Competitive Intelligence Brief

UpdatedGoogle is discontinuing the legacy Google Assistant on Android phones, tablets and paired devices (Wear OS watches, headphones, Android Auto projection) starting September 4, 2026, forcibly replacing it with Gemini. Once a device transitions there is no way to switch back, and Google is notifying users by email. Vehicles with Google Built-in keep Assistant for now.

On August 5, 2026 the UK Competition Appeal Tribunal certified an opt-out collective action against Google covering roughly 880,000 UK-domiciled advertisers and seeking up to £5 billion (about $6.7 billion). The claim alleges Google abused its dominance across mobile operating systems, app distribution and search advertising (tying Search and Chrome onto Android, paying Apple for default placement, and biasing its Search Ads 360 platform toward Google) to overcharge advertisers. Certification is the procedural gate to a trial on the merits, not a finding that Google broke the law; Google called it 'speculative and opportunistic' and will contest it.

On July 23, 2026 the European Commission fined Google €890 million ($1 billion) in its first and largest-ever DMA penalty: €460 million for self-preferencing its own shopping, hotels, transport and sports results in Google Search over rivals, and €430 million for blocking Google Play developers from steering users to cheaper channels outside the store. Google has 60 days to end both practices or risk periodic penalties up to 5% of its worldwide turnover, and says it is reviewing the decision and weighing an appeal.

On July 16, 2026 the European Commission adopted a binding DMA specification decision under Article 6(11) requiring Google to share anonymised Search ranking, query, click and view data with rival search engines, and it explicitly makes AI chatbots that offer search functionality eligible recipients of that same data. Sharing runs on FRAND cost-recovery pricing and is due to begin January 2027. Eligibility is limited to a genuine EU search engine running at least two consecutive years, or one founded within two years that raised over €50 million and has at least 50,000 monthly EU users. The measure carries no financial penalty; it specifies how Google must comply after regulators found its earlier data-sharing offer, which excluded AI chatbots and stripped out 90 to 100% of unique queries, produced no meaningful uptake.

Google's Gemini 3.5 Pro is months behind schedule, not shipped as the leaked July 17 target claimed. Bloomberg reported on July 16, 2026 that the flagship model's coding capabilities were short of internal expectations, and Alphabet shares fell 4% as OpenAI and Meta shipped stronger coding models.

A July 8, 2026 EU General Court ruling closed Google's last route to pre-empt two binding DMA decisions due July 27, 2026. One (case DMA.100220, Article 6(7)) forces Google to give rival AI services free and effective interoperability with the Android system features Gemini uses: wake-word invocation, the long-press gesture, on-screen context awareness and neural-processing-unit access. The other (DMA.100209, Article 6(11)) forces Google to share anonymized Search ranking, query and click data with rival search engines and AI chatbot providers on FRAND terms. Compliance begins immediately on issuance; Google can challenge only the content afterward, and non-compliance fines reach up to 10% of Alphabet turnover (over $35 billion).

On July 1, 2026 the Patent and Market Court in Stockholm ordered Google to pay about $1.97 billion in damages plus accrued interest to Klarna's PriceRunner for illegally favoring its own comparison shopping service for years, the largest competition damages award in Swedish history. The case is a follow-on to the European Commission's 2017 Google Shopping decision, and Google says it disagrees with the ruling and is weighing an appeal, so a final payout could be years away.

Google's AI talent drain went from a single marquee exit to a sustained run. Inside a fortnight, Gemini co-author and 'Attention Is All You Need' author Noam Shazeer left for OpenAI, then DeepMind Nobel laureate John Jumper, AI-coding lead Jonas Adler, and pretraining specialist Alexander Pritzel all left for Anthropic. Four senior departures from the team behind Gemini and AlphaFold in a matter of days, three of them to the same rival, Anthropic. Bloomberg's reporting cites compute access (researchers queuing for Google's own TPUs) and pre-IPO equity at Anthropic and OpenAI as the pull.

