Sundar Pichai, chief executive officer of Google, told a US federal judge today the government’s proposal to hive off its Chrome browser as a remedy in a monopolization suit is “so far-reaching” that it is a “de facto divestiture” of the tech giant’s search engine. The tech honcho also decried behavioral remedies proposed by the US Department of Justice and a Colorado-led multistate coalition, saying that forcing Google to share data and mandating ads syndication would leave no value for the company’s intellectual property.
Sundar Pichai, chief executive officer of Google, told a US federal judge today the government’s proposal to hive off its Chrome browser as a remedy in a monopolization suit is “so far-reaching” that it is a “de facto divestiture” of the tech giant’s search engine.The tech honcho also decried behavioral remedies proposed by the US Department of Justice and a Colorado-led multistate coalition, saying that forcing Google to share data and mandating ads syndication would leave no value for the company’s intellectual property.
“I reviewed the proposal on data sharing carefully. I think it's so far reaching, so extraordinary,” Pichai said during his direct examination.
“Effectively, it seems to be a full end-to-end, the combination of everything is the full end-to-end. All the years of R&D and innovation we put into the product, it feels like a de facto divestiture of the entire IP-related search,” he said.
The Google CEO was being quizzed by the company’s attorney John Schmidtlein for his high-level opinion on the impact to Google's business if the company is made to comply with various requirements in relation to search infrastructure, search index, the knowledge graph and making these products available to competitors at a marginal cost.
Pichai also said that just the provisions on specific aspects of data sharing proposed by the government were “extraordinary.”
“It's not clear to me how we would have any value for our IP to share our entire IP at marginal cost,” he said. “But a combination of all the remedies makes it unviable... for us to continue to innovate and build very good search.”
Pichai said he has “a lot of concerns on privacy” if Google is made to share the granular details of user search-related queries with rivals. “You know people come and trust search. We've earned their trust.”
People search in some of their most vulnerable moments, he said, and if there are no privacy protections over sharing user data it would allow anyone to completely reverse-engineer end-to-end every aspect of Google’s technology stack. The tech company has spent 25 years and invested money and time of thousands of engineers and computer scientists to innovate.
“So, it's not clear to me how running a company with fiduciary responsibility to generate a return on investment, how to fund all the innovation we do if we were to give all of it away at marginal cost,” he said.
During redirect, the Google attorney asked, “If Google search engine declines and becomes non-competitive, would you expect partners to still preload Google just because Google's offering rev share?”
“We would lose the vast majority of our distribution deals,” Pichai replied.
— Chrome —
Schmidtlein asked Pichai if he has a rough sense of the order of magnitude of investment that Google has made in Chrome over the years.
“Just last year alone would be north of a billion dollars. Over the past decade, I would say tens of billions of dollars,” he responded.
Not only has Google built the browser but it has also openly sourced the underlying technology, called Chromium, which is made available for others to build on, Pichai said.
Many of Google’s competitors use Chromium, including the Microsoft Edge browser. There are startups that have built browsers based on Chromium.
“Just to make it very clear, we want the entire web to work well, but the commitment we have today, in Chromium, we account for over 90 percent of all the potential code committed to the project,” Pichai said. “In the last year alone, it was around 94 percent.”
Pichai said he personally built the anchor planes of Chrome security along with the team before Chrome browsers were applications. "We built from the ground up a multi-process security architecture, which was the first of its kind for browsers," he said.
Over the years Google has invested in so much R&D that the company regularly challenges and pays rewards for hackers who can break into Chrome.
"Chrome is one of the most widely used browsers in the world. It's also one of the most targeted browsers," he said.
— Gemini AI app, revenue sharing agreements —
During cross-examination by DOJ counsel Veronica Onyema, Pichai confirmed he had several calls with Apple CEO Tim Cook in 2024 during which the Google executive made the case for why the Gemini app would provide a very good user experience for Apple users.
“We spoke a lot, and he was trying to understand our plans for how we are evolving AI technologies, our AI roadmap. As part of that, we talked about Gemini app distribution,” the Google CEO said.
Apple ultimately signed a distribution deal with ChatGPT, but Cook told Pichai that Apple plans to expand to other providers for generative AI distribution in 2025.
The Google CEO revealed he is hoping to execute a Gemini distribution agreement with Apple by the middle of this year.
US District Judge Amit Mehta stepped in to ask if Gemini will be pre-installed as an app or be available on various search access points such as the browser and widget.
Apple has a feature called Apple intelligence to improve users’ phone experience, and the agreement would potentially distribute Gemini as a provider that powers Apple intelligence, Pichai replied. There are certain use cases where a query is sent to ChatGPT on Apple devices, he said.
Schmidtlein asked about the state of competition amongst AI chat products.
Pichai said it is one of the most dynamic models in the industry, and there are many big and small companies which are both building models and using models to build chatbots or generative AI applications. “I think just in the last six months there have been many entrants. There are many chatbots from China, more than I can keep track of now.”
