By Marty Swant • November 27, 2024 •
Ivy Liu
For the remedies phase in the Google search antitrust trial, the giant has subpoenaed three of its biggest AI rivals — OpenAI, Perplexity AI, and Microsoft.
The subpoenas, sent in October, were made public on Monday through legal filings from all four companies. The disclosures came just hours after the Google ad-tech antitrust trial wrapped up closing arguments from lawyers representing Google and the U.S. Department of Justice.
When asked for comment, Google and Microsoft did not immediately respond to Digiday and spokespersons for OpenAI and Perplexity declined to comment. (All three companies are also facing a range of other lawsuits related to issues like AI copyright infringement.)
The new legal filings also shed light on what Google hopes to uncover by gathering fodder from rivals: To convince the court that its search monopoly facing more competition with the emergence of AI-powered search. Many of the materials Google is asking for relate to rivals’ efforts around search and advertising.
Here’s a brief rundown with some examples of what Google’s subpoenas ask each company to provide:
- OpenAI: Usage data for ChatGPT, distribution agreements with third parties, agreements with Microsoft related to Bing Search API, any agreements with Perplexity, and types of data used to train AI models. Google is also asking for content licensing agreements and board minutes related to OpenAI’s plans for search distribution and any advertising strategies.
- Perplexity: Download totals, active user data, financial performance, content licensing agreements, info about AI model training data and info about Perplexity’s monetization strategy including advertiser pitch decks and plans to integrate ads around user queries. Google is also asking for any communication between Perplexity and plaintiffs in the case — the DOJ and Colorado’s attorney general — and documents about Perplexity’s view of the competitive search landscape. Google also asked for agreements and communication related to distribution deals including marketing, pre-installations, syndication, negotiation contracts.
- Microsoft: Agreements between Microsoft and other companies like OpenAI and Perplexity, documents for the data types and quantities used to help train OpenAI’s models, and documents related to using generative AI tools to power search results and advertising services. Google also asked for info about content licensing agreements — including “exclusive content deals” — and materials about ways Microsoft provides search results to third-party AI tools and search tools like ChatGPT and ChatGPT Search. “If new artificial intelligence tools and technologies have provided Bing a novel mode of distribution — and all indications are that they have — Google is entitled to present that evidence,” Google wrote.
The subpoenaed companies differ in their legal responses to the requests. After initially claiming Perplexity never received a subpoena, that company’s lawyers said they now plan to send objections by next month and begin producing documents by early January. OpenAI has agreed to some of the requests — including agreements for Bing Search API, ChatGPT usage and board minutes. However, lawyers objected to other requests like financial performance and training data as being being “extremely burdensome” because of “core trade secrets and confidential information.” Lawyers for Microsoft said the company will provide documents for all but four of the 41 requests, with objections related to confidential agreements with OpenAI, Perplexity, Inflection and the UAE-based AI company G42.
“Microsoft has agreed to conduct a reasonable search for and produce documents with respect to five out of the six requests identified in Google’s Statement,” Microsoft lawyers wrote. “Where Microsoft has indicated it will not produce documents, it has done so based on good-faith objections to relevance, burden, and lack of proportionality. As much as Google wants to cast Microsoft as a party to this Action, it is not one.”
Even if Google is forced to sell Chrome, it could take months or years of legal fighting before it happens. The drawn out process could give Google time to build a new user for its latest standalone app for Gemini, which directly competes with the likes of ChatGPT and Perplexity. However, some ad-tech execs think the startups should get a chance to compete in the AI era of search.
“If [Google] is able to hang on to this distribution chokehold they have over search, that will give them time to continue to improve Gemini and hopefully — at least from [Google’s] perspective — put other competitors out of business,” said Adam Epstein, co-CEO and president of adMarketplace, a search advertising company.
It could take years for startups like Perplexity and OpenAI to gain market share, said Evelyn Mitchell-Wolf, a senior analyst with eMarketer. She also noted it’ll take a while for platforms like Perplexity to scale its advertising business. For now, she thinks it’ll be too difficult to dethrone Google while traditional search is ubiquitous and too easy. However, she thinks Google would have a “nightmare scenario” if it’s forced to sell Chrome.
“If we’re talking about market dynamics and search ads, I don’t expect Perplexity to gain meaningful scale anytime soon since it’ll take time for advertisers to see results,” Mitchell-Wolf said. “Having more options to search is good for consumers, but we’re still in a period when the underlying effects of AI on consumer behavior remains to be seen because we’re still in the big push from these major AI players.”
The DOJ’s proposal for Google to sell Chrome came just a week before closing arguments in the ad-tech antitrust trial, which took place on Monday in federal court ahead of a ruling in the coming months.
While Google’s search trial and ad-tech trial are separate, their potential outcomes remain the subject of conjecture as opposed to clear-cut visions. However, experts have said Google’s dominant search engine has provided a flywheel for much of the data used for ad-targeting while its huge user base gives advertisers a way to reach a high number of potential customers.
Some think the industry is paying closer attention to the search remedies trial scheduled for March. Among the experts following both trials is Ari Paparo, a longtime adtech exec and co-founder of Marketetecture Media, who said the DOJ’s proposal for Chrome went “way past the red line on things and [Google] won’t want that to happen.”
“I’ve asked multiple lawyers, and no one understands what the remedy phase of this [ad-tech] trial is going to be like,” Paparo said. “Is it going to be a separate hearing? Is it going to be a request for documents? Or are they just going to haul off and write a remedy? Nobody knows what the remedy is going to be.”
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