Key Takeaways:
In August 2024, District Judge Amit Mehta ruled that Google operates as a monopoly in United States vs. Google LLC, 2020, an ongoing antitrust case where the U.S. government accuses Google of monopolizing online search.
The U.S. Department of Justice has urged Judge Mehta to require Google’s parent company, Alphabet, to divest its Chrome web browser and potentially its Android mobile operating system, end exclusive search agreements with companies like Apple, open Google’s database to competitors, and prohibit Google from acquiring or partnering with rival query-based AI start-ups.
KSG assesses that the Trump administration is likely to pursue more lenient antitrust remedies against Google, pursuing a middle-ground strategy that avoids drastic measures including divestiture and mandatory data sharing while focusing on less disruptive actions such as ending exclusivity agreements and introducing user choice screens. This approach is unlikely to significantly impact Google’s dominance in online search.
KSG assesses that if implemented, the DOJ's currently proposed remedies will have a mixed impact on the U.S.-China tech rivalry, likely strengthening U.S. leadership in AI while threatening U.S. dominance in online search and submarine internet cable traffic.
The Antitrust Case Against Google
As of 2024, Google controls roughly 90% of the global online search market, leveraging unparalleled user data to enhance online query responses and attract more users, creating a feedback loop that boosts market share while outcompeting rivals like Microsoft Bing, which lack comparable user data.
Online Search Market Share by Brand (October 2024)
Google cemented its global online search dominance by positioning itself as the default search engine through:
Android: By acquiring and developing the Android mobile operating system, which held a 72% global market share in Q1 2024, Google embedded its search engine into most smartphones and tablets outside Apple’s iOS ecosystem.
Chrome: By developing the Chrome web browser, which defaults to Google Search in the U.S., Google significantly expanded online search market share. As of Nov 2024, Google held 68% of the global browser market through Chrome.
Exclusive Deals: Google spends billions annually to secure default search status on Safari (Apple), Firefox (Mozilla), Samsung devices, and other web browsers, device makers, and wireless carriers.
In 2020, the DOJ accused Google of monopolizing search through its default status in Android, Apple, Chrome, Firefox, Samsung, and other browsers and device makers. In August 2024, Judge Mehta ruled Google to be a monopolist. A judgement on remedies is expected by August 2025. Potential remedies include mandating search engine and browser choice screens on Android and Chrome as well as a generic browser choice screen on all devices, ending exclusivity agreements, divesting Chrome and Android, providing search rivals including generative AI startups access to Google’s intellectual property through opening its database, and imposing restrictions on partnerships and acquisitions that could enhance Google’s search market share.
In November 2024, the DOJ urged Judge Mehta to mandate Google to divest Chrome and, if that does not suffice, Android, terminate exclusivity agreements, open its database to competitors, and ban Google from acquiring or partnering with AI startups that compete in online search.
The Geopolitical Significance of the Case
Google serves as a strategic asset for the U.S. Google's global market and information dominance enables the U.S. government to request and harvest internet communications from Google for surveillance purposes. Additionally, Google’s dominant market share curbs international competition from Chinese search engine rivals such as Baidu, Sogou (Tencent), and Shenma (Alibaba), reinforcing U.S. dominance over global internet data traffic.
Google also bolsters U.S. influence through its ownership and co-ownership of submarine internet cables, which carry an estimated 99% of global internet traffic. As of 2024, Google owns 17 submarine cables and co-owns 16 more, positioning it as the leader in international bandwidth investment, ownership, and use, surpassing traditional telecommunications firms. U.S. tech companies, led by Google, have driven a surge in undersea cable construction, solidifying U.S. control over global internet traffic.
The U.S. government has leveraged its influence over undersea cables, pressuring Google and co-owners to reroute or cancel major proposed submarine cable projects, for example, withdrawing the Hong Kong link of the Pacific Light Cable Network, and cancelling the Hong Kong-Guam Cable. These actions deprived China of bandwidth access and limited its ability to route global internet traffic through its territory for surveillance. Additionally, Google’s cable network has enhanced connectivity in Southeast Asia and is poised to expand access in India, the Middle East, and Africa, offering an alternative to China’s Digital Silk Road and countering its influence in global telecommunications.
Forward Look:
Second Trump Administration
KSG assesses that the Trump administration is likely to adopt a middle-ground strategy, avoiding extreme measures such as divestitures or mandatory IP sharing. Instead, it is likely to focus on less disruptive policies like ending exclusive agreements and introducing user choice screens. Wall Street is likely to oppose aggressive antitrust actions, favoring a business-friendly approach. In contrast, Republican antitrust advocates, Big Tech critics, and China hawks are likely to push for stricter measures, arguing that Google’s dominance stifles AI innovation and undermines U.S. leadership in AI relative to China.
Elon Musk’s startup, xAI, stands to benefit from mandatory IP-sharing, likely making Musk a proponent of such policies. Consequently, a compromise approach is likely to emerge, balancing these competing perspectives. However, this middle-ground strategy would likely preserve Google’s dominance, as users are expected to continue gravitating toward its superior search quality.
