Google Antitrust: Understanding the Historic Ruling and Its Impact on the Future of Online Search

Craig: yeah. let's unpack the historical google antitrust ruling, what it means for search, ai, startups, and you. we've been talking about this for a while when it first came to, when it first went to court, when google, replied, what the court ruling was saying. maybe we're gonna do all these things. and now we finally have a ruling as to what the punishment will be for google. so what's going on here, john?

Jon: yeah. so, judge emmett mehta, i guess, he's got he had this 277 page ruling, and he found that google violated section two of the sherman act, which you love. well, not love, but we've talked about it a couple times. by maintaining an illegal monopoly in general search services and general text advertising. so the court established that google enjoys an 89.2 share of the market for general search services, which increases even more to 94.9% on mobile devices. so what actually happened was that google paid companies like apple, and we covered this before, but for those of you that don't know, paid them $26,000,000,000 in 2021 alone to be the default search engine on phones and browser. so the judge said that this was illegal monopolistic behavior. but instead of breaking up google like we had talked about and covered that maybe they have to sell off chrome or android, he ordered them to stop these exclusive arrangements and share certain search data with rivals for the next six years. now why does this matter? what is this actually gonna make an impact? well, it's the first major antitrust win against big tech since microsoft in the late nineteen nineties. so while google is able to keep its core business intact, i guess this kind of opens up the door for more competition in search, and it could change how we find information online. but to me, we've already changed how we find information online, right, with all these ai, llms and things that you're talking with. but what are your thoughts on this, craig? do you think this is going to make an impact? or what are your thoughts?

Craig: well, it's gonna make an impact. and so we're just talking. we'll get to the payments and whatnot. we're talking about the data sharing agreement. so we're still not clear as to what exactly needs to be the exact scope and timeline of the implementation remains under discussion. what needs to be shared? how many years? with what qualified competitors? so, you know, the requirement targets company like duckduckgo and other search engines so that they'll have access to this historical data, can tune their search engines based on user behavior that they've had for years and whatnot. so i guess that allows, the new up and comers. i'm thinking less, duckduckgo and more of comet and yep. what openai is doing and whatnot to say, oh, great. we'll grab this data, and we'll build it into our search engine and potentially leapfrog google because they're giving us this information. so, i think it helps, the competition, but the competition was heating up anyway as everyone has to change. like, if you haven't noticed, google's great at serving you targeted ads for exactly what you want. but the articles and what it serves below the, targeted ads aren't that great. so it feels like they're not giving you the highest quality results on purpose to keep you there longer, to force you to go to their ads. you know, there's all sorts of videos on that out there. so as, there's this new saying, of these products and whatnot over time that new comers come along. now they had a majority, agreed to 90% market share and whatnot, but it's just starting to change. you know? i think the judge was a little bit lenient here because the competition is starting to happen now. like, they're starting to see that openai, other multibillion dollar companies out there are producing browsers that are now competition and taking, i wouldn't necessarily say significant yet, but taking a percentage of search away from them. and as that continues to happen, it's gonna level the playing field. and it just becomes as google's ai summary is gonna be better than openai's or perplexities or pods or whoever's.

Jon: yeah. and just to kind of get into the details of the data sharing requirements, so the remedies that were talked about include sophisticated technical data sharing mandates. so google will have to make available certain search index data and user interaction data, though not ads data, which is kinda weird to me because that's where their monopoly lies a lot. so the court specified that datasets google will be required to share must occur on ordinary commercial terms that are consistent with google's current syndication services. i have no clue what that means, but people in the industry or in the search industry and stuff will probably know. but, so i think this creates, like, more of a technical framework where competitors can access this search index. and it's it's not the granular advertising data that drives google's revenue model, though. so i don't know how beneficial that is. right?

Craig: but i expert. yeah. yeah. i'm not an expert either. so i imagine there's definite benefit because it depends again how many years. yeah. you know, and how much data they have more than their competition. yeah. so that, is interesting. and the fact that you're like like, let's face it. with 90% of the searches on your android phones, on your iphones, on, you know, every platform being google, they have a massive head start on search way more than anyone else. so, when you say we don't know how much it'll help, but if the rest of the market is 10% or less, you know, they got 90% of the data, and they're holding it to themselves. so sharing that would be significant.

Jon: yeah. and then the other part too is that he explicitly addressed ai's role in reshaping the search market. so ai models, obviously, they represent a long term threat to the search industry as chatbots and other ai technologies have they become more advanced and behave more like search engine. so the remedies recognize that the need to prevent google from using the same anti competitive tactics for its gen ai products as it used to monopolize the search market. but i think he's a little too late because, like, they've already google has already pretty much integrated a lot of their ai products all in together to work better together. so, like, it's like it's like the apple ecosystem. right? when you're in the google ecosystem, just things interact better. but you would know better than i because i think you're using you're using gemini more than i am.

