The whole world is "besieging and suppressing" Google

Google is encountering the most severe survival crisis in its history.

According to media reports, on Monday local time in the United States, at the Google antitrust case remediation hearing, US Department of Justice prosecutor David Dalquist said that Google needs to be subject to strong measures to prevent it from using artificial intelligence products to further consolidate its dominant position in the field of online search. The lawyer said, "We are at a turning point." Courts have the opportunity to correct the monopolies of the contemporary Internet and restore competition in the coming decades.

This hearing was a ruling made on April 17th. At that time, Virginia Federal Judge Leona Brinkma ruled that Google had violated antitrust laws in both the advertising trading platform and the advertising server (i.e., the tool used by websites to sell advertising Spaces) markets. It was planned to spend three weeks hearing arguments and evidence on what remedial measures should be taken to restore market competition.

According to the claims of the US Department of Justice in court documents, Google has to pay a heavy price for its monopolistic behavior. The punitive measures include: requiring the forced sale of the Chrome browser, terminating the agreement for Google's search engine to obtain default status on devices such as smartphones, and requiring the provision of data access rights to competitors.

This means that Google's advertising business worth 31 billion US dollars is at risk of being spun off.

Last Sunday, Lee Anne Mulholland, Google's vice president of regulatory affairs, said in a blog post that if the court adopted the remedial measures proposed by the Department of Justice, "it would curb innovation in the United States at a critical moment".

This is not the first time that Google has lost an antitrust lawsuit recently. Last August, US District Judge Amit Mehta in Washington, D.C. ruled that Google's dominant search engine was an illegal monopoly.

It can be said that Google's situation is becoming increasingly difficult. Google's antitrust lawsuit began during the first administration of Trump. In 2020, the US Department of Justice, in conjunction with attorneys general from various states and jurisdictions, jointly sued Google, accusing it of paying billions of dollars to tech companies such as Apple and Samsung, smartphone manufacturers, and wireless service providers in exchange for setting Google Search as the default choice for mobile phones and web browsers, and signing exclusive agreements. That is, if these partners choose to receive a share of Google's search revenue, they cannot pre-install and promote other search engines.

This case is regarded as the most significant technology antitrust case since the antitrust lawsuit between the Department of Justice and Microsoft in the 1990s. Even in the Biden administration, the case is still advancing. Dalquist said, "The long history of the case shows that both parties are opposed to Google's actions."

Dalquist also said that even in the field of artificial intelligence, Google is currently lagging behind OpenAI, but Google's monopoly in search helps improve its AI products, which is also a way to guide users to use its search engine.

Although the business targeted by the antitrust case only accounts for 11% of Google's total advertising revenue, even in the face of a spin-off, the company's core business model may still remain relatively stable.

But this is still a lawsuit that Google cannot afford to lose. Therefore, Google stated that once a final judgment is made, it will appeal.

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Except in the United States, Google is embroiled in a global anti-monopoly wave.

On April 15 local time, the Japan Fair Trade Commission determined that Google had violated the Anti-Monopoly Law in the Japanese market and issued a restraining order, demanding that it immediately cease its unfair competition practices.

According to the official announcement, the Japanese side determined that when Google signed licensing agreements with at least six Android system mobile phone manufacturers, on the condition of allowing the installation of its application store Google Play, it required these manufacturers to pre-install software such as Google Search and Chrome browser on the mobile phones they produced, and the software ICONS should be located in a prominent position on the mobile phone screen. Furthermore, Google has also signed benefit-sharing agreements with at least four Android system mobile phone manufacturers, requiring these manufacturers not to pre-install competitors' software on their phones.

The Japanese anti-monopoly agency has demanded that Google make immediate rectifications and establish a supervision system composed of independent third parties.

Meanwhile, Google has also been investigated in the Chinese market for suspected violations of the Anti-Monopoly Law of the People's Republic of China. The specific handling results are yet to be disclosed by the authorities.

In Europe, which has a long history in anti-monopoly and anti-unfair competition, Google has always been a "guest of honor" for regulators.

As early as 2017, the European Union fined Google 2.42 billion euros on the grounds that Google's Shopping price comparison service abused its dominant position in the search engine market by giving priority to displaying its own shopping price comparison service (Google Shopping) in search results, and required Google to rectify and allow competitors to compete fairly. This case is also the first major antitrust penalty imposed by the European Union against a tech giant.

