Part 2 of the 2025 U.S. Tech Leadership and Regulation Series
The Department of Justice (DOJ) sought to leverage a narrow liability ruling in the antitrust case against Google Search to advance remedies that attempt to impose regulations rather than address the competitive harms that were alleged in the case. This includes a proposal that would force Google to make user data, the Google Search index, ranking technologies, and query understanding accessible to competitors. The DOJ proposal would require Google to not only share existing search and related AI technologies that it developed, but also do so with respect to future technologies that it would develop.
Collectively, the technology and data-sharing requirements allow rivals to free-ride on Google’s investments, rather than develop competing technologies that actually improve search and leverage AI. This also provides China and other rivals an opportunity to exploit American tech leadership, investments in AI, users’ data and AI training inputs. These are prized strategic assets: technology developed by U.S. companies and data from American users. This is not mere speculation — over five decades ago the DOJ and FTC mandated RCA and Xerox respectively to share proprietary technologies in an effort to enhance competition, at the cost of the subsequent demise of American leadership in related spaces. The Xerox example parallels the proposed remedy in the Google Search case particularly closely.
The Data Sharing Requirements Are Intended to Allow Competitors to Recreate Google’s Proprietary Technology
The proposed final remedies make it clear that the extent of data sharing is intended to allow competitors to recreate Google’s proprietary technology. For example, the proposed final remedies state that Google must make available at marginal cost its Search Index, as well as data used in (a) Google’s statistical models, (b) ranking technologies, (c) AI model training, and (d) digital ads auctions and technologies.
In other words, the proposed data sharing remedy amounts to much more than addressing the specific contracts that are at issue in the Google Search antitrust liability ruling. The remedy imposes draconian requirements to share core proprietary technologies that took years to develop. In order to comply, Google would have to provide all of the data needed by rivals to recreate Google’s technology. As the data sharing remedy is defined in terms of providing rivals everything needed to recreate many of Google’s models and products, a likely outcome is a proliferation of “copycats” of Google services rather than distinctive and innovative new offerings in the market.
Negative Implications for Investment in Innovation
Mandating that Google share with competitors all data and proprietary technology needed to recreate Google models would fundamentally alter investment incentives in the digital economy. Developing and maintaining search engines, AI models, and advertising models requires enormous investments in R&D, data center infrastructure, algorithm development, and talent. For example, Google announced plans to spend $75 billion in capital expenditures on mostly cloud and AI infrastructure in early 2025, up from $52.5 billion in 2024. Over many years, Google has poured hundreds of billions of dollars into indexing the web, developing search algorithms, training large AI models to interpret queries and generate rich answers, and building the hardware capacity to offer services powered by this research and development. Suppose that Google is required to provide all of its current and potential rivals with all required data inputs like Google’s search index or query results at nominal cost. In that case, it “makes it cheaper (if not free) for firms to copy market leaders’ moves,” as one analysis of data-sharing obligations notes.
In such a scenario, “imitation becomes more attractive than innovation.” Why would a competitor incur the high expense of web crawling, index-building, or AI training from scratch if regulation hands them Google’s outputs on a silver platter? Laggard firms will free-ride on Google’s investment in research and development rather than develop innovations of their own. Over time this dynamic could “deter [the leading firms] from innovating” as well, since the returns on new innovations would be immediately shared with (and appropriated by) competitors. In economic terms, forced data-sharing creates a classic free-rider problem where competitors benefit from Google’s investments without commensurate effort, sapping the overall incentive to invest in breakthrough improvements, both for Google and its rivals.
Such free-riding concerns are amplified when considering foreign competitors. If Google is compelled by U.S. courts to provide its core proprietary technology and data assets to nearly all competitors, foreign-based companies could gain access to American investments that they themselves never had to fund, and which they do not have to share in return. Foreign technology companies not only do not face reciprocal requirements to share data or technology, but also often do not compete on an even playing field. In China, for instance, Google and other American search providers are effectively blocked or heavily restricted from operating and, where allowed to operate, are required to share their technology with local firms. Chinese search engines like Baidu and others dominate their protected home market and have not had to open their own proprietary technology or data troves to outsiders. This one-sided arrangement would allow international rivals to leverage U.S. investment and data without incurring the massive costs Google did.
From an innovation policy perspective, this remedy would effectively prevent Google, a company that provides best-in-class products for free to ordinary users and successfully innovated its products over many years, from making viable investments in this space. It would also lead to under-investment in the next generation of search technology by other players as well. In sum, the proposed remedy risks chilling investment in search and AI, especially for U.S. companies, while enabling domestic and foreign competitors to free-ride on American ingenuity.
Impacts on Competition
While the DOJ’s stated intent of the tech and data-sharing remedy is to lower barriers to entry and spur competition, the unintended consequences of such remedy could cause harm to the competitive process itself. Rather than picking winners and losers, policymakers should promote antitrust standards that are imposed uniformly and encourage competition and prioritize consumer welfare.
For example, if all search providers are drawing from the same well of Google-provided data, we may see a homogenization of offerings rather than true rivalry over product quality. Competitors would have less incentive to differentiate or improve their own technology, relying instead on Google’s handouts. This kind of reliance on redistributed assets can lead to a stagnation of features and quality over time, and an overall reduction in innovation and competition.
As one study observed in the context of similar regulations, such measures often provide “no clear benefits to consumer welfare or innovation, especially if the firms that replace the incumbents provide inferior services.” In other words, the prospect of a weakened Google supplanted by copycat competitors who add little beyond what Google already provided, is not a recipe for vigorous competition. If all competitors are incentivized to reduce investment in innovation due to the reduced expected returns on such investment in the proposed remedy environment, consumers would ultimately be harmed, as digital services would likely stagnate relative to a baseline scenario in which proprietary technology and data sharing was not mandated.
