Google is allowed to maintain its current investments in AI startups like Anthropic, but it must inform antitrust regulators before making any further investments in AI companies. This requirement was included in a revised proposal filed by the U.S. Department of Justice (DOJ) on Friday as part of its ongoing antitrust case against Google in the search industry.
The content of the court filing reflects a significant change in the government’s approach to the extent of Google’s influence on AI development. Initially, the DOJ aimed to force the tech company to divest from companies like Anthropic, but this new proposal acknowledges that a complete ban on Google’s participation in AI investments could have unintended negative consequences. However, the agency is still concerned about the firm using its financial strength to manipulate the industry in anti-competitive ways.
The DOJ’s recent brief demonstrates the delicate balancing act it is attempting to achieve, as it seeks to regulate potential monopolistic behavior while recognizing the novelty and rapid evolution of the AI sector. Antitrust authorities aim to monitor and evaluate the tech giant’s impact on the market without abruptly inhibiting progress by requiring Google to notify regulators of future AI-related investments.
In its filing, the DOJ stated that preventing Google from investing in AI could have unintended effects in the AI space. The agency believes that allowing the company to keep its existing investments while implementing a notification system provides a level of oversight without stifling AI progress prematurely.
Despite the shift in approach, the Justice Department has largely maintained its proposed remedies from the original filing in November 2023. These remedies include recommending that Google be forced to divest its Chrome web browser and take measures to dismantle its control over the search and advertising markets.
The DOJ emphasizes persistent concerns about the tech firm’s dominance in digital marketplaces by advocating for the divestiture of Chrome. Federal regulators argue that Google uses its control over search and advertising to suppress competition, a claim that a federal court upheld last year.
Judge Amit Mehta ruled that Google unlawfully monopolized the online search and advertising markets, paving the way for a trial next month to determine appropriate remedies.
In addition to search and advertising, the government is now focusing on artificial intelligence as a crucial battleground in the tech industry. With Google investing billions in AI startups, such as its $3 billion investment in Anthropic, regulators are concerned that the company could leverage these partnerships to tighten its grip on emerging technology markets.
Meanwhile, other tech companies, including Amazon, continue to invest in Anthropic, searching for other AI cash reserves. Anthropic also argues that forcing Google to divest, as proposed in the initial November plan, would harm competition in the AI industry by disrupting an important source of investment and innovation.
Google has vigorously opposed many of the DOJ’s proposals, deeming them overly aggressive and detrimental to consumers and the economy. A spokesperson for Google, Peter Schottenfels, stated on Friday that the department’s broad proposals go beyond the court’s decision and would have negative effects on American consumers, the economy, and national security.
The tech giant argues that barring it from investing in AI startups or continuing certain business deals would put the U.S. at a “comparative disadvantage” in the global race to develop new AI tools. Google also resists other proposals that would prevent it from forming revenue-sharing partnerships with browser vendors and phone manufacturers, asserting that it should be allowed to continue such arrangements as long as they are not exclusive.
The DOJ may consider breaking up Google’s search and browser businesses, a disruptive move that would not only affect Google but also transform the face of the Internet, similar to the antitrust breakup of AT&T in the 1980s.
The new requirement for companies to notify the government of their AI investments could serve as a model for curbing the increasing influence of tech giants on technology.
While the legal battle unfolds, interested parties, including emerging AI startups, established tech companies, and regulators, are closely following the court’s ruling and its implications for digital marketplaces and future AI development.
