Federal Judge Orders Google to Change Practices, But Company Not Disbanded

A federal judge mandated changes to Google’s search engine operations to address illegal monopolistic behaviors, yet chose not to break up the company.

US District Judge Amit Mehta found that Google had established an illegal monopoly but stopped short of disbanding it. Instead, he imposed new regulations on how the company directs traffic to its products, including prohibiting billion-dollar default search agreements.

Mehta has prohibited Google from entering into exclusive agreements central to the case and instructed the company to provide limited user interaction data to select competitors. He noted that prosecutors miscalculated their case by dismissing the government’s bid to break up Chrome or Android, using assets that weren’t directly involved in illegal actions.

After the ruling, Google saw a rise of over 6% in after-hours trading, while Apple also increased by over 3%. This allows Google to maintain its default placement on Apple devices, a transaction valued at around $20 billion annually. Although Alphabet, Google’s parent company, could challenge the decision, there was no immediate response from the involved parties.

This ruling comes as Google faces various regulatory challenges, including heightened scrutiny from Federal Trade Commission Chairman Andrew Ferguson regarding alleged political bias in Gmail. In a letter dated August 28 to Alphabet CEO Sundar Pichai, Ferguson expressed concerns that Gmail’s spam filters might allow certain democratic messages while disproportionately blocking those from Republicans, which could lead to federal investigations.