Google May Keep AI Investments But Must Sell Chrome, DOJ Proposes

The DOJ agrees that banning Google from making investments in artificial intelligence could cause ‘unintended consequences in the evolving AI space.’

A Google logo is displayed at an entrance to one of the tech giant's buildings in San Diego, Calif., on Oct. 9, 2024. Mike Blake/Reuters

The U.S. Department of Justice (DOJ) is no longer demanding that Google sell its investments in artificial intelligence (AI) startups, but remains committed to forcing the company to divest its Chrome browser as part of a sweeping antitrust remedy.

In a proposal filed March 7, the DOJ and a coalition of 38 state attorneys general urged the federal court in Washington to order Google to sell Chrome and implement measures to dismantle what a judge ruled was an illegal internet search monopoly.

The proposal says Google to must “promptly and fully divest Chrome, along with any assets or services necessary” to complete the sale to a buyer approved by the plaintiffs. In addition, Google would be required to stop paying partners for preferential search engine placement and notify regulators before entering any joint ventures or partnerships with search or search-ad competitors.

However, antitrust enforcers dropped an earlier demand that Google divest its AI investments, saying such a move could have “unintended consequences in the evolving AI space.” Google must still provide prior notice of future AI investments.

“Through its sheer size and unrestricted power, Google has robbed consumers and businesses of a fundamental promise owed to the public—their right to choose among competing services,” states a summary of the DOJ’s proposal. “Google’s illegal conduct has created an economic goliath, one that wreaks havoc over the marketplace to ensure that—no matter what occurs—Google always wins.”

The DOJ first sued Google in 2020, marking the biggest U.S. tech antitrust case since its battle against Microsoft in the 1990s. The lawsuit alleged that Google used anticompetitive tactics to maintain its dominance, securing contracts that made it the default search engine on web browsers and smartphones.

This dominant position, regulators said, allows Google to manipulate its ad auction system, raising costs for advertisers while boosting its own revenue.

Google, which long holds nearly 90 percent of the U.S. search market, says its dominance stems from superior service. The company argues that users can easily switch search engines and that it still faces competition from Microsoft’s Bing and others.

In August 2024, U.S. District Judge Amit Mehta of the District of Columbia ruled that Google illegally maintained a monopoly over general online search services and some of the ads that run in search results. He pointed to Google’s lucrative contracts with device makers and browser partners, noting that nearly 70 percent of all general search queries in the United States flow through Chrome and other portals that defaults to Google.

“Many users do not know that there is a default search engine, what it is, or that it can be changed,” the ruling stated.

Following the ruling, the DOJ submitted a set of proposed remedies in November 2024, outlining the steps it believes are necessary to weaken Google’s grip on the search market.

The proposal calls for Google to sell off Chrome and, potentially, divest Android. It also seeks to end Google’s lucrative search partnership with Apple, which brings the iPhone maker billions of dollars each year in exchange for making Google the default search engine in Safari.

Additionally, the DOJ wants to give competitors access to Google’s data—for both search and ads—“that would otherwise provide Google an ongoing advantage from its exclusionary conduct.”

Google has pushed back against the DOJ’s demands, calling the proposal a “radical interventionist agenda” that extends far beyond the court’s ruling. The company warns that breaking apart its products would not only disrupt its search business but could also harm “America’s global technological leadership.”

In a counter-proposal submitted in December 2024, Google proposed allowing multiple default search engine agreements across different devices, meaning that iPhone and iPad might feature different default search engines.

The company also offered to limit search revenue deals with hardware manufacturers to one-year contracts instead of long-term agreements, and to give Android phone makers more flexibility when it comes to search and Chrome.

Mehta will hear arguments for the two proposals in April.