A pivotal antitrust ruling aimed at addressing Google’s search monopoly may have handed Microsoft its best competitive opening in many years — but it’s still a slim one, and it’s not clear if the Redmond company will even consider it worth the effort.
In the long-awaited decision Tuesday afternoon, U.S. District Judge Amit P. Mehta barred Google from entering into exclusive contracts that make its search engine the default on browsers and smartphones, such as the search giant’s longstanding deal involving Apple’s iPhone.
“The evidence presented required no guesswork about the exclusive agreements’ impacts on competition — they ‘froze’ the search ecosystem in place,” Mehta wrote in the ruling.
The court noted that Google paid an estimated $20 billion to Apple in 2022 alone to be the exclusive default search engine on Safari, a deal the ruling now makes illegal. That arrangement, the judge found, not only locked out rivals like Microsoft but also created a strong disincentive for Apple to build a competing search engine of its own.
But under the ruling, Google can still spend billions to secure default slots, as long as partners remain free to preload or promote rivals. That leaves Microsoft to fight both Google’s scale and its checkbook.
So as an additional fix, Mehta also ordered Google to syndicate its organic search results and text ads to rivals for up to five years on commercially reasonable terms. For Microsoft, that could mean the ability to offer its users search results and ads backed by Google’s industry-leading index.
That could help Microsoft’s Bing search engine — and by extension its Copilot chatbot — compete more effectively against Google’s search dominance. The stakes are higher than ever given the foundational role of search in the emerging world of artificial intelligence.
But it’s not clear if Microsoft will try to take advantage of the remedies. Contacted by GeekWire on Wednesday, a spokesperson said the company had no comment on the ruling.
Ruling faces strong criticism
In the meantime, the decision is already drawing harsh critiques from some legal experts, business leaders, and competitors. That’s because the ruling falls well short of the deep structural changes sought by the Justice Department and state attorneys general.
The plaintiffs asked the court to consider measures such as breaking off Google’s Chrome browser or banning the multibillion-dollar payments Google makes to secure default placement.
Judge Mehta rejected those proposals, citing the risk of harming partners and consumers. As a result, Google retains the ability to pay huge sums to remain the default choice, while still benefiting from the powerful network effects of its scale.
Google’s critics called the ruling overly lenient and a missed opportunity. Some industry analysts called it a “big whiff” by the judge — suggesting it will do little to loosen Google’s grip on the market in practice, even if it creates new openings on paper.
In a twist of historical irony, Microsoft’s own antitrust case from two decades ago played a central role in the ruling. Judge Mehta leaned on that case as his main precedent, even writing, “Like Microsoft before it, Google has thwarted true competition.”
The earlier case set the standard that antitrust enforcers don’t need to prove rivals would have thrived without the illegal conduct — only that the conduct helped preserve monopoly power.
But it also limited the remedies, steering Mehta away from a breakup of Google and toward narrower steps: banning exclusive contracts, ordering data-sharing, and requiring syndication for five years.
‘Brush your teeth and search on Google’
In theory, at least, Mehta’s ruling means Microsoft could get Bing preloaded on smartphones under new distribution deals, while relying on syndicated Google results in the short term, and using the associated data-sharing remedy to better train Bing’s own systems.
Over time, the idea is that Microsoft would build up the volume of queries and user data it needs to compete independently, rather than being permanently reliant on Google.
Microsoft has been working for years to improve its own search index, frequently touting the parity of its own search results in head-to-head comparisons with Google over the years.
However, in Google’s antitrust trial, Microsoft CEO Satya Nadella testified that the power of device and software defaults, reinforced by habit, is nearly impossible to overcome.
“You get up in the morning, you brush your teeth and you search on Google,” Nadella told the court, describing Microsoft as being caught in a “vicious cycle” in which Google’s defaults give it more data, which improves quality, which makes it harder for competitors to win distribution.
Google shares are up more than 8% this morning on news of the ruling.
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