Google stock jumps 8% after search giant avoids worst-case penalties in antitrust case
A federal judge ruled Tuesday that the company can keep its Chrome browser but will be barred from exclusive contracts and must share search data.
Alphabet shares popped 8% in extended trading as investors celebrated what they viewed as minimal consequences from a historic defeat last year in the landmark antitrust case that found it held an illegal monopoly in its core market of internet search.
U.S. District Judge Amit Mehta ruled against the most severe consequences that were proposed by the U.S. Department of Justice, including selling off its Chrome browser, which provides data that helps its advertising business deliver targeted ads.
"Google will not be required to divest Chrome; nor will the court include a contingent divestiture of the Android operating system in the final judgment," the decision stated. "Plaintiffs overreached in seeking forced divesture of these key assets, which Google did not use to effect any illegal restraints."
The company can make payments to preload products, but it cannot have exclusive contracts, the decision stated.
The DOJ asked Google to stop the practice of "compelled syndication," which refers to the practice of making certain deals with companies to ensure its search engine remains the default choice in browsers and smartphones.
Google pays Apple billions of dollars per year to be the default search engine on iPhones. It's lucrative for Apple and a valuable way for Google to get more search volume and users.
Apple shares rose 4% on Tuesday after hours.
The judge ordered the parties to meet by September 10th for the final judgement.
"Google will not be barred from making payments or offering other consideration to distribution partners for preloading or placement of Google Search, Chrome, or its GenAI products. Cutting off payments from Google almost certainly will impose substantial—in some cases, crippling—downstream harms to distribution partners, related markets, and consumers, which counsels against a broad payment ban."
In a landmark case filed in 2020, the U.S. Department of Justice alleged that Google kept its share of the general search market by creating strong barriers to entry and a feedback loop that sustained its dominance.
The U.S. District Court for the District of Columbia ruled in August 2024 that Google violated Section 2 of the Sherman Act, which outlaws monopolies.
Mehta oversaw the remedies trial in May, where the two parties proposed penalties that should be taken against Google as a result of the monopoly ruling. During that trial, the DOJ asked the judge to force Google to share the data it uses for generating search results, such as data about what users click on
Google said it will appeal the ruling, which would delay any potential penalties.
Mehta ruled Tuesday that Google will have to make available certain search index data and user interaction data, though "not ads data".
The court narrowed the datasets Google will be required to share and said they must occur on "ordinary commercial terms that are consistent with Google's current syndication services."
CNBC