Online Search Market
Ending Google’s exclusive search agreements with Apple, Firefox, and Samsung, as well as divesting Chrome and Android, is unlikely to significantly weaken its dominance in online search. Users of Android, Apple, and Samsung devices are likely to continue favoring Google for its superior search performance. Even as a standalone entity or under new ownership, Chrome, like Firefox, would likely remain dependent on Google to monetize search results through advertising—a sector where Google maintains a dominant position due to its vast market share and unmatched access to user data.
KSG assesses that mandating Google to open its IP to rival search engines and generative AI startups could significantly diminish its dominance. This move would likely enable competitors like Bing and Yahoo to improve their services and grow their market share. Granting generative AI startups access to Google’s extensive datasets would help startups address the significant challenge of scaling up on large datasets at a manageable cost, posing a substantial challenge to Google’s leadership as leaner AI startups deliver increasingly sophisticated direct responses to user queries.
KSG assesses that prohibiting Google from acquiring or partnering with query-based AI startups could help limit monopolistic search market dominance. Such acquisitions or partnerships would enable Google to train a startup’s language model on its vast troves of user data, gaining a significant competitive advantage. However, the integration of Google’s Gemini into Google Search and Android devices, as well as OpenAI’s incorporation of ChatGPT into Apple’s Siri, is expected to create significant scaling effects, raising concerns that the generative AI market could replicate the cartel-like dynamics of online search. KSG therefore assesses that opening Google’s database to independent AI startups is the most effective strategy to foster competition and prevent monopolization.
US-China Technology Competition
KSG assesses that if implemented, the DOJ’s remedies’ impact on the US-China tech competition will likely be mixed, strengthening the U.S. position in AI while undermining its dominance in traditional online search and submarine cable infrastructure.
Access to Google’s database is likely to drive innovation and competition in U.S. search technology, strengthening domestic alternatives such as Bing and Yahoo in international markets. This could impede Chinese search engine rivals including Baidu, Tencent, and Alibaba—whose influence remains marginal outside of China—from expanding their global market share. However, a decline in Google’s dominance outside the West could also create opportunities for Chinese online search companies to grow their influence. KSG assesses that the overall impact of a reduction in Google’s market share will depend largely on the ability of U.S. and Chinese rivals to seize the opportunity and expand their market presence.
KSG assesses that requiring Google to open its IP to rival generative AI startups would likely bolster U.S. leadership in AI by giving developers a significant edge over Chinese competitors. Training language models on Google’s database would likely enable rapid improvements in quality and performance, accelerating AI innovation in the U.S. and further solidifying its dominance over China in the generative AI space.
KSG assesses that a significant erosion of Google’s online search market share would likely jeopardize future investments by Google in expanding its bandwidth capacity, weakening the U.S. government’s ability to leverage Google’s growing ownership of submarine internet cables. This could hinder efforts to reshape global internet infrastructure to enhance U.S. surveillance capabilities and restrict Chinese access to bandwidth capacity. At the same time, it could create opportunities for China to expand its market share in international undersea cable construction, using its financial resources under the umbrella of the DSR to strengthen internet connectivity across Asia, Africa, and Latin America. KSG, however, assesses that the potential negative impacts on Google’s undersea cable investments from a loss in online search market share are likely to be mitigated by the growing demand for cloud computing and data centers—particularly driven by advancements in AI—which will further drive Google’s investment in submarine cables.
Most Likely Scenario in 12 Months (December 2025)
Judge Mehta will have issued a decision on remedies for Google's search monopoly by August 2025. Potential measures will include requiring Google to divest Chrome and possibly Android, ending exclusive agreements, opening its IP to competitors, and refraining from acquiring or partnering with query-based AI startups. Google will challenge the ruling, prolonging the legal battle for years.
The Trump administration will have softened the DOJ’s proposed remedies, balancing concerns over weakening U.S. tech dominance against geopolitical competition with China, resulting in scaled-back measures such as ending Google’s exclusivity agreements while avoiding divestitures and IP sharing mandates due to Trump’s ambivalence on breaking up Alphabet.
Google will be lobbying the Trump administration to shape the remedies in its favor, prioritizing the termination of exclusivity deals over more disruptive measures such as divestitures or IP sharing to minimize potential disruptions to its core business operations and protect its market dominance.
Competing search engine providers, such as Microsoft and Yahoo, along with AI startups, will be advocating for access to Google’s IP to enhance their market share by improving their capability to deliver more sophisticated and accurate responses to user queries.
The implications for Google’s international market share and the U.S.-China tech rivalry are unlikely to materialize significantly until the case concludes, meaning no substantial changes are expected within the next 12 months. In the longer term, however, if Google is compelled to share data with other search engines and generative AI companies, it could grant the U.S. tech sector access to one of the world’s most valuable data sets, transforming the data amassed through Google’s online search monopoly into a powerful source of domestic technological strength, posing a significant challenge for China to rival.