Google antitrust case: AI takes centre stage in closing arguments

During closing arguments in the penalty portion of the Google antitrust trial on Friday, the judge asked a question about the fast-moving tech world that will likely give pause to legal and business experts.

Federal Judge Amit Mehta, who last year found Alphabet-owned Google liable for maintaining a monopoly and exploiting its search sector dominance, wanted to know how search will evolve as he decides the "remedies", or punishment, for Google.

“Does the government believe there’s a market for a new search engine to emerge as we think of it today, even with the remedies in place?” he said, interrupting Department of Justice (DOJ) lawyer David Dahlquist's closing arguments.

Mr Mehta was referring to artificial intelligence. He implied that as he decides how to correct Google's monopoly, he needs to consider how quickly the tech landscape is shifting.

The DOJ's antitrust case against Google is testing the limits of capitalism, profit and competition.

It comes as artificial intelligence threatens to upend the internet search business models that allowed Google to dominate for decades.

Almost all witnesses who spoke at the remedy portion of the trial seemed to acknowledge the speed of change in the tech world.

The potency, promise and problems of AI in the context of existing business models surfaced several weeks ago when Apple executive Eddy Cue made comments from the witness box that briefly sent Google's stock careening.

Mr Cue was responding to a question about user habits and the effect that AI is starting to have on search engine companies like Google. Eventually, his comments segued into a reflection of how technology businesses often struggle to adjust.

“People still are going to need toothpaste 20 years from now, 40 years from now. You may not need an iPhone 10 years from now. As crazy as that sounds,” Mr Cue, the senior vice president of services at Apple, told a lawyer representing Alphabet, owner of Google.

“You have to earn it. You have to develop,” he added, explaining that Apple's metrics showed that for the first time ever, overall searches done through Google seemed to have made a slight dip.

Those comments reverberated throughout tech and legal communities, with some wondering if a remedy sought by the DOJ might be rendered moot by AI. How people search is changing, as AI swallows up website content and siphons off traffic.

Mr Mehta last month sided with the DOJ and ruled that Google's search dominance harmed consumers with less choice.

The Justice Department wants Mr Mehta to enact far-reaching penalties that would serve as a warning at other companies.

In court on Friday, Mr Dahlquist, the government lawyer, reiterated the DOJ's desire that Google be prohibited from entering into default search agreements with hardware and device makers.

He also pushed for strong requirements for Google to share search data and analytics with competitors, Perhaps most consequentially, he said Mr Mehta should require that Google divest Chrome, one of the world's most popular web browsers.

“We’re here to make sure this cause and the remedies we propose are able to pry open the competition of this market,” Mr Dahlquist argued.

“We understood the assignment, but rather than provide this court with remedies to promote competition, Google provided milquetoast remedies that maintain status quo,” he continued, adding that Google was acting in bad faith to try to maintain its monopoly.

“Despite Google’s efforts to avoid facts, those facts, as they’ve discovered, are stubborn things,” he added, taking a shot at the one of the world's most powerful tech companies and its phalanx of lawyers, sitting nearby.

Google's lawyer, John Schmidtlein, didn't mince words in his response.

“Look at how incredibly invasive and broad they are,” he said, referring to the DOJ's remedies that Google believes “lack causal connection” to its original motives for bringing the company to court.

“What’s the amount of data that a company might need to be able to compete?” he rhetorically asked, criticising one of the DOJ's proposed remedies that Google share search data with potential competitors.

Mr Mehta pushed back, saying that ample witnesses told the court that data would help increase their ability to compete, adding that it would be a “difficult exercise” to try to address Google's criticism of the search data remedy proposal.

He also asked the DOJ if AI platforms ChatGPT or Perplexity might be eligible to receive data.

“Not today, but it could eventually,” a DOJ lawyer responded. “They eventually plan to compete with search companies and search indexes.”

Just before the court broke for lunch on Friday, a senior Justice Department official told reporters that the DOJ was pleased with how the process was unfolding, even amid all the scrutiny from Google.

“Look this is a market that’s been frozen in place for the better part of two decades," the official said. “It’s going to take a long time to restore competition in the search market.”

That senior official also spoke to how the DOJ was trying to factor in fast-changing tech developments going forward as well as the current industry landscape.

“We don’t know in the year 2035 what that’s going to look like, the judge doesn’t know and frankly not even Google knows,” the official explained, pivoting to issue of search data.

“So the game is, how, from a remedial standpoint how do we ensure effective remedies and that’s very much about access to search data today and going forward.”

Google's own proposed remedies are far lighter than those sought by the DOJ, including a solution that would give users the ability to change their default search provider at least every 12 months.

The tech giant has also sought to maintain its ability to have contracts with device manufacturers.

“Browser companies like Apple and Mozilla should continue to have the freedom to do deals with whatever search engine they think is best for their users,” Google said.

In late April, Google's chief executive Sundar Pichai made similar arguments to the court, calling proposed remedies “too broad”, and suggesting that fast-pace AI developments would blunt the DOJ's proposals.

“It would be trivial to reverse engineer and effectively build Google search from the outside,” Mr Pichai added.

Closing arguments were expected to last throughout the day before Mr Mehta deliberates on a potential remedy.