Schmidtlein asked about Google’s latest version on revenue sharing agreements to partners like browsers and wireless carriers consistent with the company’s proposed revenue from having Google Search and other products that are pre-installed on various search access points.
“Am I correct that the way these latest revenue share payments would work is if the partner selected Google and wanted Google to be pre-installed on their device, they could earn revenue share payments in return, but Google can't make them preload on their devices?”
Pichai said Google’s partners are shipping devices and they decide what they want to preload or install. “They design those experiences,” he said. “If they offer promotion and distribution for our services, then they enter into agreements on a non-exclusive basis.”
Earlier, Onyema had asked Pichai about Google already updating its search distribution agreements to align with its proposed remedies.
Last week, Peter Fitzgerald, vice president of global partnerships for platforms and devices at Google, testified about the tech giant’s plan to move to a new revenue-sharing agreement related to the distribution of the Android operating system. The new agreement is called ACIA or “Android Commercial Incentive Agreement,” in which generative AI is an important part of the deals with partners (see here).
Google’s previous agreement was called the “Mobile Application Distribution Agreements," or MADA, which has lapsed in the US.
Pichai agreed that Google receives something, otherwise it would not make payments to browsers, smartphone makers and wireless carriers to have Google Search as the default service.
— Data sharing risks, Europe's DMA —
Onyema questioned Pichai on his testimony that the government’s data sharing remedies caused him concern and that having to implement them would hurt Google’s research and development efforts.
The DOJ counsel asked about a provision in the EU’s Digital Markets Act that requires Google to share click and query data with third parties.
“Yes, it’s very different from how it is in the plaintiffs’ proposal,” he said.
Then Onyema asked if Google announced in March 2024 that it would comply with this provision of the DMA. Pichai said yes.
“Now, in response to the data sharing provision of the DMA, Google has not reduced its innovations in search, correct?” Onyema, asked.
The tech CEO said that in Europe today, many Google features are launched a year later than in the US.
“We need certainty as to how it would work, and so there's definitely a slowdown in terms of when we are able to launch features in Europe today,” he said.
The DOJ lawyer persisted, asking if R&D is done globally. Pichai replied Google won't change R&D based on Europe alone.
The DOJ counsel put up an exhibit showing Google’s financial results from 2024. Google’s revenues for Google search and other products increased from more than $175 billion in 2023 to more than $198 billion in 2024, while its research and development expenditure increased from $45 billion in 2023 to more than $49 billion the following year.
Onyema had to repeatedly ask whether Google has not experienced any data breaches in its process of implementing the DMA’s data sharing requirements, especially as he raised concerns in his testimony about the government’s proposed remedies as a whole. Pichai confirmed there were no breaches.
Judge Mehta stepped in and asked Pichai about his understanding of what the differences are between the data-sharing requirements under the DMA and those that are being requested by the DOJ and states.
There are substantial differences in general but overall, it's “much narrower” in scope, the Google CEO replied. For instance, the DMA has provisions to ensure that no user’s privacy is compromised. Some of the related provisions are still under discussion, Pichai said, noting he is not fully aware of the confidentiality of the nature of those discussions.
“But overall, I would say the scope of what I've seen and understood on the DMA is much, much narrower... compared to the plaintiffs’ proposal, which is so broad [that] it's basically, in its entirety, asking us to give every aspect of our search ranking, search quality, signals, everything if you put together. It’s our entire IP.”
Onyema refreshed Pichai's memory about a 2011 case in which the US the Federal Trade Commission alleged that Google violated its own privacy promises to consumers with its social network Google Buzz.
Following the administrative proceeding, Google and the FTC ultimately entered into a consent order which was signed by Kent Walker, president of global affairs for Alphabet. The 20-year consent order expires in 2031, according to the exhibit. The DOJ counsel displayed an exhibit showing that as part of the consent order, Google agreed to implement a comprehensive privacy program to protect user data.
The DOJ attorney reminded Pichai that Google was fined $22.5 million in 2012 for violating the Buzz consent order.
— National security threat —
During cross-examination, Pichai agreed with Onyema that it is up to the DOJ and states to assess whether any qualified competitor who receives data from Google does not pose a national security risk to the US and that the government will evaluate any potential risk to national security stemming from the divestiture of Chrome.
Google attorneys have argued that the proposed forced sale of Chrome as well as the behavioral remedies raise national security concerns (see here).
Pichai conceded under DOJ questioning that should the court order a Chrome divestiture, the tech CEO doesn't know who that buyer would be. He also agreed that he wouldn't be able to speak to the internal security protocols that a potential divestiture buyer may have in place.
“As CEO of Google, you owe fiduciary duty to Google shareholders, correct?” Onyema asked.
“That's correct,” Pichai replied.
“You do not speak for the United States government on issues of national security, correct?”
“Yes,” Pichai replied.
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