Google’s Proposed Final Judgment: Addressing Antitrust Concerns

In response to the court’s ruling that some of its agreements violated Section 2 of the Sherman Act, Google has submitted a Proposed Final Judgment (PFJ) to address the issues raised. While Google respectfully disagrees with the liability determination, it acknowledges the need for adjustments to ensure compliance with antitrust laws.

The Proposed Final Judgment (PFJ) is a formal legal document submitted by Google in response to a court ruling in an antitrust case. It outlines the commitments and remedies Google is willing to undertake to address the court’s findings that certain business practices violated Section 2 of the Sherman Act.

With this PFJ, Google seeks to balance the court’s findings with its commitment to fostering competition, preserving consumer benefits, and maintaining innovation in the fast-evolving search and AI industries.

Here’s an outline of the key measures proposed by Google in its PFJ:

Key Provisions in Google’s Proposed Final Judgment

1. Decoupling Licensing Agreements

• Google will no longer require Android device manufacturers to license its Search or Chrome applications to access the Google Play Store or other Google apps.
• This change ensures manufacturers can preload rival search engines or browsers on their devices without restrictions.
• Google will not impose terms that limit partners’ ability to use or promote competing services.

“Android partners would not need to license Google Search (or Chrome) in order to preload Google Play or other Google applications on Android devices, addressing the Court’s concerns about device manufacturers’ options to preload a rival search engine.”

2. Prohibition on Exclusive Agreements

• Google commits to ending practices that condition payments or agreements on the exclusion of rival search engines or browsers.
• This provision directly addresses concerns about the foreclosure of competition in search engine distribution.

3. Generative AI Provisions

• Google’s Gemini Assistant chatbot (formerly Bard) will not be tied to the licensing of other Google products like Search, Chrome, or Google Play.
• Android partners will have full freedom to preload rival AI chatbot services on their devices.

“Google’s PFJ provides that Android partners can license Google Play, Search, and/or Chrome without also licensing Google’s Gemini Assistant mobile application.”

4. Browser Default Agreements

• Agreements with browser developers to set Google as the default search engine will be subject to the following conditions:
  • They must be non-exclusive.
  • They must be terminable on an annual basis.
  • Browser developers will have the flexibility to choose different default search engines for various operating system versions or browsing modes.
• Google will not sign agreements with browser developers that extend beyond one year or enforce exclusivity for default search engine settings.

“Any agreement that results in a browser developer choosing to set Google as the default…must be terminable on an annual basis, and browser developers may set different search engines as the default across different browser operating system versions and different browsing modes.”

5. Shortened Remedy Term

• The proposed judgment has a three-year term, contrasting with the ten-year term sought by plaintiffs.
• Google argues that this shorter term is better suited to the rapidly changing nature of the search and artificial intelligence markets.
• Google will not agree to overly invasive measures, such as a ten-year remedy term, as such restrictions could hinder innovation and market adaptability.

“Regulating a fast-changing industry like search with an invasive decree like the one proposed by Plaintiffs would harm competition, innovation, and consumers.”

6. Focus on Tailored Remedies

• Google asserts that any remedies should be narrowly tailored to address the specific conduct deemed anticompetitive.
• Overly broad or regulatory interventions could harm innovation, competition, and consumer benefits.

7. Commitment to Compliance and Revisions

• Google plans to file a revised proposal by March 2025, as required by the court.
• It reserves the right to appeal the court’s liability determination and any final judgment.

Apple’s Concerns: Challenges and Suggestions

Apple, a key partner in Google’s search distribution, has expressed its reservations about the plaintiffs’ proposed remedies and their potential impact. Apple’s Senior Vice President, Eddy Cue, has outlined the company’s stance in a recent declaration:

1. Existing Revenue Sharing Agreements

• Apple receives significant revenue from Google for making Google Search the default on Safari. In 2022, this agreement generated $20 billion for Apple.
• Plaintiffs propose prohibiting revenue-sharing agreements for the next 10 years, which Apple argues would unfairly restrict its business.

2. Impact of Revenue Sharing Prohibition

• Apple highlights two undesirable outcomes if revenue sharing is banned:
  • Allowing Google as an option without compensation, giving Google free access to Apple users.
  • Removing Google Search as an option, which would harm user satisfaction given Google’s popularity.

3. Challenges in Developing an Apple Search Engine

• Apple dismisses the assumption that it could create a competing search engine due to:
  • The cost and time required for development.
  • Uncertainty due to the evolving AI landscape.
  • Lack of expertise and infrastructure in search advertising, which conflicts with Apple’s privacy-first philosophy.

4. Apple’s Proposal for Balanced Remedies

• Apple urges the court to craft remedies that:
  • Avoid limiting its ability to collaborate with Google and other partners.
  • Preserve its ability to enhance user experience while respecting its privacy commitments.

Conclusion: Striking a Balance Between Competition and Innovation

Both Google and Apple highlight the need for carefully crafted remedies that address anticompetitive concerns without hampering innovation or consumer benefits. Google’s Proposed Final Judgment seeks to comply with the court’s ruling while allowing it to compete on merit, whereas Apple warns against overly restrictive measures that could harm its users and business operations. Together, their positions underscore the complexities of fostering fair competition in the rapidly evolving search and AI markets.

Related Links:

• Antitrust Ruling on Google: Key Transparency Measures for Advertisers Explained
• Proposed Remedies to Break Google’s Monopoly: A Comprehensive Antitrust Framework
• Google’s Monopoly Power Confirmed in Landmark Antitrust Ruling