Y Combinator says Google is a ‘monopolist’ that has ‘stunted’ the startup ecosystem

Fabled startup capitalist and accelerator Y Combinator has immoderate prime words for Google successful an amicus little it conscionable submitted successful the U.S.’s monopoly lawsuit against the hunt giant.

In the brief, YC charged that Google is simply a “monopolist” that has “stunted” the U.S. startup ecosystem by making VC firms similar itself hesitate to money web hunt and AI startups successful what it calls a “kill zone” astir Google.

“Google has chilled autarkic firms similar YC from backing and accelerating innovative startups that could different person challenged Google’s dominance,” YC wrote successful the filing. “The effect is simply a scenery that has been artificially stunted and stagnant.”

YC’s little says it’s presently seeking to money startups processing question-based and agentic AI tools that could alteration however radical interact with accusation connected the internet. But YC says there’s a “clear risk” that Google volition usage its monopoly powerfulness to dilatory down the aboriginal of those markets. 

“Google has efficaciously frozen the web hunt and substance advertizing markets for implicit a decade,” YC wrote.

The brief, filed May 9, was spotted connected X by VC Sheel Mohnot, the wide spouse of Better Tomorrow Ventures and a prolific societal media poster.

But YC isn’t calling for an contiguous breakup of Google, arsenic its CEO Garry Tan made wide successful a reply to Mohnot.

Rather, YC is arguing Google should curb practices it considers anti-competitive, similar paying Apple billions of dollars to marque Google the iPhone’s default hunt engine. It besides wants Google to bash things it argues would assistance startups, similar opening up Google’s hunt scale truthful others tin bid LLMs connected it.

For perspective, Google’s hunt algorithms person been its highly prized concealed since its inception. For YC to inquire the authorities to unit Google to unfastened it up to competitory LLMs is astir similar demanding the authorities marque Microsoft Windows unfastened source, oregon forcing Amazon to freely present packages for competitors.

If Google doesn’t instrumentality specified changes wrong a 5 twelvemonth timeframe, past YC advocates for the authorities to unit Google to divest oregon rotation retired parts of itself. YC CEO Tan characterized this thought successful an X station arsenic a “spinoff hammer” threat. He besides posted that “we emotion Google” but wants “little tech” to succeed, too, successful a separate X thread.

To recap, past twelvemonth Google mislaid a monolithic antitrust lawsuit implicit its dominance of the hunt market. While Google appeals the decision, the U.S. authorities is mulling imaginable punishments (‘remedies’) that Google mightiness beryllium required to implement, such arsenic spinning disconnected Chrome. Those remedies are expected to beryllium delivered by August 2025.

YC’s stance whitethorn travel arsenic a astonishment to those who person followed its latest partnerships with Google: astir notably, Google Cloud gave YC startups entree to a dedicated clump of Nvidia GPUs past year. Google co-founder Larry Page besides made a uncommon in-person appearance to talk astatine a YC lawsuit successful December. 

Google has besides acquired astatine slightest 2 YC-backed startups: Flutter successful 2014, and Fridge in 2011. It besides invested successful YC startup Infisical done its Gradient money successful 2023. 

However, YC is besides intimately tied to OpenAI, which is now straight competing against Google connected search. OpenAI’s CEO Sam Altman utilized to tally YC, portion OpenAI was the archetypal radical affiliated with YC Research. 

That’s thing Mohnot pointed to connected X, penning that the biggest beneficiary of YC’s projected remedies, by far, would beryllium OpenAI, alternatively than YC’s famously aboriginal signifier startups, portion commenting that the amicus little “paints Google arsenic much almighty than it is.”

TechCrunch asked YC however it would respond to this critique, and whether it has immoderate circumstantial examples of areas that it astir apt would person funded had it not been for Google. So far, YC hasn’t responded to our remark request. 

Google didn’t respond to a petition for remark astir YC’s amicus brief, either. However, it argued successful a blog station past twelvemonth that the DOJ’s proposals are “radical and sweeping” and would wounded consumers, business, and developers.