Google Wins on Chrome: Court Rejects Divestiture, But Search Monopoly Enters Era of Behavioral Remedies

TradingKey - On Tuesday, U.S. District Judge Amit Mehta issued his remedies ruling in the U.S. government’s antitrust case against Google, rejecting the Department of Justice’s central demand to divest the Chrome browser. The decision spares Google and its parent company Alphabet (GOOG.US) from its most severe potential penalty. Following the announcement, Alphabet’s shares surged 7% in after-hours trading, while Apple (AAPL.US) rose 3%.

Judge Mehta acknowledged that Google engaged in anti-competitive conduct in the search market, but ruled that forcing the sale of Chrome would cause “devastating” collateral damage to partners, the market, and consumers. However, the court imposed significant behavioral restrictions:

• Google is banned from entering into exclusive agreements with device makers like Apple.
• Any pre-installation deals must now have a maximum term of one year.
• Google may continue paying Apple to be the default search engine and have Chrome pre-installed — a deal estimated to bring Apple up to $20 billion annually.

“Amit Daryanani, analyst at Evercore, noted that the ruling not only protects a critical revenue stream for Apple but also strengthens its bargaining power in future negotiations. Dan Ives of Wedbush called it a moment when the “dark cloud” hanging over Apple has finally lifted.

Additionally, the ruling requires Google to allow “qualified competitors” access to its search results to build their own products. This opens the door for Apple to integrate alternative AI-powered search partners — such as Perplexity — or to deepen collaboration with Google’s Gemini in the AI era. Ives said the decision effectively “turned on the green light” for expanded Apple-Google cooperation in AI.

While Google has narrowly avoided a breakup, the challenges are far from over. Another antitrust case — over its dominance in advertising technology — has already concluded with a ruling that Google violated antitrust laws, and could lead to future business divestitures.

BMO analyst Brian Pitsur said Google is likely to appeal, but ultimately faces a period of “significant, though not catastrophic,” business model transformation. The era of unchecked platform dominance may be over — but for now, Google remains intact.