Google can keep Chrome but needs to give up some data, judge rules in antitrust case | CBC News

A federal judge on Tuesday ordered a shakeup of Google’s search engine in an attempt to curb the power of an illegal monopoly, but spared it from orders to break up the company and other restraints.

The 226-page decision made by U.S. District Judge Amit Mehta in Washington, D.C., will likely ripple across the technological landscape at a time when the industry is being reshaped by breakthroughs in artificial intelligence — including conversational “answer engines” as companies like ChatGPT and Perplexity try to upend Google’s long-held position as the internet’s main gateway.

“Unlike the typical case where the court’s job is to resolve a dispute based on historic facts, here the court is asked to gaze into a crystal ball and look to the future. Not exactly a judge’s forte,” Mehta wrote.

The judge is trying to rein in Google by prohibiting some of the tactics used to drive traffic to the search engine and other services. The ruling will also open up some of the company’s prized databases of closely guarded information about search habits that have provided Google with a seemingly insurmountable advantage.

Google also holds contracts that give its search engine, Gemini AI app, Play Store for Android and virtual assistant an exclusive position on some devices. This ruling bars certain exclusive contracts with device makers and browser developers, but Mehta stopped short of banning these multi-billion dollar deals that Google has been making for years to lock in its search engine as the default on smartphones, personal computers and other devices.

The judge also rejected the U.S. Justice Department’s effort to force Google to sell its popular Chrome browser, concluding it was an unwarranted step that “would be incredibly messy and highly risky.”

Mehta refrained from ordering a sale of Chrome, because he decided there wasn’t adequate proof the browser served as an essential ingredient in Google’s search monopoly, making a divestiture “a poor fit for this case.”

Chrome would have been a hot commodity had the judge forced Google to put it on the auction block. Perplexity submitted an unsolicited $34.5 billion offer to buy Chrome last month. And during court testimony earlier this year, a ChatGPT executive left no doubt that service’s owner, OpenAI, would be interested in be interested in buying Chrome, too.

Partially because he is allowing the default deals to continue, Mehta is ordering Google to give its current and would-be rivals access to some of its search engine’s secret sauce — the data stockpiled from trillions of queries that it used to help improve the quality of its search results.

That’s a measure Google had also fiercely opposed, contending it is unfair and would raise privacy and security risk for the billions of people who have posed questions to its search engine, sometimes delving into sensitive issues.

Mehta’s ruling will limit the access to Google’s search index and query histories.

AI rising in search quests

Mehta’s ruling was a nod to regulators’  efforts to level the playing field for companies who have invested billions to boost their AI business — competitors that will likely get a boost from the ruling.

“The emergence of GenAI changed the course of this case,” Mehta wrote in his ruling.

He said that tens of millions of people use generative AI chatbots like ChatGPT, Perplexity, and Claude to gather information that they previously sought through regular internet searches. 

WATCH | The next wave of AI: 

AI agents could change how you use the internet

OpenAI and other big tech companies are starting to roll out the next wave of artificial intelligence, designed to operate with more autonomy. CBC’s Nora Young breaks down how agentic AI works and why some think it will change how you use the internet.

While these chatbots are not yet close to replacing traditional search, the industry expects that developers will continue to add features to GenAI products to perform more like Google Search, he said.

Alphabet CEO Sundar Pichai expressed concerns during the trial in April that the data-sharing measures sought by the U.S. Department of Justice could enable Google’s rivals to reverse-engineer its technology.

Win for Justice department, other tech companies

The Justice Department’s antitrust chief, Gail Slater, hailed the decision as a “major win for the American people,” even though the agency didn’t get everything it sought. “We are now weighing our options and thinking through whether the ordered relief goes far enough,” Slater wrote in a post.

In its own post, Google framed Mehta’s ruling as a vindication of its long-held position that the case never should have been brought. The decision “recognizes how much the industry has changed through the advent of AI, which is giving people so many more ways to find information,” wrote Lee-Anne Mulholland, Google’s vice president of regulatory affairs.

“This underlines what we’ve been saying since this case was filed in 2020: Competition is intense and people can easily choose the services they want.”

The Mountain View, California, company has already vowed to appeal the judge’s monopoly findings issued 13 months ago that led to Tuesday’s ruling.

Investors seemed to interpret the ruling as a relatively light slap on the wrist for Google, as the stock price of its corporate parent, Alphabet Inc., surged more than seven per cent in extended trading. That would translate into a nearly $200 billion increase in Alphabet’s market value, if the shares follow a similar trajectory in Wednesday’s regular trading session.

Allowing the default search deals to continue is more than just a victory for Google. It’s also a win for Apple, which receives more than $20 billion annually from Google, and other recipients of the payments.

In hearings earlier this year, Apple warned the judge that banning the contracts would deprive the company of money that it funnels into its own innovative research. The Cupertino, California, company also cautioned that the ban could have the unintended consequence of making Google even more powerful by pocketing the money it had been spending on deals while most consumers will still end up flocking to Google’s search engine anyway.

Others, such as the owners of the Firefox search engine, asserted that losing the Google contracts would threaten their future survival by depriving them of essential revenue.

Apple’s shares rose three per cent in extended trading after the ruling came out.

While the wrangling over Mehta’s ruling continues, Google is facing another potentially debilitating threat in another antitrust case brought by the Justice Department targeting the digital ad empire that was built up around its search engine.

After a different federal judge in Virginia declared that some of the technology underlying the ad network to be an illegal monopoly earlier this year, the Justice Department plans to make its case for another proposed breakup  in a trial scheduled to begin later this month.