In 2018, the European Union again demanded that Google stop the bundling behavior and allow device manufacturers to choose to pre-install applications on the grounds that Google forced mobile phone manufacturers to pre-install Google Search and Chrome browser, and prohibited manufacturers from pre-installing competing applications through economic incentives and prevented manufacturers from using unofficial Android systems (such as forked versions). And it issued the highest antitrust fine of 4.34 billion euros in the history of the European Union.

In 2019, the European Union filed an online advertising monopoly case against Google, accusing it of restricting third-party websites from displaying competitors' advertisements (such as Microsoft and Yahoo) through AdSense advertising service contracts, thereby hindering market competition. Google was prohibited from setting exclusive clauses in advertising contracts, was required to open advertising cooperation channels, and was fined 1.49 billion euros

The three lawsuits filed by the European Union have cumulatively demanded a fine of 8.25 billion euros for Google. Although Google appealed against the first two cases, on the morning of September 10, 2024, the EU court announced that it would uphold the lower court's ruling. Google failed to overturn the EU's fine of 2.4 billion euros for its monopolistic practices.

Of course, these fines are insignificant when compared to Google's revenue of 350.02 billion US dollars and net profit of 100.12 billion US dollars in 2024.

Over the years, Google has been through numerous battles in anti-monopoly investigations. Google CEO Pichai said, "I am well aware that we are facing scrutiny on a global scale." This is closely related to our scale and achievements.

Although this split is coming with great force, some analysts believe that based on the experience of the "Microsoft split case", the US federal court is likely to back down at the last minute. After all, asking an American company to really give up its market position is not in the interests of the United States itself. It is more about demanding that Google make adjustments.

At present, the most likely implementation is to require Google to terminate exclusive agreements and sell advertising trading platforms and other businesses.

Take the cooperation between Apple and Google as an example. Apple's setting of Google as the default search engine of the Safari browser can generate an annual revenue of 20 billion US dollars from Google, while regulatory agencies are urging Apple and Google to terminate their cooperation.

In this regard, Apple is even more anxious. Even if the cooperation is terminated, Apple may still need to prioritize Google Search for user experience, but it will lose a huge amount of revenue. Previously, Apple's attempt to get involved in Google's antitrust investigation was rejected by the court.

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In 2015, Google's market share in the global search engine market exceeded 90% for the first time, and this figure was achieved on the basis of almost giving up the Chinese mainland market. This is an unimaginable miracle for any industry.

What can shake Google's dominance in the search market is neither the European Union nor the federal judges of the United States. It can only be new technologies and new models.

"ChatGPT is becoming synonymous with artificial intelligence, just as Google has become synonymous with search." "

After ChatGPT emerged in 2022, the business model of search engines has faced unprecedented challenges, and AI robot dialogue software is all attempting to replace Google's position.

It is widely believed that once the cooperation between Apple and Google is terminated, companies including Microsoft and OpenAI will take the opportunity to increase their investment in promoting Apple devices. This might also be the outcome that the US antitrust authorities want to see.

In December 2024, OpenAI announced that it would open the ChatGPT Search function to all users, directly competing with Google. It also particularly emphasized that the company had no intention of adding advertisements in the conversations. According to third-party statistics, in the fourth quarter of 2024, Google's share of the search engine market dropped below 90% for the first time in a decade.

If one has stood on the mountain top for a long time, the focus will no longer be on the achievements made.

Compared with the progress made by Google, the outside world is more eager to see the decline of this Silicon Valley king. In 2023, Google's hastily launched search chatbot Bard made a bunch of elementary mistakes, drawing ridicule from all sides.

Although Pichai attributed the slow progress to Google's greater caution and responsibility in AI ethics and security, emphasizing that the development of AI is still in its early stages, he even went so far as to defend that "Google did not exist when the Internet first emerged", refusing to admit that OpenAI seized the best opportunity in the industry.

However, within the company, Google has made sweeping adjustments, merging the two leading teams in the AI field, Google Brain and DeepMind, to attract back outflowing talents and continuously increase its resource investment in the AI field.

In February 2024, Pichai finally breathed a sigh of relief when Google's Gemini 1.5 version surpassed OpenAI in multiple benchmark tests.

Previously, Google set a key goal for 2025: to expand Gemini in the consumer sector. Google executives believe that compared with the $200 monthly subscription for the advanced version of ChatGPT, the $20 monthly pricing for the advanced version of Gemini is highly cost-effective, and the number of application users can exceed 500 million.

Historically, it's not always necessary to be the first, but you must have outstanding execution ability and be a leader among similar products.

In early April, Google released Deep Research driven by Gemini 2.5 Pro, directly Posting the evaluation comparison chart with OpenAI Deep Research, emphasizing that all performances were far ahead, once again demonstrating that it is the leader in the field of search engines.

