By Dave Michaels and Katherine Blunt

U.S. antitrust enforcers have spent years strategizing how to bring lawsuits against the nation's biggest tech companies, with the goal of restraining their power and promoting competition.

Tuesday's ruling imposing light penalties against Google highlights fundamental challenges with that approach, even when a judge finds a company has engaged in illegal monopolization.

U.S. District Judge Amit Mehta last year issued a landmark ruling that Google, whose parent is Alphabet, illegally maintained its search monopoly by entering distribution deals that boxed out competitors. The decision raised hopes among the company's rivals that the judge would check its power by breaking it up or requiring widespread changes to how it operates. But after a second-phase trial on remedies this year, Mehta on Tuesday said he wouldn't force sweeping changes at Google because the market had changed significantly since the Justice Department sued in 2020, and even since his ruling last year.

The judge, a nominee of President Barack Obama, ordered Google to share some of its search data and barred the company from striking deals that exclude Google's search-engine rivals on devices and browsers. But he rejected a host of more-stringent proposals offered by the Justice Department, including a forced spinoff of the Chrome browser, siding with Google's argument that a light touch was the better approach.

The decision was seen as a best-case outcome for Google, as well as Apple, which had billions of dollars on the line.

"Our antitrust law is focused on harm and not power," said Daniel Francis, an antitrust expert at New York University School of Law. "It's not a good tool for general deconcentration of markets or breaking up monopolies unless they were acquired with illegal conduct."

The case was the federal government's first marquee monopolization case in a generation. The mixed outcome raises warning signs for other cases the federal government has brought against tech giants. In one, the Federal Trade Commission is seeking to break up Meta Platforms' social-media empire, but it struggled at times during a trial this year. Part of Meta's defense centers on the argument that the FTC's view of social media is stale and doesn't account for the rise of new competitors such as TikTok. A judge could rule on the case this year.

A federal judge in Virginia will soon begin considering what to do in another Google case after ruling that the company illegally monopolized online advertising. Again, the Justice Department is pushing for strong remedies, including divestiture of Google's digital marketplace for selling ads for publishers, while the company says far-reaching measures are unwarranted.

U.S. antitrust authorities are also challenging what they allege are monopolistic practices at Amazon.com, Apple, Live Nation Entertainment and Visa. Those cases have yet to go to trial. The companies deny the allegations.

In Tuesday's search ruling, Mehta credited the rise of nascent competitors such as OpenAI, Anthropic and Perplexity with posing a threat to Google's search business. Those companies "changed the course of this case," Mehta wrote.

In a few short years, generative AI systems upended the outsize power of the largest tech companies. At the start of the decade, as the first Trump administration was weighing antitrust actions, U.S. tech giants appeared to have unstoppable power and market dominance in a host of internet businesses.

Now, many of them are scrambling to keep up with the artificial intelligence boom, spending billions of dollars to build their own systems and data centers and trying to hold on to users that flocked to AI startups such as OpenAI.

OpenAI's ChatGPT has seen user growth unlike that of any software or other technology in history, recently crossing 700 million weekly users in August.

U.S. antitrust enforcers haven't broken up a monopoly in 40 years, and the bar for doing so is exceptionally high. The government's last attempt to break up a major corporate monopoly failed in 2001, when a federal appeals court in Washington found that a trial judge overstepped in ordering the breakup of Microsoft.

The recent antitrust cases drew comparisons with the Microsoft litigation. Some antitrust experts point to positive outcomes of the government's efforts to rein in Microsoft's power, including how carefully the company complied with orders meant to improve competition in the ruling's aftermath, especially at a nascent stage of the internet's development.

Some industry participants and analysts expressed initial doubts that the remedies Mehta imposed on Google would have a similar impact.

One closely watched aspect of the case focused on Google's payments to Apple -- totaling more than $20 billion last year -- which allowed its search engine to be the exclusive default search provider on the iPhone. Mehta said Google could no longer pay for exclusivity, but could pay for being the default search provider, so it might largely be business as usual at both companies.

Mehta acknowledged that Google's payments might continue to "shape the market for general search services in Google's favor." Still, he cited concerns about creating "crippling" collateral damage if he cut off billions of dollars in revenue to Apple and other device makers.

The judge required Google to share some search data with rivals in an effort to juice their ability to improve their search results. Tech executives and experts said the requirement might not do much to help Google's competitors improve their search products.

While such data would benefit AI players, its usefulness would likely be delayed significantly by appeals, said Kartik Hosanagar, a professor at the University of Pennsylvania who studies the impact of AI.

"In a fast-evolving space like AI where leaderboards change every few weeks, I don't see how any competitor can build a meaningful data strategy around Google's release of the data," he said.

Some critics of Big Tech said lawmakers and government agencies should focus less on litigation and more on updating the antitrust laws and applying regulations to police practices such as self-preferencing, in which tech platforms promote their own products and services over those offered by competitors. Both ideas failed to advance in Congress in recent years despite bipartisan support for some of the measures.

"We have been too optimistic about what you can accomplish with just antitrust litigation," said Gene Kimmelman, a former Justice Department official. "While the judge did find liability, he was overly reticent to do the kind of business-model surgery necessary to really open the market to competition."

Mehta said as much in his order, writing that he was required to "gaze into a crystal ball" and determine which steps were necessary to restore competition to a market that already seemed to be changing owing to AI. "Not exactly a judge's forte," he added.

Write to Dave Michaels at dave.michaels@wsj.com and Katherine Blunt at katherine.blunt@wsj.com

(END) Dow Jones Newswires

September 03, 2025 21:00 ET (01:00 GMT)

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