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Trump has vowed to continue crackdown on Big Tech

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Google holds stake in Anthropic worth billions of dollars

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Prosecutors: Google should tell government about AI

investments

(Adds comment in paragraphs 3-5, context in paragraphs 6, 14)

By Jody Godoy

March 7 (Reuters) - The U.S. Department of Justice on

Friday dropped a proposal to force Alphabet's Google

to sell its investments in artificial intelligence companies,

including OpenAI competitor Anthropic, to boost competition in

online search.

The DOJ and a coalition of 38 state attorneys general still

seek a court order requiring Google to sell its Chrome browser

and take other measures aimed at addressing what a judge said

was Google's illegal search monopoly, according to court papers

filed in Washington.

"The American dream is about higher values than just cheap

goods and 'free' online services. These values include freedom

of speech, freedom of association, freedom to innovate, and

freedom to compete in a market undistorted by the controlling

hand of a monopolist," prosecutors wrote.

A spokesperson for Google said the "sweeping proposals

continue to go miles beyond the Court's decision, and would harm

America's consumers, economy and national security."

A spokesperson for Anthropic did not immediately respond

to a request for comment.

President Donald Trump has said he would continue a

crackdown on Big Tech, which began during his first term and

continued into former President Joe Biden's administration.

Trump has tapped veteran antitrust attorney Gail Slater

Google holds a minority stake worth billions of dollars in

Anthropic. Losing the investment would hand a competitive

advantage to OpenAI and its partner Microsoft ( MSFT ),

Anthropic wrote to the court in February.

Evidence prosecutors obtained since making their draft

recommendation in November showed a risk that banning Google

from AI investments "could cause unintended consequences in the

evolving AI space," they said in the final proposal on Friday.

They asked that Google be required to give prior notice to the

government about future investments in generative AI.

Google, which has said it will appeal, has made its own

proposal that would loosen agreements with Apple ( AAPL ) and

others to set Google as the default search engine on new

devices. U.S. District Judge Amit Mehta has scheduled a trial on

the proposals for April.

The blockbuster case is one of several U.S. antitrust cases

against Big Tech companies. Apple ( AAPL ), Meta Platforms ( META ) and

Amazon.com ( AMZN ) also face allegations of maintaining illegal

monopolies in their respective markets.

Since Trump's reelection, Google has sought to make the case

that the DOJ's approach in the case would hobble the company's

ability to compete in AI and "jeopardize America's global

economic and technological leadership."

Many of the measures prosecutors proposed in November remain

intact with a few tweaks.

For example, a requirement that Google share search query

data with competitors now says that Google can charge a marginal

fee for access and that the competitors must not pose a national

security risk.

The proposal drew statements of support from Democratic and

Republican attorneys general as well as the Alphabet Workers

Union-CWA.