Craig: yeah. but i'm just using gemini, like, when i use gemini and when i use the ai studio, they're starting to integrate it better into the workplace where you can use gemini in sheets and some of the other apps automatically, which is very interesting. i haven't done too much of a deep dive on how i would use that in my workflows except for a couple where it automatically, adds metadata and stuff for me. so which is interesting. you don't have to call any external thing. you add something to the sheet, and it automatically does stuff. but, that aside, you know, microsoft has got a big deal with openai right now, i think. make and is that is it what they're

Jon: going with? to claude, microsoft.

Craig: that's it. yeah. so they're gonna spend billions with claude. yeah. so they're moving away from openai. but other people are, the eu is going a 100% openai. so you can see that there's a huge amount of competition here, and apple, i believe, right now is putting openai as their default ai until they get whatever they got going. so they have a big deal. so when people say it's not the same like, google doesn't have the same monopoly on ai systems as they do on search. yeah. so google isn't the only answer. so apple and anyone else can go to any one of these other providers and get just as good or equivalent or relatively equivalent, services rather from search is hard. yeah. but the monopoly part is still somewhat there where android is now, what, 50%, 60%, or 70% of the market, whatever is android. so if google locks that in, you know, they're gonna have to open up that a bit. right? right. i think that's what's gonna happen is you're going to just like a while ago, they made, apple and google open up what's your default browser so you can use default browsers on your phone other than the, you know, the one provided by apple or google.

Jon: i think that was just apple because android, you could always do that.

Craig: ah, there you go. it's apple. yeah. and then, we're gonna have the same thing here with ai, where you're gonna have to have multiple options to have, choose the ai you wanna use. yeah. and i think that's gonna be legally mandated.

Jon: yeah. so we're talking as we're talking about these, these strategies, i'm seeing perplexity because we don't really talk about perplexity much. but there, i feel like they're doing more of the, partnerships with companies like rogers and things like that. because rogers now if you're a rogers customer, you get perpep perplexity pro. and so i like, i still think perplexity is a great, is a great product. i'm i'm super excited to try comet. perplexity, if you're listening, i'd love to try it. but, it's crazy to see all these different strategies that these different ai groups are having. and where and i know we're getting a little off topic, but i, like, my curiosity is, like, are we gonna have these niche kind of ai products? i think that's where we're going maybe. right?

Craig: well, that's what i think. i think in the end, we talked a little bit about this, about quantum mechanics on the edge and, quantum ai on the edge controlling robot arms and stuff. we're gonna have, and i think i may have talked to you about this, but i talk about this all the time. we're getting to the point where we're gonna have, small language models that are, different from our long large language models. so i'll have 10 or 20 or 30 small language models on my machine that do things for me. this one writes, and it and when i say small, i stripped out all language but english. i've done this. i've done that. i've shrunk it all down. it's this. it does this for me. you know, i may wanna do english and french because i'm in canada. whatever. but the point being is you look at a big model. it's, you know, 90 languages. it's this. it's just all these parameters. and then we say, okay. this is my small language model that's for javascript. all it does is javascript. all it knows is javascript. that's all it knows. it doesn't know any other coding language. and then i have one for this, and then i have one for that. that's all they know. and it uses those specific things. everything out is taken away, to hone it down to that little thing. so it can be fast. it can be compact. so you only have to carry around the ones, that you want. plus, you'll have your generic llms that do all these things, some that'll be public and some that'll be private as we start, to really heat up this privacy war and where the information goes and who controls it and whatnot. the more you give over to ai, you know, we're seeing ai in hollywood, ai in art, ai everywhere. so the more you give to it, the more the less value you have. so we have to start thinking about

Jon: that. yeah.

Craig: but, you know, it's coming. back to this, though, the judge, said, they rejected bans on the default search agreement. so google can continue paying billions to remain the default search option on devices, so that can continue to happen. so, mozilla and firefox can continue on as they're getting all that money from, google, 89, 90% of the revenue. and google stock reaction was immediate and dramatic. alphabet's, inc. stock surged 9% following the ruling increase or added approximately 230,000,000,000 to the, company's market value.

Jon: yeah. so this this this surprised me, but, i guess it kinda makes sense. but, yeah, we'll have to see what the implications are going forward.

Craig: yeah. and we'll have to see how regulators approach future tech antitrust cases. and the court's reluctant to impose structural remedies reflects broader changes in the regulating digital markets. policymakers must balance innovation concerns with competitive, enforcement.

Jon: yeah.

Craig: so

Jon: just to put this into perspective for those of you like, this just blew me away, but google paid more to be your default search engine than many countries' entire economies.

Craig: yeah. think about that.

Jon: like, just think about that. that's nuts.

Craig: so whichever way the appeals go, the takeaway is clear. prepare for more open ai shaped feature, and it's on its way. we'd love to hear what your thoughts are on this, how it's gonna shape the future of antitrust and tech companies as well as the future of browser and ai wars. let us know what your comments are.