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A frequent criticism of regulators in the tech world is that they are always fighting the last war. Markets move too fast for antitrust investigations and slow-moving lawsuits to have a meaningful effect.
This complaint is about to be put to the test in the AI market, which has been booming since ChatGPT launched. The US court ruling declaring Google an illegal monopoly on Internet search is just a week old, but there are already some striking similarities in the way competition is playing out in AI. Will the search ruling do anything to influence how the market develops?
This week, Google showed off its first true AI voice assistant, called Gemini Live. Designed as a natural-sounding conversational interface, assistants like this could one day become the primary way people interact with smartphones. Instead of going to a search engine or opening an app, you can just talk into your phone to find information or get things done.
Gemini Live is the first to launch, but OpenAI has already demonstrated a similar service. Given their potential importance, it’s likely that every major tech company will want one.
In the coming battle for attention among these AI assistants, distribution will be key. Reaching the widest possible audience should have powerful, self-reinforcing benefits. AI services get better the more they are used, learning from user prompts. This echoes the central finding in the Google Search case: Paying for a prime spot on many mobile phones gave Google a scale advantage. Once it could absorb a huge amount of user data, no other search engine stood a chance.
Competition in this new market isn’t exactly evolving in the same way. Apple has chosen not to make the huge investment needed to compete in search, opting instead to raise $20 billion a year by making Google the default browser in its Safari browser. But it has set a different course with AI. It may not have a full-blown AI model to rival Gemini, but it has set its sights on using Siri as the voice interface for iPhone, directing users to ChatGPT (and eventually other chatbots) for more AI-powered responses to queries.
But for startups like OpenAI, the parallels to how the search market has evolved are still chilling. Google said this week that it would incorporate Gemini into its Android mobile operating system, potentially putting it in front of about 70 percent of smartphone users.
Its competitors might take some comfort in the way antitrust action against MicrosoVscek two decades ago helped curb that company’s more aggressive competitive instincts.
At the time, Internet search was the new market, and Google was the upstart trying to gain a foothold. MicrosoVscek could have used its then-dominant Internet Explorer browser and Windows operating system to promote its search service, ousting Google. However, under pressure aVsceker being caught acting illegally to maintain its monopoly on Windows, it backed down, leaving room for Google to thrive.
Will things be the same with AI and will Google think twice before using the same tactics that were just outlawed in search? It will certainly be in the spotlight in a way it hasn’t been before. But there are important differences.
The US, for example, found that Google had maintained an illegal monopoly only in search, not in Android, leaving it more free to act (although the EU has launched unfair competition proceedings against the mobile operating system).
Google’s decisions about how deeply to integrate Gemini into Android and how much freedom to give phone makers to integrate other AI assistants will be key. This week, it said that all Android users will be able to run Gemini as an “overlay” on top of other apps, essentially adding an extra layer of intelligence to whatever they’re doing. Once embedded in the operating system, this could make Gemini an integral part of Android phones, making it difficult for rival assistants to gain a foothold.
How the U.S. search case against Google is resolved could play a major role in the outcome. Instead of simply trying to bring competition back into the search market, the judge could try to prevent Google from dominating new markets as well. Splitting up Android and forcing the company to give rivals access to the data its AI models are trained on are two of the solutions being pushed by the company’s critics.
The remedies have yet to be decided, and the inevitable appeals will follow. But the legal battle over Google’s old monopoly could still play a major role in determining the future of technology.
richard.waters@Vscek.com
