A judge handed Alphabet’s Google a key victory on Tuesday, ruling against US prosecutors’ bid to make the tech giant sell off its popular Chrome browser and Android operating system that was part of a larger antitrust crackdown on Big Tech, but ordering Google to share data with rivals to open up competition in online search.
Alphabet shares were up 7.8 per cent in extended trading on Tuesday as investors cheered the judge’s ruling.
While sharing data with competitors will strengthen Google’s rivals to its market-dominating advertising business, not having to sell off Chrome or Android removes a major concern for investors who view them as key pieces to Google’s overall business.
Deepak Mathivanan, an analyst for Cantor Fitzgerald, said the data-sharing requirements pose a competitive risk to Google but not right away.
“It will take a longer period of time for consumers to also embrace these new experiences,” he said.
Spokespeople for the Department of Justice and Google did not immediately reply to requests for comment on Tuesday.
The ruling was also a relief for Apple and other device and Web browser makers, whom US District Judge Amit Mehta said can continue to receive advertising revenue-sharing payments from Google for searches on their devices. Google pays Apple $20 billion annually, Morgan Stanley analysts said last year.
But the ruling made it easier for device makers and others who set Google search as a default to load apps created by Google’s rivals.
Google has said previously that it plans to file an appeal, which means it could take years before the company is required to act on the ruling.
Google CEO Sundar Pichai expressed concerns at trial in the case in April that the data-sharing measures sought by the Justice Department could enable Google’s rivals to reverse-engineer its technology.
However, Mehta did not order Google to share the full range of data prosecutors had requested. And even for competitors who receive the data, “mimicking Google Search would be no easy task,” he wrote.
“For starters, this remedy requires only disclosure of underlying data; it will be up to [the competitors] to engineer the technology and develop the infrastructure to make use of it,” the judge said.
The ruling results from a five-year legal battle between one of the world’s most profitable companies and its home country, the US, where Mehta ruled last year that the company holds an illegal monopoly in online search and related advertising.
At a trial in April, prosecutors argued for far-reaching remedies to restore competition and prevent Google from extending its dominance in search to artificial intelligence.
Google said the proposals would go far beyond what is legally justified and would give away its technology to competitors.
In addition to the case over search, Google is embroiled in litigation over its dominance in other markets.
The company recently said it will continue to fight a ruling requiring it to revamp its app store in a lawsuit won by “Fortnite” maker Epic Games.
And Google is scheduled to go to trial later this month to determine remedies in a separate case brought by the Justice Department where a judge found the company holds illegal monopolies in online advertising technology.
The Justice Department’s two cases against Google are part of a larger bipartisan crackdown by the US on Big Tech firms, which began during President Donald Trump’s first term and includes cases against Meta Platforms, Amazon and Apple.
– Ends