(Bloomberg) – A well-known Silicon Valley lawyer promoted a theory about antitrust cases when the Justice Department detained Microsoft a decade ago: “The trial is a remedy.”
The theory means forcing monopolists to defend their behaviors that can be a space for other companies, especially new immigrants, to innovate in the market. Today, Google is happening at Alphabet Inc.
Just as Microsoft is believed to have missed the technology community’s move toward mobile platforms because it is very focused on the case of monopoly with the Department of Justice, testimony and internal documents suggest that Google may be lagging behind adoption of AI due to its own antitrust trial, which ended in Washington on Friday.
In Google’s case, this is highlighted by testimony and other evidence, as well as evidence provided by the Department of Justice’s second phase trial on how artificial intelligence affects its core online search business and opens up new deals for startups.
On Wednesday, Apple Inc.’s top trader Eddy Cue went with his testimony Roight Alphabet Stocks. Cue discusses why Apple chose Openai’s Chatgpt over Google’s Google product, the new AI search feature for iPhone. He also said that Apple is “actively researching” revamping its Safari web browser to focus on AI-powered search engines.
His comments show that while Google has been committed to protecting its dominance in its core search business, AI Companies has successfully established viable alternatives to answer questions on the internet.
Tim Wu, a law professor at Columbia University, calls it the effect of “elbow police”: Be careful when monopolists know that someone is watching the action, avoid being seen as a suffocating competitor. Wu, who served as competition adviser to President Joe Biden from 2021 to 2023, said the entire point of the monopoly trial “is to shake everything.”
The second phase of Google’s trial focused on how to solve the problem of a federal judge’s finding that it was illegal monopoly last year. After the debate ended on May 29 and 30, Judge Amit Mehta will determine whether the company breaks down the company by divesting Chrome browsers in other ways or reverting competition to the market.
The search market has been “freezing” for 20 years in terms of competition, Justice’s antitrust chief Gail Slater said at a meeting in Scotland on Friday. “How do we thaw that ice?” she said. “Of course, the key to all of this is scale and data. This will be very important for future competition.”
Lee-Anne Mulholland, Google’s vice president of regulatory affairs, said in a blog post after the trial that the Justice Department’s advice is “extreme” and would hurt competition in the industry.
“In weeks of testimony, we heard news from companies eager to get good funding for Google technology, so they don’t have to innovate for themselves,” she said. “What we didn’t hear is the extreme advice from the Department of Justice that will benefit consumers.”
Apple has partnered with Google for online searches since 2003, with revenues of up to $20 billion a year to make Google’s search engine the default option on its devices. Cue is closely involved in negotiations on the agreement – in fact, he testified in 2023 about a part of the first phase of his antitrust case. Mehta ruled last year that Google illegally monopolized the search market through exclusive deals, citing Apple relations.
However, iPhone manufacturers chose Chatgpt due to AI transactions. Even if the partnership is not unique, Apple has not signed a deal to add Gemini to the phone. Cue barely mentioned Gemini this week, when he appeared in court and participated in the Justice Department’s Phase II trial on how to resolve Google’s illegal acts.
The contrast between the October 2023 and May 2025 tips is shocking. Two years ago, Cue’s testimony was incredible and a little harsh as he defended Apple and Google’s deals on his contract.
Cue was released on Wednesday, actually ecstatic about the amazing power of AI, which he called the fourth technological revolution in the past 35 years. When Cue spoke, he repeatedly emphasized the confusion of AI startups and the Claude of everyone.
Cue seems to suggest what Silicon Valley is talking about as an existential threat to searches over the past two years. While AI chatbots don’t run like search engines, many see it as a challenge in the traditional way people use the internet to find information.
Now, instead of receiving a list of links directing them to the source, users can now get AI-generated answers from the robot, which are from a large repository of existing human-generated data.
In response to CUE’s testimony, Google said that the overall increase in queries for Apple devices have increased as users switch from text-based searches to using voice-activated and image-based searches.
Other witnesses attributed the Google trial to other companies’ business opportunities.
It is no accident that the search market suddenly becomes exciting again, but it is a byproduct of the Google Antrust trial itself. Perplexity’s Dmitry Shevelenko made it clear that the company’s recent success with Lenovo Group Ltd.’s Motorola would not have been achieved without the Justice Department’s antitrust lawsuit against Google.
It is because Google is under “pressure” that sound manufacturers “have some conversations from both operators and browsers,” Perplexity chief business officer Shevelenko said in his own trial testimony last month.
Google actually discovered the key technology for large language models, the main technology for today’s AI startups before they opened their company surveys in 2019. The government believes that Google has not taken advantage of the innovation due to its dominance in the market. It wasn’t until November 2022 that Openai’s Chatgpt swept the world that Google really began to integrate it into search engines.
Google insists it spends billions of dollars in innovation every year and is waiting to introduce AI capabilities to do so responsibly.
“For monopolists, innovation is difficult because it frightens and it can swallow its revenue,” Wu said, noting how AT&T’s innovation division, Bell Laboratories, has invented dozens of useful technologies, including the technology behind answering machines and phones. But A&T refused to bring them to market, fearing that people might use less landline phones.
In Google’s internal documentation on AI, it is obvious that the same “parameter about ending the model” is also obvious, as Wu said. In notes at the October 2024 meeting, top Google executives exerted their impact on the Gemini team about its impact on Google’s search and advertising business and when it can begin to incorporate ads into AI applications.
Vidhya Srinavasan, vice president of advertising and business at Google, told the organization: “We haven’t lost search/advertising traffic yet, but she feels it’s inevitable and we should prepare for Gemini’s success. She wants to speed up the monetization of advertising and gemini writing on the wall.
Google said the company did not see AI sucking searches, with only a small percentage of assignments and coding queries transferred.
– With the assistance of Samuel Stolton, Davey Alba and Julia Love.
More stories like this are available Bloomberg.com
