Context: In October 2020, the U.S. Department of Justice (DOJ) filed an antitrust complaint against Google, alleging that the company is a “monopoly gatekeeper for the internet [that] has used anticompetitive tactics to maintain and extend its monopolies in the markets for general search services, search advertising, and general search text advertising—the cornerstones of its empire” (October 10, 2020 complaint). After almost four years of litigation, last August, Judge Amit P. Mehta of the United States District Court for the District of Columbia issued an opinion in favour of the DOJ, ruling that the company had violated U.S. antitrust rules by “maintaining its monopoly in two product markets in the U.S. – general search services and general text advertising – through its exclusive distribution agreements” (August 5, 2024 redacted opinion). While Google lost the case on the merits, the court has yet to determine the remedies that must be imposed. In a proposed final judgment published last November, the DOJ demanded, among several other remedies, that Google be banned from investing in AI firms – and if it currently already invests in any, it must divest those firms within six months of the final judgment being upheld by the court (November 20, 2024 plaintiffs’ initial proposed final judgment).
What’s new: Anthropic has filed an amicus brief (not yet public), seeking to participate in the remedy phase of the trial (February 14, 2025 motion for leave to participate (PDF)). It has stated that it was “blindsided” by the proposed ban on Google from investing in AI developers and that it could significantly hurt it: “A forced, expedited sale of Google’s stake in Anthropic could depress Anthropic’s market value and hinder Anthropic’s ability to raise the capital needed to fund its operations in the future, seriously impacting Anthropic’s ability to develop new products and remain competitive in the tight race at the AI frontier.”
Direct impact and wider ramifications: It is too early to say whether this participation will affect the DOJ’s proposed remedies. The proposed ban is likely to affect many AI firms that Google has (or was planning to) invested in, despite Anthropic’s arguments that it is uniquely positioned. So it will be interesting to see what happens once the court does allow the AI firm’s request (which is likely), as this would potentially attract many other players in the market currently being supported by Google.
The amicus brief was filed on Friday on behalf of Anthropic by King & Spalding LLP’s Paul Alessio Mezzina, Veronica Moyé, Benjamin T. Lee, Nema
Milaninia, and Sumon Dantiki.
The main remedy that Anthropic is concerned with can be found on page 8 of the plaintiffs’ initial proposed final judgment in November:
“Prohibited Investments: Within thirty (30) days of entry of this Final Judgment, Google must notify Plaintiffs of any investment, holding, or interest in any Competitor, any company that controls a Search Access Point or an AI Product, or in any technologies, such as AI Products, that are potential entrants into the GSE or Search Text Ads markets or reasonably anticipated competitive threats to GSEs. Within six (6) months, Google must divest any such interest and immediately refrain from taking any action that could discourage or disincentivize that company from developing products or services that compete with, disrupt, or disintermediate Google’s GSE or Search Text Ads.”
If imposed (and later upheld following any appeals) this remedy would force Google to sell any stakes it currently holds in AI startups, including the $3 billion one in Anthropic, as well as ban it from making any further investments in the future.
Amazon and Google are two of Anthropic’s biggest investors, with both having invested billions of dollars in the company since 2022. Google has invested in Anthropic both by purchasing equity directly and by purchasing convertible notes—debt instruments that can be converted to equity. Anthropic noted in its request that “Google’s investments give it no role in Anthropic’s governance and no control over its operations” and that the AI firm spends most of the money raised from Google’s investments to purchase compute, which is the “lifeblood of AI models”.
Anthropic emphasized that the primary concern is that it will hurt its value, as the company must be able to raise substantial funds to pay for compute and continue to develop its products. “Losing even a week or two can create a serious disadvantage, losing billions of dollars, all at once, is that much more serious, especially as the capital markets react to the increasingly fierce competition between U.S. and Chinese AI labs (such as DeepSeek),” it wrote.
However, the company noted, this proposed ban could also harm competition (rather than benefit it, as the DOJ has said) in three markets: the AI models market, where players like OpenAI/Microsoft, xAI, Meta AI, and, ironically, Google’s DeepMind and its Gemini models exist; the AI chip market, which is dominated by NVIDIA’s GPU chips; and the cloud computing services market, where Microsoft and OpenAI would only see their position improved.
The company reminded the court that Anthropic is one of the only players in the market that is not owned or dominated by a single technology giant. It added:
“Forcing Google to sell its entire existing stake in Anthropic within a short period of time would flood the market, sating investors who would otherwise fund Anthropic in the future.”
Anthropic’s partnership with Google was also the subject of a Phase 1 (insignificant) merger review by the UK’s Competition and Markets Authority last year (October 24, 2024 ai fray article), which concluded in November that the partnership did not qualify for investigation. Earlier in the year, the U.S. Federal Trade Commission also launched an inquiry into several Generative AI investments, among which Google and Anthropic’s partnership was also present (January 5, 2024 FTC press release).
Throughout DOJ v. Google, Google has been represented by a large array of attorneys across different states. Lead attorney to Google is co-chair of Williams & Connolly‘s antitrust practice group John E. Schmidtlein. He is joined by fellow Williams & Connolly attorneys Aaron Philip Maurer, Benjamin M. Greenblum, Christopher Yeager, Colette Connor, Edward John Bennett, Gloria K. Maier, Graham Safty, Kenneth Charles Smurzynski, Natalie Peelish, Paul B. Gaffney, and Thomas W. Ryan. Google has also been co-represented by Wilson Sonsini Goodrich & Rosati’s Chul Pak, Franklin M. Rubinstein, Michael Sommer, and Rachael Racine, Ropes & Gray LLP’s Anne Johnson Palmer and Freshfields Bruckhaus Deringer US LLP’s Justina Sessions.
All other counsel, including for the DOJ, individual states and any other intervening parties can be found here.