impact of Europe forcing Microsoft to proactively give people a choice of browser on their Windows PCs back in 2010.
That is, unless Mehta takes the nuclear option and decides that Google must divest Chrome or even Android. This sort of effect is not up for much interpretation, though my gut feeling is that it’s unlikely.
However, there is one thing we can say for sure: This precedent-setting ruling will add fuel to the other big antitrust lawsuits that are underway, involving Meta, Apple, Amazon—and again Google, which the Justice Department is suing over its ad-tech practices. In those contexts, it’s a big endorsement for the department’s antitrust chief, Jonathan Kanter, and his aggressive approach to tackling Big Tech. (Kanter was a Biden appointee, though this Google search case dates back to the Trump era.)
“This landmark decision holds Google accountable. It paves the path for innovation for generations to come and protects access to information for all Americans,” Kanter said in a statement.
More news below.
David Meyer
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NEWSWORTHY
X disinformation. Elon Musk and his X platform are sailing awfully close to the wind on the disinformation front. In the U.S., five secretaries of state are urging Musk to stop X’s Grok AI giving users false information about the election—it’s been claiming that Kamala Harris can no longer appear on the ballot in nine states. And in the U.K., the government has accused X and other social media platforms of putting “rocket boosters” under misinformation that led to racist riots across the country.
OpenAI exec-xodus. High-profile OpenAI cofounder Greg Brockman is taking an extended leave of absence from the company and two other top executives have left—with one, cofounder John Schulman, joining arch-rival Anthropic. The Information reported the turmoil, noting that it shows “the company’s leadership has yet to stabilize following the firing and rehiring of CEO Sam Altman in November.” Separately, TechCrunch reports that a U.S. YouTube creator is trying to organize a class action lawsuit against OpenAI for allegedly training its AI models on transcripts of YouTube videos without notification or compensation.
ByteDance video generator. TikTok proprietor ByteDance has become the latest Chinese player to release a text-to-video AI model, Reuters reports. Jimeng AI, from ByteDance subsidiary Faceu, is now available to Chinese iOS and Android users, joining similar tools from startups like Kuaishou and Zhipu. Meanwhile, OpenAI is still yet to open its Sora text-to-video model to the public, after unveiling it nearly half a year ago.
ON OUR FEED
“You have to return.”
—South Korea’s National Samsung Electronics Union, which initiated the company’s first-ever strike four weeks ago, tells its members to get back to work. The union did not get the level of pay rise it was after, and is now changing tactics to embrace “walkout blitzes,” The Register reports.
IN CASE YOU MISSED IT
Robinhood, Nvidia, tech giants led market plunge amid economic jitters, by Bloomberg
Elon Musk revives feud with OpenAI’s Sam Altman—’the Emperor has no clothes’, by Sasha Rogelberg
Venezuela strongman Nicolás Maduro tells followers to delete WhatsApp because it’s being used by ‘fascists’ to spread violence, by Bloomberg
Delta and CrowdStrike clash over $500 million outage blame, by the Associated Press
Donald Trump got a Tesla Cybertruck from a controversial influencer—right after the former president said EVs will ‘destroy the country’, by Eva Roytburg
An EV charging company will penalize drivers who take more than they need, by Seamus Webster
BEFORE YOU GO
AI in games. The Screen Actors Guild is striking again, and AI is again playing a role. This time, SAG-AFTRA’s members are refusing to participate in video game projects rather than TV shows and movies, The Verge reports. Contract negotiations broke down over the issue of whether motion performers—like stunt actors or people playing creatures—would get the same protections against nonconsensual AI replication that voice actors would get.
