Google’s Search Engine Deals Face Annual Review Following Antitrust Ruling

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A landmark U.S. antitrust ruling has fundamentally altered the landscape for Google's core search business, mandating that its lucrative default search engine agreements be renegotiated every year. The final order issued by District Judge Amit Mehta on Friday imposes significant new constraints on the tech giant's operational model.

Despite the mounting legal challenges, Alphabet Inc., Google's parent company, continues to demonstrate robust financial health. The company's operational performance remains strong, as evidenced by its latest quarterly results. For Q3 2025, Alphabet's revenue surpassed the $100 billion threshold for the first time, representing a 16% year-over-year increase.

The Google Cloud segment reported substantial growth, with revenue climbing 34% to $15.2 billion. Earnings per share saw an even more dramatic rise, jumping 35% to $2.87. Concurrently, management has signaled continued heavy investment in artificial intelligence infrastructure, raising its capital expenditure forecast for 2025 to a range of $91 to $93 billion.

Core Business Model Receives Major Blow

The court's decision strikes at the heart of Google's market dominance. All contracts concerning default search engines and AI applications are now limited to a maximum duration of one year. This dismantles the company's longstanding strategy of using multi-year agreements to secure prime positioning on billions of devices globally.

This shift most critically impacts the multi-billion dollar partnership with Apple. Google pays substantial annual sums to remain the default search engine on iPhones, Macs, and iPads—a arrangement that must now be revisited annually. Similar annual negotiations will be required for contracts with Samsung and other device manufacturers.

In a forward-looking move, Judge Mehta explicitly extended this ruling to cover generative AI applications, indicating regulators' intent to oversee this rapidly evolving sector.

Rivals Prepare to Capitalize on New Opportunities

For competitors in the AI space, the timing of this ruling appears fortuitous. The market, previously locked down by years-long contracts, is now subject to annual review, creating unprecedented opportunities for agile rivals.

Several companies are positioning themselves to challenge Google's search hegemony. OpenAI recently launched Atlas, a browser built on ChatGPT technology. Perplexity AI is developing an alternative named Comet. Microsoft is deepening the integration of its Copilot AI into the Edge browser, while Opera is betting on its AI assistant, Aria.

Alphabet Presses Forward with AI Ambitions

Alphabet's strategic focus on artificial intelligence remains undiminished. On November 18, 2025, CEO Sundar Pichai unveiled Gemini 3, which the company describes as the most intelligent model it has ever developed. In a significant departure, Google integrated this new AI model into its search engine from the first day of its release.

Market analysts maintain a positive outlook. Pivotal Research Group raised its price target for Alphabet shares to $400, citing strong momentum from the Gemini platform and the Tensor Processing Unit (TPU) business. A semiconductor analyst for Asia at Morgan Stanley anticipates that Google will purchase approximately 5 million TPUs by 2027—a figure 67% higher than previous expectations.

Legal Battles Set to Continue on Multiple Fronts

Google has announced its intention to appeal the monopoly ruling, a process expected to span several years. This case proceeds alongside a separate antitrust lawsuit focusing on the company's advertising technology, in which the U.S. Department of Justice secured a partial victory in April 2025.

The ruling did provide some relief for Alphabet. Judge Mehta rejected regulators' most severe demands in September, which included a forced divestiture of the Chrome browser. Instead, the company is required to share certain search data with competitors, though not the underlying algorithms themselves.

Looking ahead, Alphabet will pay a quarterly dividend of $0.21 per share on December 15 to shareholders of record as of December 8. The company's financial results for the fourth quarter of 2025 are scheduled for release in late January 2026.