The legendary startup investor and accelerator Y combinator have Google’s choice words in an Amicus brief just filed in a US monopoly case against the search giant.
Simply put, YC accused Google of being the “monopoly” of “scattering” the US startup ecosystem by reluctantly searching for web and raising funds for AI startups called Google’s “kill zone.”
“Google is chilling independent companies like YC from funding and acceleration to innovative startups that could challenge Google’s advantage,” YC wrote in the submission. “The result has been an artificially hampered and stagnant landscape.”
According to YC’s brief, it is currently seeking to fund a startup of question-based and agent AI tools that can change the way information is interacting with internet. However, YC says there is a “clear risk” that Google will use its monopoly power to slow the future of those markets.
“For over a decade, Google has effectively frozen the web search and text ad market,” writes YC.
The brief, submitted on May 9, was discovered on X by VC Sheel Mohnot, general partner of Beater Tomorrow Ventures and prolific social media poster.
However, YC is not asking for an immediate breakup of Google, as CEO Garry Tan revealed in a reply to Mohnot.
Rather, YC argues that it considers Google to be anti-competitive, such as paying billions of dollars to make Google the default search engine for iPhone. I also hope that Google will do what it claims to help Startups. It allows others to train LLM, such as opening Google’s search index.
Because of its perspective, Google’s search algorithm has been highly regarded since its inception. Requiring YC to force Google to do it on a competitive LLM is like asking the government to make Microsoft Windows open source or forcing Amazon to provide the package freely to its competitors.
If Google does not implement such changes within the five-year time frame, YC advocates that the government forces Google to sell or spin out a portion of itself. YC CEO Tan characterized the idea as a “spin-off hammer” threat in his X post. He also posted “Google Love” but hopes that “small technology” will also succeed in another X-thread.
In summary, last year Google lost a massive antitrust case about the advantages of the search market. While Google appeals its decision, the US government is pondering potential punishments (“reliefs”) that Google may need to implement, such as spinning Chrome. These remedies are expected to be delivered by August 2025.
YC’s stance can be a surprise to anyone who follows the latest partnership with Google. Most notably, Google Cloud last year made YC startup accessible to dedicated clusters of NVIDIA GPUs. Google co-founder Larry Page also made an unusual face-to-face appearance to speak at the YC event in December.
Google has also acquired at least two YC-backed startups: Flutter in 2014 and refrigerators in 2011. He also invested in Infisical in 2023 through the Gradient Fund.
However, YC is closely linked to Openai, and currently competes directly with Google when searching. Openai CEO Sam Altman ran YC, but Openai was the first group to belong to YC Research.
That’s what Monot pointed out in X, writing that the biggest beneficiary of YC’s proposed remedy is far more Openai, not YC’s well-known early-stage startup.
TechCrunch asked YC how they would respond to this critique and if there were any concrete examples of areas that would have probably been funded if it weren’t for Google. So far, YC has not responded to requests for comment.
Google also did not respond to requests for comment on YC’s Amicus Brief. However, in a blog post last year, he argued that DOJ’s proposal would be “radical and clean” and would hurt consumers, businesses and developers.
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