A U.S. court has decided that Google LLC won’t be forced to sell off its Chrome browser or divest its Android operating system after being found guilty of operating an illegal online search monopoly in a landmark antitrust case last year.

The ruling is seen as a significant win for Google, which avoided the most severe potential penalty that could have been imposed on it during the trial’s remedies phase. Investors agreed, lifting the stock more than 8% in trading Wednesday.

U.S. District Judge Amit Mehta said that although Google will be allowed to keep Chrome and Android, it will have to make some data available to qualified competitors to help promote better competition in the online search industry. It’s also going to be barred from entering into or maintaining exclusive contracts designed to promote services such as Chrome, Google Search, Google Assistant and the Gemini artificial intelligence application.

Google’s exclusive agreements ensure broad access to its services and generate a significant amount of revenue, but the company proposed dropping them as a potential remedy, which was accepted by Judge Mehta in part.

The antitrust trial put Google’s core search business under the microscope at a time when it’s facing an unprecedented challenge in the face of AI chatbots. Google is also fighting to protect its online advertising business after being found guilty of running an illegal monopoly in a separate trial earlier this year.

“Google will not be required to Chrome; nor will the court include a contingent divestiture of the Android operating system in the final judgment,” Mehta’s ruling read. The decision was closely watched by the industry, as several other technology giants are in the midst of antitrust litigation battles with the U.S. government.

Mehta noted that the rapid rise of generative AI applications as a significant threat to traditional search engines has “changed the course of this case,” and said that he needs to ensure Google’s dominance doesn’t carry over into that industry. “Unlike the typical case where the court’s job is to resolve a dispute based on historic facts, here the court is asked to gaze into a crystal ball and look to the future,” Mehta wrote. “Not exactly a judge’s forte.”

Last fall, Google was found guilty of violating U.S. antitrust laws with its search business practices. Mehta found that Google “is a monopolist, and it has acted as one to maintain its monopoly.”

After the guilty verdict, the trial entered the so-called “remedies” phase, where Google disagreed with the Justice Department’s proposed solutions, arguing that they would make it more difficult for consumers to access their preferred search engines. It also claimed the remedies would hurt economic growth and American tech leadership. Google Vice President and Chrome General Manager Parisa Tabriz told the court that any decision to sell off Chrome would likely make the browser “insecure and obsolete,” although several companies, including OpenAI, expressed an interest in buying it.

The bigger problem for Judge Mehta was Google’s exclusive, multibillion-dollar contracts with smartphone makers like Apple Inc. They ensure that Google’s search engine is the default option on millions of new devices, including the latest iPhone models.

The judge said these agreements give Google an unfair advantage because they rely on consumer habit rather than choice. He noted that as of 2020, more than 95% of all smartphone search queries made by U.S. citizens went through Google Search.

By preventing Google from entering into these exclusive contracts, Mehta said the court would go some way toward leveling the playing field. As such, the company will be prohibited from making any agreements that require hardware makers to preload Google Search, Chrome, Google Assistant or Gemini on their devices in order to access the popular Google Play app store.

Google is still allowed to pay partners to distribute its services, including Google Search, but the deals cannot be exclusive. Google maintains an extremely lucrative deal with Apple, paying the iPhone maker billions of dollars to be the default search option on its devices. The practical impact of the ruling remains to be seen, but it’s likely that many smartphone makers will continue to preload Google’s applications and services anyway, thanks to their vast popularity. However, they will no longer be the default options.

“Cutting off payments from Google almost certainly will impose substantial – in some cases, crippling – downstream harms to distribution partners, related markets, and consumers, which counsels against a broad payment ban,” the filing read.

A positive result for Google

Dan Ives of Wedbush Securities said the ruling is a victory for Google and Apple. “While in theory Google is barred from exclusive deals for search, this now lays the groundwork for Apple to continue its deal and ultimately likely double down on more AI-related partnerships with Google Gemini down the road,” he wrote in a research note.

In any case, the prospect of Google being forced to offload Chrome was always unlikely, so the judge’s ruling is not that surprising, analyst Rob Enderle of the Enderle Group told SiliconANGLE. “There are too many dependencies with Chrome to make it easy, and the result would likely be just as devastating to Chrome users as it would have been to Google itself,” the analyst said. “The courts, or at least the smart ones, always try to mitigate collateral damage if they can, and that’s likely what happened here.”

NetChoice, a lobbying group that advocates for free expression and free enterprise on the internet, welcomed the less severe penalties handed down by Judge Mehta, saying the ruling recognizes that the world is entering a new era where humility is essential for free markets to work. “Artificial intelligence is rapidly transforming the tech industry globally, and President Trump has set out an ambitious agenda to usher in a new Golden Age for American innovation and ensure that U.S. companies continue to dominate international markets,” it said in a statement. “Dismantling Google, as the DOJ sought, would have threatened the American tech industry at a time when our leadership is needed now more than ever. The Court took a more balanced approach.”

Google’s biggest punishment appears to be Judge Mehta’s ruling that it will have to make certain types of search index and user interaction data available to its competitors, though it will be allowed to retain data on search-related advertising. Google’s search index is basically an enormous database of the pages and information on the internet. When someone types a query into Google’s search engine, it scans this database to return links to webpages.

The data, which includes users’ clicks and search queries, could help competitors build more viable search products that better compete with Google, the ruling said.

However, Google’s competitors will still have to pay to access the data. According to the ruling, the data must be licensed on “ordinary commercial terms that are consistent with Google’s current syndication services.”

Enderle said the penalties imposed by Judge Mehta lay the foundation for further, more severe consequences for Google should it ever be found to be continuing its monopolistic practices. “If there is a next time, I would argue that it will be much more painful for Google,” he said.

The analyst also pointed out that it’s not only the U.S. that is taking action against Google. The search giant was previously found guilty of using its Android platform to run a monopoly in the European Union, and the courts there slapped it with a significant €4.12 billion ($4.74 billion) fine, which was finally confirmed when Google’s appeal was denied last month.

“The EU penalty was far more painful, and I think Google will realize it got lucky here,” Enderle said. “But it will also know that its luck might not survive a change in the White House administration, so if it doesn’t take this seriously and feels it will never be held to account, it will likely face much more dire penalties in future.”

Photo: Spiros Vathis/Flickr