A remedy of “Pay for Half” that limits the share of devices for which Google can pay for default search status, as well as the share of revenue Google can pay its channel parters for that status, offers a middle ground that would help restore competition while preserving revenue for distribution partners, argue Alissa Cooper, Fiona Scott Morton, and Nick Jacobson.
As the appeals in the United States v. Google search antitrust case move forward, the central question is now whether the remedies ordered by Judge Amit Mehta address Google’s illegal monopoly in search—or whether, by allowing Google to continue paying billions of dollars for default search placement, the remedies leave intact the very conduct at the heart of the case.
In August 2024, Judge Mehta handed down his landmark verdict that held Google liable for illegally maintaining a monopoly in general search services in violation of Section 2 of the Sherman Act. One of the court’s major findings was that Google had made multi-billion-dollar payments to channel partners—Apple, Samsung, Mozilla, and others—to lock in Google Search as the default search engine on nearly all mobile devices and most desktops, circumventing the competitive process and denying consumers the benefits of competition. Yet, at the remedies stage in 2025, Judge Mehta permitted Google to continue paying for default placement, subject only to minimal restrictions, despite his own admission that the court was “leaving in place” the very forces that made the search ecosystem “exceptionally resistant to change.”
Earlier this year, the Department of Justice and 35 states appealed the remedy, arguing that it failed to limit Google’s ability to pay for placement, a core part of the liability finding (Google also appealed the liability finding itself). Judge Mehta also left open the possibility of revisiting the payments question “if competition is not substantially restored.” Yet, nearly a year into a six-year remedy, no entrants have wrested default status from Google, which continues to pay for privileged status across the board. Although Judge Mehta was optimistic about the potential of generative artificial intelligence to compete with Google, AI companies have yet to dent Google’s grip on search defaults.
Pay for Half: a better way
At trial, the court and litigants treated a payment ban as an all-or-nothing choice: either ban the payments entirely or allow them in full. But it doesn’t have to be an all-or-nothing choice. In a new working paper and amicus brief, we propose “Pay for Half”: a remedy that caps, rather than eliminates, Google’s ability to pay for default search placement. Under Pay for Half, Google may pay an original equipment manufacturer (OEM) for a privileged position on a maximum of 50% of devices in any given product line. If the OEM receives payments from Google for only half its users, the OEM will have an incentive to monetize the remainder of its users by contracting with a rival search service to pay for placement instead.
The key economic insight is that a monopolist can pay more than any rival to obtain distribution. Google violated the law to maintain its monopoly, and yet is now using the fruits of that monopoly to bid the price for default search placement sufficiently high enough to prevent any entrant from obtaining access to consumers. Unless the court prevents Google from using its illegally obtained profits in this way, search rivals—whether general search providers or AI-powered entrants—will be unable to gain meaningful default access to consumers.
Pay for Half is composed of three components: a market-share cap on devices eligible for payment from Google, a revenue-share cap on the size of such Google payments, and a random-assignment requirement to prevent Google from retaining the most valuable users (those with the highest predicted search revenue).
A market share cap would limit Google’s paid default placement to no more than half of the devices in any product line. Pay for Half recommends a 50% market share cap on the grounds that this allows for one similarly sized competitor. If the court wanted to allow room for additional rivals, it would need to set the cap lower.
A 50% market cap rule requires that Google pay channel partners for default placement on at most half of the devices in any product line. An immediate concern is that Google would offer to double the revenue share it pays today and implicitly condition the doubled payment on the channel partner pre-installing Google as the search default on the other half of its devices for free. To prevent such circumvention, we propose pairing the market share cap with a payment cap. We express the cap as a share of search revenue earned by the device. We propose a 40% payment cap to start because that is slightly above the highest share of revenue that Google currently pays to a partner: 36% to Apple. If this cap proves to be too generous to incentivize OEMs to seek new search partners, the cap should be revised downward until new search competitors enter the market.
Lastly,Pay for Half requires that Google’s paid default placements be assigned randomly across devices within a product line, preventing it from concentrating payments on the highest-value devices. Random assignment preserves a level playing field and gives all parties the same potential revenue.
Why Pay for Half can work
As Judge Mehta recognizes, “Google’s unlawful agreements allowed it to capitalize on two powerful forces within the general search services market: default bias and network effects” (p. 83 Remedies).Pay for Half solves both problems: it opens up at least half of the market for search entrants to bid to be the default providers and, consequentially, build their own network effects. It therefore fulfills key purposes of an antitrust remedy: to terminate both the anticompetitive conduct and the monopolist’s ability to profit from it.
At the same time, Pay for Half avoids total disruption for channel partners who have grown dependent on a (small) share of Google’s monopoly profits, and eases the transition from monopoly to competition. Pay for Halfis also straightforward to implement. Default status is already known to channel partners, and the uniform market share and payment caps are easy levers for the court to adjust should the original thresholds fall short of incentivizing channel partners to contract with other search engines.
Pay for Half expands competition without limiting choice. Users remain free to choose their preferred search engine at any time, including switching to Google if their device defaults to another search engine. OEMs are not required to sell default status to other search engines; they are free to retain Google’s default status on any device. The only restriction is that Google may pay for default placement on no more than the court-defined share of devices. OEMs are likewise free to innovate and partner with AI entrants.
As the market transitions to competition, so will the potential for novel features or even more generous payments from new providers. As the remedy opinion identifies, Google does face potential competitors in AI entrants as the market for search changes. Pay for Half gives these entrants an immediate point of entry into the market to compete with Google and serve consumers. The remedy opinion fails to allow space for entrants to challenge the reigning monopolist. But a step in the right direction is right in front of the court. Instead of monopolizing the market, Google can pay for half of it.
Authors’ Disclosures: Alissa Cooper works for the Knight-Georgetown Institute (KGI). KGI is funded by Georgetown University and philanthropic contributions. She is a member of the board of The Tor Project, Inc. and previously worked for Cisco Systems, Inc. Fiona Scott Morton is an economic expert in the United Kingdom for a group of advertisers seeking damages from Google, and in other competition cases both in the United States and United Kingdom. She regularly works as an expert witness for government plaintiffs on matters that are confidential. Nick Jacobson is a student at Yale Law School. You can read our disclosure policy here.
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
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