On October 8, the U.S. Department of Justice (DOJ) and attorneys general (AGs) from every U.S. state as well as the District of Columbia, Guam and Puerto Rico filed a proposed remedy framework in the federal antitrust lawsuit against Internet services giant Google currently ongoing in the U.S. District Court for the District of Columbia. While the proposed remedies could change with further discovery, the framework includes several measures that would prohibit Google’s self-preferencing its search engine platform on its products and certain contractual behaviors that undermine competition from rival search engines.

The DOJ’s proposed remedial framework follows two months after U.S. District Judge Amit Mehta ruled in favor of the AG plaintiffs that Google’s search and advertising practices violated Section 2 of the Sherman Antitrust Act. While Judge Mehta refrained from entering sanctions against Google, his post-trial ruling found that Google’s exclusive distribution agreements raised antitrust liability under two counts raised in the AG plaintiffs’ amended complaint.

Future Impact of Generative AI on Search Engines Complicates Remedial Situation

Citing to the D.C. Circuit’s 2001 ruling in U.S. v. Microsoft, the DOJ noted that a legal remedy must leave markets unfettered from Google’s conduct, remove competition barriers, deny Google the fruits of its statutory violation, and prevent Google’s future monopolization of those markets. In accounting for future forms of monopolization, the DOJ’s filing noted that the situation was complicated by the advent of artificial intelligence (AI), which stands to become an important aspect of the search engine industry in the coming years.

Remedies proposed in the DOJ’s recently filed framework would address four separate categories of harm related to the following Google business practices: search distribution and revenue sharing; generation and display of search results; advertising scale and monetization; and accumulation and use of data. Given that discovery is ongoing in the district court case, the AG plaintiffs note that the proposed remedies in this framework could change, though the DOJ expects that remedies in a final judgment would be mutually reinforcing.

Most of the DOJ’s proposed remedial framework targets Google’s effects on the market for search distribution and revenue sharing. The DOJ notes that Google’s control on search distribution is supported by the company’s ability to disincentivize any diversion of queries to rival search engines through revenue share payments. Along with prohibiting those agreements, the AG plaintiffs are evaluating remedies that could limit Google’s ability to enter into default or preinstallation agreements. They also seek to limit Google’s ability to self-preference Google’s search engine on other Google products including Chrome and Android, and could require Google to contribute to educational-awareness campaigns to highlight competitive aspects of rival search products.

Google-Financed Technical Committee, AI Opt-Outs Part of Proposed Remedies

To counteract Google’s monopolistic use of search engine data, the DOJ’s framework proposes that Google make available indexes and models used for Google Search, as well as search results and underlying ranking figures, either in whole or through an application programming interface (API). The DOJ is also considering remedies by which Google would have to allow websites to opt out of any Google AI product such as retrieval-augmented-generation-sourced summaries, which combine traditional search tools with the capabilities of large language models.

In response to Google’s impact on the choice of search providers for advertisers, the proposed framework suggests syndicating Google’s ad feed independent of search results, and requiring Google to provide detailed search query reports to advertisers. Finally, to prevent circumvention of the DOJ’s proposed remedies, the AG plaintiffs are considering further measures that would require Google to finance and report to a court-appointed technical committee, designate a senior executive to report on Google’s compliance, and prohibit Google from owning any stake in its search competitors.

Google’s anticompetitive business behaviors in Internet services have come under increasing scrutiny both in the United States and the European Union. This September, Google was unsuccessful in winning a reprieve from a €2.4 billion ($2.7 billion USD) fine from EU antitrust regulators over its comparison shopping service, although the Big Tech stalwart won its appeal of a €1.5 billion ($1.66 billion USD) fine for its online advertising services.

In the United States, antitrust experts have raised concerns with the impacts of the DOJ’s proposed antitrust remedies. Alden Abbott, research fellow at Mercatus Center and former general counsel of the Federal Trade Commission, observed that measures meant to help Google’s competitors could produce negative effects for consumers:

“The problem with DOJ’s remedies memo is that while it assumes monopoly problems in these four areas, it neglects the importance of ensuring that remedies do not unnecessarily harm the competitive process and slow innovation. A balanced analysis would have discussed the potential costs, and elaborated on how the court might weigh costs versus benefits in seeking to arrive at an optimal remedy set.”

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Author: alexeynovikov
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