GGoogle has been officially classified as a monopoly company. On August 5, a federal judge indicted the tech giant for illegally abusing its market power to harm rival search engines. This was the first antitrust defeat for a major internet platform in over 20 years – and in doing so called into question the business practices of Silicon Valley’s most powerful companies.
Many experts speculate that the landmark decision will make judges in other ongoing cases against the Big Tech platforms more receptive to antitrust litigation, especially with regard to the emerging AI industry. Today, the AI ecosystem is dominated by many of the same companies the government is battling in court, and those companies are using the same tactics to consolidate their power in AI markets.
Judge Amit Mehta’s ruling in the Google case focused on the huge sums the company paid companies like Apple and Samsung to make its search engine the default on their smartphones and browsers. These “exclusive agreements” gave Google “access to scale that its competitors cannot match” and left other search engines “at a permanent competitive disadvantage,” Judge Mehta wrote. By effectively “freezing” the existing search ecosystem, the payments “reduced the incentive to invest in and innovate in search.”
Today, similar agreements are cropping up in the AI sector. Companies like Google, Amazon, and Microsoft have entered into numerous partnerships in which developers agree to use the company’s cloud services – sometimes exclusively – in exchange for resources such as cash and cloud credits. Given the high cost of computer hardware and developers’ incessant demand for this infrastructure, the tech giants can often negotiate additional concessions such as equity, technology licenses, or profit-sharing agreements. While structured differently than the agreements discussed in the Google case, these cloud partnerships also serve to secure revenue streams and potentially exclude disruptive competitors from lucrative distribution channels.
Big tech companies are also using more traditional tactics to consolidate their power in the AI market. In a forthcoming report, my colleagues at Georgetown University’s Center for Security and Emerging Technology and I found that Apple, Microsoft, Google, Meta, and Amazon have collectively acquired at least 89 AI companies over the past decade, and those acquisitions tended to target younger startups, a sign that the tech giants may target innovative AI companies before they pose a competitive threat. The companies’ integration along the AI supply chain also presents opportunities for self-preservation and other problematic behaviors they have reportedly used in other digital markets.
If courts continue to rule against the tech giants in ongoing antitrust cases, they would give U.S. authorities powerful ammunition to challenge AI companies. Effective enforcement could help foster a new generation of startups seeking to develop responsible, socially useful AI tools that might not otherwise make it to market.
But while the Google decision opens the door for much-needed antitrust scrutiny of the AI industry, even the most effective enforcement system cannot single-handedly foster a competitive AI sector. Antitrust cases take years to reach court, and even if judges find that a company has behaved illegally, it may be impossible to repair the damage to competition and innovation.
Let’s look at the timeline of the Google case. Google entered into its first agreement with Apple in 2005, and the Justice Department did not file its antitrust lawsuit until 2020. Even Judge Mehta’s ruling earlier this summer was not the end of the matter; it could take years to decide on remedies and complete the appeals process. And it’s unclear whether a remedy will truly change internet search.
Policymakers cannot wait that long when it comes to the AI market. Companies and governments are eager to adopt AI systems, and today it is virtually impossible to develop and scale any of these tools without using infrastructure controlled by large technology companies. Giving the tech giants years to tighten their grip on the industry could permanently damage AI startups’ chances of success and irreversibly undermine innovation.
If policymakers want to prevent the market for AI systems from becoming as stagnant and uncompetitive as the market for search engines, they will need to use other tools. These could include regulating cloud platforms like utilities and creating public infrastructure to offset developers’ dependence on private companies. Creative interventions like these, alongside effective antitrust enforcement, will help maintain an open AI ecosystem that benefits us all, not just the business models of big tech companies.
We will never know how many technological breakthroughs have been squandered because of Google’s monopoly on internet search, but with the right competition policies in place, we can foster a healthier, more dynamic AI ecosystem.