To increase the installation volume, Google repeated its old trick again, paying mobile phone manufacturers to pre-install its Gemini application. According to the documents disclosed during the court trial, Google has reached an agreement with Samsung to pay it "a large sum" of money every month to pre-install Gemini AI applications on devices such as smartphones. The agreement can be extended until 2028 at the latest.

Of course, there is no doubt that a price war is the most effective way to attract users.

On April 16th local time, OpenAI released the o series of multimodal inference large models o3 and o4-mini. The o4-mini, which takes a cost-performance route, is priced at $1.1 per million tokens for input and $4.4 per million tokens for output.

One day later, Google promptly launched the Gemini 2.5 Flash version, lowering the pricing of the same functions to $0.15 and $3.5. OpenAI responded immediately on the same day by launching a "flexible billing" package for the o4-mini, which reduced the price by half in a disguised way by lowering the computing speed.

OpenAI's intention to go head-to-head with Google and try to bring down this "old king" is all too obvious.

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But the aggressive OpenAI is not without its troubles either.

As the partnership between OpenAI and Microsoft becomes increasingly fragmented, the outside world believes that OpenAI, which still needs to rent cloud services, will find it difficult to keep up with Google, which has its own cloud. If Google only engages in price wars, it will win faster. But when it comes to competing in technology, most fundamental advancements in the AI field can be traced back to Google Research.

To some extent, Google's biggest problem at present is that although it has a good technological accumulation and stable business performance, the capital market's confidence in it seems insufficient, and confidence is more important than gold.

At the beginning of the year, Google announced that its capital expenditure this year would be as high as 75 billion US dollars. The AI competition has completely turned into a money-burning war, and the capital market is increasingly concerned about the sustainability of the return on investment.

Although most Wall Street investment institutions are generally optimistic about Google's prospects and maintain a "buy" rating, Google's dynamic price-earnings ratio is less than 17 times. It is not only the cheapest among the "Seven Sisters", but also falls short of the average level of the S&P 500.

The greatest risk for Google is that its profits rely too much on the advertising business. In the past five years, the advertising business has accounted for more than 70% of the company's revenue, and search advertising is the core of the core.

In the tariff storm initiated by Trump, compared with Apple and NVIDIA, which rely more on physical supply chains, Google, which is more dependent on online services, may have suffered the least direct impact. However, precisely because there is no need to worry about affecting the supply chain, the new investigation into Google is more likely to become a "target" for other countries to take a stand and offer countermeasures. Recently, the European Union has stated that it will conduct non-compliance investigations into US tech giants such as Google.

These ongoing and potential investigations have all had an impact on Google's valuation.

In fact, even before ChatGPT emerged, Google's valuation had already been severely impacted. With the popularity of social platforms such as Tik and Tok, more and more people are accustomed to conducting searches directly on the platforms rather than opening search engines separately. Coupled with the lack of improvement in the overall economic environment, all industries are reducing their investment in advertising, and the digital marketing market remains sluggish.

As advertising push affects user experience, more and more users are trying every possible way to block related functions.

In March, Chrome forcibly removed uBlock Origin, an open-source browser ad-blocking plugin with over 40 million users. This incident caused quite a stir in the "geek circle" abroad. Previously, Google had stated that it would not deliberately suppress ad-blocking tools but imposed restrictions on some functions of plugins for security reasons. The shift from underhanded tactics to overt bans also reveals Google's anxiety.

With its original business being besieged by regulators and emerging competitors eroding its share of the online advertising market, the significance of winning the AI market for Google is self-evident.

Google is by far the largest source of traffic on the Internet, and search engine products have clearly reached a critical juncture of transformation. Google must use the right amount of AI to ensure that it remains the largest traffic port.

There is a widespread consensus in the industry that the AI market will not be dominated by any single model. Therefore, all companies are stepping up their efforts to gain greater say.

At present, agents that can perceive the environment, make decisions and take actions have become the core direction of competition in the field of large models, and a new ecosystem is also taking shape. In April, Google launched a new interoperability protocol called Agent2Agent, aiming to enable secure and standardized collaboration among AI agents across different platforms and ecosystems, and to enhance interoperability among agents. Industry insiders believe that this is an important signal that Google wants AI to move from an isolated system to an open and collaborative ecosystem.

However, this agreement has not received joint support from OpenAI.

This Tuesday, Nick Turley, the head of ChatGPT products at OpenAI, will testify in court. At a difficult time for Google, OpenAI surely won't miss the opportunity to "beat up the fallen dog".