Google Should Worry About Regulators’ Case Against Its AI Push

If investors in Alphabet Inc. weren’t all that worried at first about the possible consequences of Google losing its search antitrust case, they perhaps should be now.

After a district court’s ruling in August that Google is an illegal monopoly, the Justice Department has made it clear it feels handicapping the company’s future competitive advantage in artificial intelligence would be one effective way to fix the damage — making Google’s already monumental task of keeping up with AI rivals even more difficult.

That’s my main takeaway from the government’s latest filing, made public on Tuesday, that for the first time goes into detail on the ideas regulators are considering as possible remedies for Google’s behavior.

And that’s all they really are at this point: ideas. They will be fleshed out in future filings and will face multiple rounds of rulings and appeals before being enforced. Google said in a statement that the Justice Department’s proposals would go “well beyond the legal scope of the Court’s decision.”

The filing suggests several of the fixes that had been speculated by antitrust experts, such as nixing Google’s ability to enter into exclusive contracts to make Google the default search engine on various platforms. The government may also call for the judge to force Google to spin out top products as separate companies — specifically, its Chrome browser, which uses Google Search by default, and the Android mobile operating system, which similarly favors Google’s own products like Search, Maps and Gmail.

On this, at least, I’m inclined to agree with Google’s protestations. It argues that spinning out Android in particular would be bad for consumers, leading to price increases for devices, particularly more affordable smartphones, that now use Android for free. An independent Android, separated from Google’s engineering prowess and resources, would find it far more difficult to maintain feature parity and competitiveness with Apple’s iOS.