Alphabet Inc. saw its shares jump nearly 9% after a landmark court ruling in the long-running antitrust case against Google. The decision allows Google to retain ownership of its Chrome browser and Android operating system, while imposing new rules to promote competition in the search market.
The U.S. Department of Justice had accused Google of illegally monopolising internet search and had sought drastic remedies, including forcing the company to divest Chrome and Android.
However, U.S. District Judge Amit Mehta rejected these severe demands, stating that divesting these key assets would be excessive.
“Plaintiffs overreached in seeking forced divesture of these key assets, which Google did not use to effect any illegal restraints,” Mehta stated. Chrome and Android remain central to Google’s business, with Android running on about 70% of smartphones globally.
Despite keeping these assets, Google will face restrictions preventing it from entering exclusive contracts that limit competition, such as exclusive payments to device makers like Apple to preload Google Search and Chrome as defaults. The company can still make such payments, but contracts must not be exclusive, meaning Google’s lucrative deal with Apple stays intact.
The ruling requires Google to share certain search index and user-interaction data with qualified competitors, including AI firms like OpenAI, to foster fair competition in the evolving AI-driven search landscape.
Judge Mehta pointed out, “The emergence of GenAI changed the course of this case,” recognising the impact of generative AI technologies on how search is evolving.
Analysts welcomed the ruling, with Daniel Ives of Wedbush Securities calling it “a monster win for Cupertino and for Google its a home run ruling that removes a huge overhang on the stock.” Alphabet’s stock surged on the news, while Apple’s shares also gained.
The case displays an effort to balance innovation with competition, especially as AI changes the search environment. Google now faces the challenge of competing fairly while maintaining dominance in digital advertising, which remains a major revenue source.
The ruling also establishes oversight mechanisms to ensure Google complies with the new rules. Though Google plans to appeal parts of the judgement, this outcome spares the company from a breakup and sets new precedents for regulating Big Tech amid rapid technological change.