In sum, Google is a leading competitor that delivers best-in-class products for free to ordinary users while continuously investing in R&D and improving its products and services. The proposed remedy would by design reduce Google’s market share and incentive to invest in R&D, while handing market share to rivals with little incentive to innovate in light of their ability to benefit from Google’s future R&D. The result is not likely to deliver meaningful competition on quality, or any measurable consumer welfare enhancements–after all, best-in-class services can’t be offered cheaper than free by new copycat competitors. However, the rate of improvement of those services can slow significantly from reduced investment relative to the baseline scenario without a remedy.
Data Security and Privacy Impacts
Forcing Google to share its data and its users’ data with a broad array of third parties raises serious privacy and national security concerns. The proposed final remedies attempt to handwave away such concerns, but it is difficult to require that Google turn over all inputs needed to copy numerous key Google models in many fields without revealing enormous amounts of valuable information to foreign rivals, as well as domestic rivals with potentially inferior data security.
For example, Google’s search queries and click data include highly sensitive information about individuals’ interests, health, location, and communication. Users have shared this information with Google with the expectation that the data will be used to provide personalized Google services, but not shared with the entire world. Allowing third parties with weaker security standards to access such data vastly increases the potential for misuse. Security experts warn that “if sensitive data ends up in the hands of an adversary or criminal group […] the consequences can be detrimental,” enabling hostile actors to identify U.S. military or intelligence personnel, target individuals for blackmail, or conduct more effective cyberattacks.
Internet search histories have been specifically flagged as a rich source of personal and even classified insights that foreign intelligence could exploit. The U.S. government itself has described unfettered foreign access to Americans’ data as “an unusual and extraordinary threat,” underscoring the national security stakes. Mandated data sharing could also undermine the security safeguards of leading U.S. technology companies. Google and other leading U.S. technology companies invest heavily in cybersecurity and data protection, as they have both the expertise and strong incentives to guard user data: failures result in regulatory penalties and reputational damage.
Forcing Google to distribute user data widely would “increase the attack surface” by expanding the control of such data to firms with varying security standards. Smaller competitors or newcomers may lack robust defenses, making them attractive targets for hackers or state-sponsored cyber intrusions. As one analysis noted, requiring Google to make its search data accessible to many parties “increases the probability that nefarious actors can successfully access sensitive data by targeting companies with less advanced data security.” By weakening centralized protections and creating new access points, such a remedy could inadvertently expose Americans’ data to breaches, espionage, or other abuses.
Historical and Comparative Context re: U.S. Leadership
History offers cautionary lessons about mandated sharing of proprietary technology producing unintended consequences for U.S. leadership in key strategic industries. Several past antitrust interventions in the U.S. and abroad illustrate how policies pursued with purportedly pro-competitive intent can sometimes undermine U.S. leadership and advantage foreign competitors.
For example, on several occasions U.S. antitrust enforcers required leading businesses in the U.S. electronics industry to license their proprietary technology to rivals including foreign firms. In 1958, a DOJ consent decree forced U.S. radio and television pioneer RCA to license its electronics technologies to Japanese competitors and to issue royalty-free licenses to domestic competitors. In 1975, an FTC consent decree required Xerox to share its copier innovations, including its internal “know-how,” with would-be rivals, including foreign firms. This included “blueprints, drawings, formulae, manuals, process descriptions, production methods, specifications, quality control and test standards and computer programs”—all of the information required to allow a competitor to replicate Xerox’s products. The Xerox example is particularly relevant for considering the potential consequences of the proposed remedy at issue in the Google Search case.
After these moves, Japanese firms “soon dominated the U.S. market” in the industries affected by those technology-sharing consent decrees. U.S. firms lost their early lead in those technologies as foreign companies capitalized on American innovations at minimal cost, fundamentally reshaping global competition in electronics to the detriment of U.S. industry.
These cases demonstrate that a compulsory technology sharing remedy can carry significant downsides, particularly when it is binding for some but not all market participants. In a globalized economy, there’s a particular risk that the benefits of such interventions accrue disproportionately to foreign competitors who are quick to utilize freely available U.S. innovations, sometimes while shielding their own markets from competition. These historical and comparative examples underscore the importance of anticipating long-term economic effects and geopolitical implications when crafting remedies in tech markets.
Conclusion
From an economic and policy perspective, the proprietary technology and data-sharing remedy proposed in the Google Search antitrust case raise several red flags. Mandating that the most popular U.S. search engine share its user data and all data required to recreate search technology with competitors, including potentially foreign firms, could backfire in multiple ways. It can (a) undermine user privacy, (b) jeopardize data security, (c) diminish incentives to invest in R&D and product improvements, (d) reduce competition in non-price dimensions, and (e) undermine U.S. leadership in key technologies.
The U.S. must weigh the broader ramifications: the erosion of its technology firms’ investment incentives, heightened risks to data security and privacy, and the possibility of ceding technological leadership to adversaries who gain from American research and development without reciprocating, especially China. We have unfortunately witnessed similar episodes in our past, where overzealous enforcement of antitrust law and requirements to share proprietary technology have benefited foreign rivals and undermined U.S. economic leadership. Ultimately, true competition is best sustained by encouraging firms to invest and compete on the merits, not by compelling one firm to subsidize all others. Policymakers should be cautious that in attempting to cure one purported market problem, they do not create bigger problems for user privacy, data security, innovation, competition on quality, and U.S. national competitiveness down the line.