On June 18, 2026 Perplexity launched Brain, a self-improving memory system for its Computer agent, in Research Preview for Max ($200/month) and Enterprise Max subscribers. Brain builds a traceable context graph of what the agent did, what worked, and what got corrected, then synthesizes it overnight into a per-user LLM wiki loaded before each task. Perplexity's internal tests report 25% higher answer correctness on repeated tasks, 16% better recall, and 13% lower cost on context-heavy work. The figures are first-party with no independent benchmark yet.

Perplexity is now a disciplined pre-IPO company, not a flailing startup: it's holding a self-imposed 2028 IPO line by choice while rivals rush to file. CEO Aravind Srinivas told CNBC on June 9, 2026 that Perplexity plans to go public in 2028 regardless of how the confidential IPO filings of Anthropic (valued near $1T) and OpenAI ($852B) perform; Chief Business Officer Dmitry Shevelenko framed holding 2028 as the earliest date as a strategy that let Perplexity 'build a healthy, high-growth business.'

Within two weeks of Google's May 19 AI-search overhaul, DuckDuckGo traffic ran ~84% above baseline and its no-AI search page visits tripled on May 28, a measurable user-defection signal against Google force-feeding AI with no opt-out.

At Google I/O on May 19, 2026, Google made Gemini 3.5 Flash the default model in AI Mode for everyone globally and shipped 'the biggest upgrade to our Search box in over 25 years,' plus background 24/7 Search Agents, directly adopting Perplexity's answer-and-agent framing at Google's scale.

At I/O (May 19, 2026) Google restructured consumer AI subscriptions, launching a $100/month AI Ultra tier and cutting its top Ultra plan from $250 to $200, a signal Google was mispriced and is now competing aggressively on AI value, not just distribution.

An Ahrefs study found Google AI Overviews correlate with a 58% drop in click-throughs for top-ranking pages (nearly double the prior year's decline), triggering a Penske Media antitrust suit and an EU competition investigation; a narrative lever for Perplexity in media/publishing verticals.

On February 3, 2026, the DOJ and a coalition of states appealed the search-monopoly remedies ruling, calling the behavioral remedies a 'slap on the wrist for a recidivist monopolist' and seeking stronger structural relief, keeping Google's default-distribution model legally unsettled into 2026 and 2027.

As of June 2026 Perplexity has repositioned from answer engine to a 'hybrid neutral orchestration layer': a model- and chip-agnostic platform that routes each task to the best model across device and cloud, which it frames as its durable advantage versus Google, OpenAI and Anthropic (company claim).

Perplexity abandoned advertising entirely in early 2026, with an executive arguing 'a user needs to believe this is the best possible answer', positioning trust and freedom from commercial bias against Google's structurally ad-funded search (company claim).

Google positions itself as a full-stack, billion-user AI company (custom silicon to models to products touching billions) and now openly adopts the 'answer' and 'agent' framing Perplexity pioneered, but backed by distribution Perplexity cannot match (company claim).

Perplexity's Sonar API is priced per million tokens (Sonar $1 in/$1 out; Sonar Pro $3 in/$15 out; Deep Research $2 in/$8 out) plus per-request and citation/search fees, a usage-based developer model competing with Google's Gemini API/Vertex.

Google AI Pro is $19.99/month, at functional price parity with Perplexity Pro ($20), but bundles YouTube Premium Lite, 5TB storage, and Gemini across Gmail/Docs, none of which Perplexity offers.

Google no longer sells Gemini as a standalone Workspace add-on: it is bundled into Business Standard ($14/user/month) and above, meaning Google's enterprise AI distribution is effectively zero incremental cost to existing Workspace customers.

Perplexity leans on partner bundles to reach users outside its paywall: Deutsche Telekom's T Phone 3, for example, includes 18 months of Perplexity Pro ($360 value) free. It's a distribution workaround against Google's native free reach, but one that creates churn risk when promos expire.