Google hit with scathing accusations from top VC firm | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Google Parent Alphabet (GOOGL) faced a day of reckoning in April when the U.S. Department of Justice (DOJ) prevailed in a landmark case against it. So far, May 2025 isn’t going any better.

The tech-sector giant is still recovering from the recent ruling, in which the U.S. District Court for the Eastern District of Virginia ruled that its methods of monopolizing digital advertising markets had continuously violated antitrust law.

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This landmark decision shocked most of the tech world, which wondered if it would have further implications for the industry.

Weeks later, the accusations against Google aren’t stopping. An extremely prominent name in the venture capital (VC) space recently filed an amicus brief for the monopoly case, in which it levied harsh accusations against the Silicon Valley behemoth and speculated that it sees bigger problems ahead unless action is taken.

A top Silicon Valley venture capital firm has levied strong accusations against Google and Alphabet CEO Sundar Pichai.

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Startup incubator has blunt words for Google and its alleged monopoly

Anyone who has founded a tech startup or simply follows the industry closely is likely familiar with the Y Combinator. A startup accelerator and venture capital firm, it has helped seed many of the sector’s most promising new companies, including Airbnb, Instacart, and Stripe.

Founded in 2005 by tech industry leaders such as Paul Graham, Jessica Livingstone, and Trevor Blackwell, Y Combinator has founded more than 5,000 startups. It’s safe to say the company knows about innovation, which is why it finds Google’s actions deeply concerning.

In its amicus brief filed on May 9, a legal document filed by a third party with no direct involvement in the court case, Y Combinator laid out the problems it sees with Google’s operations. One section highlighted the importance of open competitiveness in a free market and its consequences for a healthy, innovative ecosystem.

As the startup accelerator’s leaders see it, Google’s way of conducting business has created a deadened area around innovation, described as the “kill zone.” Because of this, VC firms have become reluctant to fund startups in the artificial intelligence (AI) and digital search spaces, due to the perceived risk of Google strangling new and early-stage companies in these fields.

“By Foreclosing competition, Google has chilled independent firms like YC from funding and accelerating innovative startups that could otherwise have challenged Google’s dominance,” it states. “The result is a landscape that has been artificially stunted and stagnant. In our view, Plaintiffs’ proposed remedy package would help to unlock a more dynamic, globally competitive U.S. technology startup ecosystem.”

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Y Combinator also notes that in the current age of innovation, simply developing a new product is no longer enough.

It argues that startup founders must be able to deliver what their company produces to its target user base, free from what it describes as the “restrictive dealing and self-preferencing” created by Google.

Y Combinator sees Google as a strong threat to innovation

It seems that from the perspective of Y Combinator’s leaders, judicial action against Google is necessary, as it would prevent Google from continuing to strangle innovation and negatively impact startup funding.

This comes at an especially critical time, as more and more entrepreneurs look to break into the fast-growing areas such as AI, machine learning, and other areas that could fall within the parameters of the “kill zone” noted by Y Combinator.

It is clear that the startup accelerator believes a more level playing field is essential for new companies entering the tech field and that Google’s alleged monopolistic hold could severely compromise this, making things more difficult for both founders and venture capitalists who might be cautious about backing them.

As the brief states, “YC believes that this is a moment when dynamic competition could break out, but effective antitrust remedies in this case will be critical for the innovative startups currently trying to attract venture capital, reach users, and gain scale.”