Google Escapes Breakup as AI Alters Monopoly Case Outcome

A US judge has ruled that Google can avoid the most severe antitrust penalties, including being broken up, because of rapid changes in the search market driven by generative AI.

Why the Case Was Brought in the First Place

The ruling stems from a five-year legal battle between Google and the US Department of Justice (DoJ), which accused the tech giant of illegally maintaining a monopoly in online search. First filed in October 2020 by the DoJ and 11 US states, the case argued that Google used unlawful tactics to protect and extend its dominance, particularly through exclusive agreements that made it the default search engine on smartphones, browsers, and other devices.

The trial began in September 2023 and focused on whether Google’s business practices, especially its multi-billion-dollar deals with companies like Apple, Samsung, and Mozilla, were shutting out competitors and reinforcing its hold over more than 90 per cent of the online search market. In August 2024, US District Judge Amit Mehta agreed with the DoJ that Google had violated antitrust laws under Section 2 of the Sherman Act. That left everyone wondering (until now) what the consequences should be.

What the DoJ Wanted, and Why

The DoJ argued that serious structural changes were needed to stop Google from continuing to wield disproportionate power over how users access information online. For example, this included the forced divestiture of two of Google’s most strategically important assets, ie. its Chrome web browser and the Android operating system.

The DoJ essentially argued that these platforms were being used to entrench Google Search as the default option, thereby making it harder for rivals to compete. The government also sought a ban on exclusive agreements, and demanded that Google share its search data (information about user queries and clicks) with other search providers, to level the playing field.

However, in the final judgement just issued (early September 2025), Judge Mehta rejected most of these proposals, ruling that they were overly broad and unsupported by evidence of direct misuse.

What the Judge Said

In his 230-page decision, Judge Mehta confirmed that Google had maintained its dominance through anti-competitive means, but concluded that forced divestiture of Chrome or Android was unnecessary and would risk harm to other parts of the tech ecosystem.

“Plaintiffs overreached in seeking forced divestiture of these key assets, which Google did not use to effect any illegal restraints,” Mehta wrote. Instead, he ordered more targeted remedies. Google must now stop entering into exclusive default agreements and must share certain user-side data, such as search indexes and click data, with “qualified competitors.”

So, rather than force a breakup of the company, Mehta imposed “behavioural remedies.” These include:

• Providing syndication access to qualified competitors at standard rates

• Ending exclusive contracts involving Search, Chrome, Assistant and Gemini.

• Sharing key data such as search index and click-through info with rivals.

However, this data-sharing excludes advertising-related information, a core part of Google’s business model. Google can also still pay to have its products preloaded on devices, as long as those deals are not exclusive.

AI as the Game-Changer

One of the most unexpected aspects of the ruling was Judge Mehta’s emphasis on the rise of generative AI. He argued that since the case began in 2020, the search market has evolved significantly, with AI products such as ChatGPT and Perplexity offering new ways for users to find information online.

“The emergence of GenAI changed the course of this case,” the judge wrote. He noted that no witnesses during the original liability phase viewed AI as an immediate threat, but that by the remedies stage, AI tools had become a meaningful source of competition in general search.

This shift, he said, made structural remedies less appropriate. “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,” he added.

What This Means for Google and Its Rivals

For Google, the ruling is clearly a significant reprieve. The company avoided being broken up and is still able to fund default placement deals, as long as they are non-exclusive. Not surprisingly, Alphabet’s share price rose more than 8 per cent after the decision was announced, while Apple, a key partner in default search placements, saw a 4 per cent increase.

Google welcomed the outcome, stating: “Today’s decision recognises how much the industry has changed through the advent of AI, which is giving people so many more ways to find information.”

However, the decision was less favourable for Google’s competitors, including smaller search engines like DuckDuckGo and data-hungry AI startups. While they now have limited access to user-side search data, many argue that without access to Google’s full “recipe”, including advertising data and ranking algorithms, they still face an uphill battle.

Adam Kovacevich, CEO of the tech policy group Chamber of Progress and a former Google public policy executive, told reporters: “What you had is Google’s rivals arguing that Google had to share its recipes’ secret sauce. And the judge rejected that. He said: ‘You only have to share their ingredient list.’”

Users and Businesses

For everyday users, the immediate impact of this ruling is likely to be minimal. For example, Google will remain the default search option on many platforms and services, although it must now offer some level of choice. Businesses that rely on search visibility, digital marketing, or ad placement are unlikely to see major short-term changes.

However, the longer-term implications may be more subtle. For example, by avoiding structural changes, the court has left Google’s advertising dominance intact, although critics argue that this could limit innovation and keep ad prices high.

Some privacy advocates have also voiced concern. For example, the Electronic Frontier Foundation warned that limited data-sharing requirements could be easily circumvented or rendered ineffective if not tightly monitored.

Reaction from the Markets and Others

Investor reaction was, of course, overwhelmingly positive. The share price rises for Alphabet and Apple suggest relief that the court did not force a radical restructuring of the tech ecosystem. Mozilla, another major Google distribution partner, welcomed the ruling’s caution, noting that sudden revenue loss from Google payments “could put Firefox out of business.”

The Department of Justice, while not immediately commenting on whether it would appeal, said in a statement: “The ruling recognises the need for remedies that will pry open the market for general search services, which has been frozen in place for over a decade.”

Not everyone agrees the outcome goes far enough. Nidhi Hegde, Executive Director of the American Economic Liberties Project, called the remedies “feckless,” comparing them to letting a bank robber off with a thank-you note. “This is a complete failure of duty and must be appealed,” she said.

Critics across the political spectrum have also questioned whether the court placed too much faith in AI’s ability to regulate the market. As the technology is still in flux, it remains uncertain whether generative AI will truly provide the kind of competition that could erode Google’s dominance.

What Does This Mean For Your Business?

For now, the ruling leaves Google in a dominant position and offers limited changes for users or competitors. While exclusive defaults have been blocked, the company can continue paying for high-profile placements and retains full control over its most valuable advertising and ranking data. For UK businesses reliant on search traffic, online visibility or Google Ads, the immediate landscape remains largely the same. That may bring short-term certainty, but it also means that the pressures and pricing structures of a highly centralised market are likely to continue.

The court’s focus on generative AI as a future source of competition reflects just how quickly the tech environment has changed. However, it also places significant weight on an evolving technology that has yet to fully deliver on its disruptive promise. While AI tools are gaining traction, they are not yet mature enough to provide a realistic alternative to traditional search for most users or businesses. Whether they will in time remains to be seen, but for now, much of Google’s advantage is still firmly in place.

For regulators, the outcome sets a clear precedent. Rather than restructuring dominant platforms, the focus has shifted towards softer remedies such as data-sharing and long-term oversight. That approach may limit harm to partners and consumers in the short term, but it leaves open questions about whether smaller search providers and emerging AI tools can genuinely compete without broader intervention.

UK businesses operating in digital sectors, online retail, media, and advertising will need to monitor these developments closely. The effectiveness of the data-sharing requirements, and whether AI can level the field as the court suggests, will help determine whether genuine competition emerges, or whether the market remains firmly tilted in favour of one provider. Either way, it now seems that the responsibility for driving that change could lie more with technology and market forces than with the courts.