The Economist: Thanks to AI, Google and Apple dodge an antitrust bullet

Key topics:Judge spares Google breakup, citing AI’s impact on search competitionAlphabet and Apple shares jump after mild antitrust rulingGoogle must share data with rivals but avoids harsher penalties.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..From The Economist, published under licence. The original article can be found on www.economist.com© 2025 The Economist Newspaper Limited. All rights reserved..The Economist.After Chatgpt was launched in 2022, generative artificial intelligence (ai) quickly came to be seen as an existential threat to the search business of Google, owned by Alphabet. It has turned out to be the firm’s saviour—at least in one sense. On September 2nd Amit Mehta, a federal judge who last year declared Google an illegal monopolist, rejected the government’s demand that the search giant be torn apart, and delivered it the gentlest of punishments. The reason was ai. It “changed the course of this case”, he said.In one of the biggest antitrust climbdowns since Microsoft was itself spared a breakup in 2001, Mr Mehta acquiesced to the meek remedies proposed by Google, and rejected most of the draconian ones demanded by the government. He said the Department of Justice had “overreached” in calling for the divestiture of Google’s Chrome browser and Android operating system.Although he banned Google from signing exclusive deals for the distribution of some products including Chrome, a web browser, and the Gemini app, an ai assistant, he allowed payments to its partners to continue, to avoid potentially “crippling” harm to companies that rely on them. That was a big reprieve for Apple, too, which has received tens of billions of dollars a year for making Google its default search engine..Read more:.Google shares surge after court rules in Antitrust Case, doesn’t need to sell Chrome .Shares of Alphabet soared after the decision. Apple’s rose as well. The ruling eased uncertainty that has hung over both companies all year, as valuations of big-tech peers have risen sharply. It may even encourage closer ties between the two. Some speculate that Apple will partner with Google, running the latter’s Gemini ai products on the iPhone.All the same, it was not unalloyed good news for Google. In an effort to encourage more competition in the search market, which it still dominates, the ruling requires it to share user-interaction and other search-related data with smaller competitors. Google is still expected to appeal against the original verdict that declared it a monopolist. And it faces the risk that it may shortly have to sell some parts of its advertising-related business if a second antitrust trial goes against it.But Mr Mehta wrote that, since last year, when he found Google liable for illegal behaviour, ai has brought big changes to the search market. He noted that hundreds of billions of dollars had flown into startups to create generative-ai products that could disrupt established search businesses such as Google’s. Chatbots like Openai’s Chatgpt, Anthropic’s Claude and Perplexity are being used widely for search-like functions. During hearings about the proposed remedies earlier this year, Eddy Cue, an Apple executive, testified that the volume of Google search queries on Apple’s Safari browser had declined for the first time in 22 years. “There are strong reasons not to jolt the system and to allow market forces to do the work,” the judge wrote.Google will be greatly relieved. Despite the verdict, it has emerged largely unscathed from the biggest tech antitrust case in a quarter of a century. In another reprieve, a fine it was due to receive from the European Commission for breaching antitrust rules over its ad-tech practices was reportedly delayed on September 1st. That appears to be related to the to-and-fro over tariff negotiations between America and the European Union .Not long ago, America’s tech giants were vulnerable to a “techlash” on both sides of the Atlantic. Thanks to generative ai, they are now getting most of the breaks.

The Economist: Thanks to AI, Google and Apple dodge an antitrust bullet

Key topics:

From The Economist, published under licence. The original article can be found on www.economist.com

© 2025 The Economist Newspaper Limited. All rights reserved.

The Economist

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