Google may be America’s go-to search engine, but that doesn’t mean it’s a monopoly in need of a massive breakup—at least, not yet.
In one of the biggest antitrust cases in decades, US District Judge Amit Mehta ruled against many of the Department of Justice’s harshest proposals for Alphabet—including breaking the company up. “Google will not be required to divest Chrome,” Mehta said in his ruling, pointing out that chatbots and other AI technologies that work like search engines present enough of a threat to the tech company’s search dominance that the court does not need to step in and break up a fight that’s barely begun. “The emergence of GenAI changed the course of this case.”
This win, after five years of legal battles, sent Alphabet shares soaring 9.01% to a new all-time high—but the victory was not absolute. The judge ordered Alphabet to share certain data on search index and user interaction, although not for ads. The court also ruled that Alphabet must end its practice of “compelled syndication,” or striking deals with companies that locks in its search engine as the default for browsers and cellphones and locks out competitors.
What Google’s win means for Apple
Alphabet may not be able to shut out its search rivals anymore, but the court ruled that it can still pay for the privilege of becoming a platform’s default search engine. That’s fantastic news for Apple, which rakes in an estimated $20 billion a year from Alphabet for giving Google prime placement on iPhones.
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That money, which comes at little to no cost, has proven pivotal to supplementing Apple’s margins and cushioning its bottom line at a time when the company has struggled. Its cash cow, the iPhone, has been sputtering along at just 2% annual revenue growth for the past three years, and pressure from President Trump to move manufacturing to the US threatens to cut into profits.
Apple has also been slow to catch up in the AI race, which could lead to a shockingly ho-hum unveiling of the next crop of iPhones next week. Just yesterday, Meta Platforms poached a handful of the company’s AI researchers, further hindering its efforts.
This courtroom drama isn’t over yet: Mehta ordered all parties to convene again by Sept. 10 for the final verdict. In the meantime, though, two tech titans are breathing easier, and that’s great for the entire market, which took a big tumble to kick off September.—JD