Federal judge orders Google to end exclusive search distribution deals, but won’t force Google to sell Chrome

A federal judge ruled that Google can no longer enter into exclusive distribution deals to make its search engine or its Gemini AI technology the default option on phones and other devices and said Google must share some of its search data with competitors, but said he would not force the $2.6 trillion company to spin off some of its key assets like the Chrome web browser.

The ruling in the Department of Justice’s landmark antitrust case against Google-parent Alphabet, stopped short of what could have been the government’s most severe action in decades to curb the power of a monopoly—and acknowledged the potentially massive impact that artificial intelligence technology could have on the search market.

“Plaintiffs overreached in seeking forced divesture” of Google’s Chrome web browser and of the Android operating system, “which Google did not use to effect any illegal restraints,” wrote U.S. District Court Judge Amit Mehta in a 250-page ruling on Tuesday.

But, he said, the emergence of generative AI has “changed the course of this case.”

“Unlike the typical case where the court’s job is to resolve a dispute based on historic facts, here the court is asked to gaze into a crystal ball and look to the future. Not exactly a judge’s forte,” wrote Mehta.

Shares of Google-parent Alphabet surged 7.5% in extended trading on Tuesday. Apple, which receives tens of billions of dollars to makes Google the default search engine on the iPhone, saw its stock increase 3.5% after the ruling.

Mehta ruled in August 2024 that Alphabet has maintained an illegal monopoly in internet search. He found that the company abused its dominant market position by paying device manufacturers, such as Apple, to make Google the default search engine for their smartphones and tablets.

Mehta has been considering remedies for the case ever since, including conducting three weeks of hearings in April and May that included appearances by a number of prominent industry executives, including Alphabet CEO Sundar Pichai and executives from Apple, OpenAI, News Corp., and Perplexity.

Google has said it will appeal both Mehta’s 2024 finding that it has violated antitrust law and his proposed remedy. That means it could take until 2026 or 2027 to reach a final resolution. The case could ultimately reach the U.S. Supreme Court.

Mehta’s ruling comes at what is already a fraught moment for Alphabet. The company is facing the biggest shift in the way people navigate the internet and find information since the creation of Google itself. AI chatbots from companies such as OpenAI, Anthropic, and Perplexity provide users with concise answers to questions, not lists of links.

While Google has sought to integrate chatbot-like features and AI-generated “overviews” into its core Search product, doing so potentially jeopardizes its business model, which sees it compensated for the traffic it sends to other sites and for the sponsored-links that appear at the top of search results. Search accounts for 56% of Alphabet’s annual $350 billion in annual revenues and even more of its profits. (The company does not break out Google’s profits by segment.)

This story was originally featured on Fortune.com