Google Dodges $2.5T Breakup

A federal judge refused to break up Google for monopolizing the online search and ad markets, and instead imposed lesser restrictions to curb the power of the $2 trillion company.

In a closely watched antitrust trial pitting the U.S. government against one of the world’s largest tech firms, District Judge Amit Mehta on Tuesday rejected the Justice Department’s request to force Google to spin off its Chrome browser and Android products.

Mehta agreed with the government, however, that Google needed to allow competitors to gain a foothold, and ordered the company to make narrower changes.

Google must now share some of its search data with competitors, and is prohibited from inking deals that make its products — including its artificial intelligence — the default tools on mobile devices.

Mehta’s opinion marks the most consequential antitrust decision on Big Tech’s business practices since a federal judge’s failed bid to break up Microsoft in the early 2000s. Legal experts expect Google will appeal the decision, which could be ripe for Supreme Court review. Google on Tuesday said it has concerns with Meta’s opinion and is reviewing the decision.

The search case, which started under the first Trump administration, offers a glimmer of hope for other tech companies facing potential breakups of their businesses, including Meta, Amazon and Apple.

The decision was the first of two major antitrust cases that Google faced this year. In the other case brought by the Justice Department, it faces a potential breakup of its ad tech business.

While Google avoided the most drastic outcome, Mehta’s opinion showed there will still be consequences for anticompetitive behavior in the tech industry, said Vanderbilt University law professor Rebecca Haw Allensworth.

“Google has to see this [decision] as a real risk going forward,” she added. “The word we use as lawyers is chill. They are going to feel chilled from similar conduct.”

The tech industry — especially the handful of giants that currently rule the digital economy as the world’s most valuable companies — has faced a wave of antitrust pressure under both Trump and President Joe Biden.

The European Union has also looked to step in, using its strong online antitrust rules to regulate an industry it believes the U.S. created and boosted with an overly hands-off approach.

But it’s been unclear how strongly either government will continue to press the issue. Tech CEOs have tried to make inroads with Trump during his second administration by pledging to invest in U.S. projects and donating to his inauguration fund.

Attorney General Pam Bondi lauded Mehta’s opinion Tuesday, saying the administration “will continue our legal efforts to hold companies accountable for monopolistic practices.”

In Europe, Google received an 11th-hour reprieve on Monday, when the company was expected to learn its penalty for its practices in placing online ads with search results. EU Trade Commissioner Maroš Šefčovič’s intervention to hold off the penalty comes as Trump is threatening to block the sale of chips and other tech to countries says are discriminating against American companies.

Looming over many of the cases targeting the largest tech companies is the question of how to apply longstanding antitrust law to new types of businesses, like Google, that may offer their services to consumers for free.

Bill Kovacic, an antitrust law professor at George Mason University who chaired the FTC at the end of the George W. Bush administration, said the case shows the federal government can win when applying old competition laws to modern digital markets.

Mehta ruled in August 2024 that Google illegally locked up 90 percent of the internet search market by partnering with iPhone maker Apple to be the default search provider on its Safari web browser — an arrangement that essentially boxed out potential competitors. Google had similar agreements with handset makers and mobile carriers like Samsung and Verizon. Mehta also found that Google illegally monopolized the market for ads displayed next to search results.

“What’s extremely important here is that the combination of liability and a remedy shows the government can prevail,” Kovacic said.

Florian Ederer, an economics professor at Boston University, questioned how much the decision will shake up the market, especially since the largest tech companies still exert huge market power.

Ederer questioned if allowing competitors to access Google’s search data, or prohibiting it from making Google Search the default app on mobile devices is really be enough to help new companies enter the market.

“It would have been a real landmark decision if we had seen a breakup,” Ederer said. “This is the best outcome [for Google], given that Google lost this case.”

In a nod to how the tech industry has changed just since the case started in October 2020, Mehta’s decision prohibits Google from making Gemini the default AI product on mobile devices. The decision notes the market for generative AI is significantly more competitive than it is for search, listing rivals models from OpenAI, Microsoft and Anthropic among others.

Mehta’s initial decision came after a 10-week bench trial, and set up what’s called a remedy trial, which took place in April. It was during that second trial that the Justice Department asked Mehta to break up the company to resolve its illegal monopoly.

The case spanned two administrations, starting under President Donald Trump’s first term, going to trial under former President Joe Biden, and Google has pledged to appeal in Trump’s second administration.

Google’s next remedy trial starts later in September. In that case, a federal judge ruled in April that Google held an illegal monopoly in the almost $300 million U.S. market for digital ads. Judge Leonie Brinkema of the Eastern District of Virginia said Google maintained its monopoly by tying together its ad server business, used by online publishers to manage ad sales on their sites, and its ad exchange business, which auctions off digital advertising space on websites. Google claimed it won half the case and vowed to appeal the other half.

Other major antitrust cases remain in the wings that could also drastically reshape the way the tech industry operates in America and across the globe. These cases and investigations come as lawmakers and regulators are worried about tech companies cornering the market for artificial intelligence in a similar fashion as what happened with e-commerce, social media and online search.

Amazon is slated to go to trial in early 2027 over claims it squashes competition to rip off sellers and consumers while peddling a subpar shopping experience riddled with confusing advertisements.

Apple faces claims its billions of iPhones sold since 2007 were designed to lock users into its products while raising costs for consumers, developers and artists, among others. Depositions and discovery in that case are scheduled through early 2027.

And chipmaker Nvidia is the subject of a Justice Department investigation over its purchase of AI start-up Run:ai.