Y Combinator Accuses Google of Monopolizing Search, Stifling Startup Innovation

Startup accelerator Y Combinator has filed an amicus brief in the U.S. antitrust case against Google, accusing the tech giant of being a monopolist.

In the brief, YC claims Google's dominance has created a "kill zone" around search and AI, discouraging venture capital firms from investing in competing startups. YC argues this has "stunted" the U.S. startup ecosystem.

YC's Concerns and Proposed Remedies

YC expresses concern about funding startups developing innovative AI tools due to the risk of Google leveraging its market power. The accelerator claims Google has "frozen" the web search and text advertising markets for over a decade.

YC isn't demanding an immediate breakup of Google. Instead, it urges Google to adopt pro-competitive practices, such as:

  • Ending exclusive default search engine deals, like the one with Apple.
  • Opening its search index for others to train large language models (LLMs).

If Google fails to implement these changes within five years, YC suggests the government force Google to divest or spin off parts of its business. YC CEO Garry Tan refers to this as a "spinoff hammer" threat.

YC's Relationship with Google and OpenAI

YC's stance may seem surprising given its recent partnerships with Google, including Google Cloud providing YC startups access to Nvidia GPUs and Google co-founder Larry Page speaking at a YC event.

However, YC also has close ties to OpenAI, a direct competitor to Google in search. OpenAI CEO Sam Altman formerly led YC, and OpenAI was the first group affiliated with YC Research.

Critique and Response

Some critics, like VC Sheel Mohnot, argue that OpenAI, not early-stage startups, would benefit most from YC's proposed remedies. Mohnot also suggests the brief overstates Google's power. YC has not yet responded to these criticisms or provided specific examples of stifled investments.

Google has not commented on YC's brief but has previously called the DOJ's proposals "radical and sweeping," claiming they would harm consumers, businesses, and developers.

The U.S. government is expected to deliver its remedies in the ongoing antitrust case against Google by August 2025.