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Google dodges a bullet

Court sanctions look to have left search company well-placed to become a dominant player in the emerging AI market
00:00

{"text":[[{"start":4.99,"text":"Landmark antitrust cases in the technology industry have had a way of marking the transition from one era of computing to the next. They have also accelerated the eclipse of incumbent tech champions and the emergence of new ones, clearing the way for the rise of Microsoft after IBM’s mainframe monopoly came under attack, and for Google after Microsoft was in turn hauled into court."}],[{"start":32.42,"text":"The US case against Google, which reached a critical point with the publication of sanctions against the company on Tuesday, also comes as the tech industry is on the cusp of a new era. This time, however, the incumbent looks to have come out surprisingly unscathed. The rise of chatbots such as ChatGPT might threaten the power of Google’s monopoly, but the search company looks to have been left well-placed to become one of the leaders — and possibly the dominant player — in the emerging AI market."}],[{"start":66.35,"text":"It’s no surprise that the ruling has already infuriated Google’s enemies. US regulators were asleep at the wheel for years as Google built and exploited its search monopoly. When it finally came, last year’s judgment was damning: the company was found to have squeezed out rivals by buying up default positions for its search engine on browsers and mobile handsets, giving it exclusive access to billions of people, including on the iPhone."}],[{"start":97.33,"text":"Unusually for a case like this, though, the sanctions were set with more than one eye on future markets that are still in the process of forming, leading to a less punitive outcome than might have been expected. Justifying his approach, Judge Amit Mehta pointed out that, when the case began at the tail-end of the first Trump administration, investors were leery of investing in any company that might try to challenge Google. Now, by contrast, an “astounding” amount of money has poured into generative AI, posing a direct threat to Google’s core market for the first time. "}],[{"start":137.38,"text":"As a result, Google will not be forced to sell off its Chrome browser — a digital distribution platform reaching an estimated 3.5bn people that AI start-ups OpenAI and Perplexity had both hoped to buy."}],[{"start":154.12,"text":"Nor will it be barred from paying other tech companies to make its search engine the default in their products, meaning that it can still use its vast wealth to make sure it gets prime positioning. Apple, which receives $20bn a year for Google, is unlikely to throw open the iPhone to other bidders who would struggle to pay anything like as much."}],[{"start":178.75,"text":"Instead, Google will be forced to reveal some of its search engine data, a finely crafted ruling that is meant to remove some of the obstacles to anyone hoping to create a competitor. But would-be rivals would still face an uphill climb if they wanted to take an entrenched Google on in its core market."}],[{"start":199.54,"text":"The judge has also tried to prevent Google repeating its anti-competitive behaviour in the AI market, banning it from reaching the same kind of exclusive deals to distribute its AI services that it used in search. In this, there is an echo of the way the US case against Microsoft was settled a quarter of a century ago, with the software company subjected to detailed technical rules."}],[{"start":225.87,"text":"Recognising that some of its old practices would no longer pass regulatory muster, Google has already recast its search distribution deals to end the exclusivity, and to drop the type of “bundling” that involved forcing smartphone companies to promote its search engine if they wanted other Google services."}],[{"start":247.11,"text":"Ironically, rather than signalling new restraints on Google in the AI market, the ruling will, if anything, give it the green light to turn up the heat on its competitors. While the case was going on, Google moved cautiously, refraining from paying to distribute its Gemini AI app in the way that it does for search. It is likely to feel freer now to pour its billions into ensuring its AI is put squarely in front of billions — starting, perhaps, with the iPhone."}],[{"start":280.15000000000003,"text":"And while judge Mehta is right that venture capital has flooded into rivals such as OpenAI, giving them the wherewithal to fight back, investment booms built on speculative venture money are often short lived. At some point those investors will require a return. Google, enjoying a gusher of cash from a search business that has escaped harsher sanctions, is well placed to weather any AI winters that hit the financial markets."}],[{"start":313.43000000000006,"text":"The US case against Microsoft didn’t prevent the software company returning to the top of the tech industry, though it took years to rebound. Largely by staying focused on matching the new AI competition, Google has so far managed to avoid Microsoft’s fate. This week’s antitrust ruling has just made that job easier."}],[{"start":341.12000000000006,"text":""}]],"url":"https://audio.ftmailbox.cn/album/a_1756949757_7877.mp3"}

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