DOJ Drops Bid to Force Google to Divest AI Investments

The US Department of Justice (DOJ) has dropped its proposal to force Google's parent company, Alphabet, to sell its investments in artificial intelligence (AI) companies, including OpenAI competitor Anthropic, Reuters reports.

However, the DOJ and a coalition of 38 state attorneys general are still pursuing a court order requiring Google to sell its Chrome browser and implement other measures aimed at addressing what a judge has deemed Google's illegal search monopoly. This follows Judge Amit Mehta's August ruling that Google illegally crushed its competition in search.

"The American dream is about higher values than just cheap goods and 'free' online services. These values include freedom of speech, freedom of association, freedom to innovate, and freedom to compete in a market undistorted by the controlling hand of a monopolist," prosecutors wrote in court papers filed in Washington.

In response, a Google spokesperson stated that the "sweeping proposals continue to go miles beyond the Court's decision, and would harm America's consumers, economy and national security." A spokesperson for Anthropic has yet to comment.

President Donald Trump, who has vowed to continue his administration's crackdown on Big Tech, has appointed veteran antitrust attorney Gail Slater to lead the DOJ's efforts. Slater, formerly an economic advisor to Vice President JD Vance, faces Senate confirmation hearings where her commitment to antitrust enforcement and resource allocation will be scrutinized. Slater has a history of working with and against tech companies, including past work at Fox Corp, Roku, and representing Big Tech companies at the now-defunct Internet Association.

Google holds a significant minority stake in Anthropic, worth billions of dollars. Anthropic argued to the court in February that losing this investment would hand a competitive advantage to OpenAI and its partner, Microsoft.

Prosecutors, in their final proposal filed on Friday, indicated that evidence gathered since their November draft recommendation revealed a potential for unintended consequences in the evolving AI landscape if Google were banned from AI investments. They now seek a requirement for Google to provide prior notice to the government regarding future investments in generative AI.

Google, which has announced its intention to appeal Judge Mehta's ruling, has presented its own proposal to loosen agreements with Apple and others, aiming to establish Google as the default search engine on new devices. Google is proposing that browser companies like Apple and Mozilla continue to be able to strike deals to make Google their default search provider, but those deals wouldn’t prevent them from striking deals to make other search providers the default on other devices, and Google’s search deals would only last 12 months. They are also proposing to allow companies to preload multiple search engines and Google apps without preloading Google's search function or Chrome browser. US District Judge Amit Mehta has scheduled a trial on these proposals for April.

This case is one of several US antitrust cases targeting Big Tech companies, including Apple, Meta Platforms, and Amazon.com, all facing allegations of maintaining illegal monopolies in their respective markets.

Since Trump's reelection, Google has argued that the DOJ's approach in this case would hinder its ability to compete in AI, potentially jeopardizing America's global economic and technological leadership. Sundar Pichai, CEO of Google and its parent company Alphabet, previously stated that he is confident Google will do well in the long run, even though this process will likely take many years.

While many of the measures initially proposed by prosecutors in November remain intact with minor adjustments, a requirement for Google to share search query data with competitors has been amended to allow Google to charge a marginal fee for access, and to stipulate that competitors must not pose a national security risk.

The proposal has garnered support from both Democratic and Republican attorneys general, as well as the Alphabet Workers Union-CWA. Google's search engine accounts for about 90% of all online searches globally, according to web traffic analysis platform Statcounter.