It has nothing to do with monopolies. Google was protected from defamation law with search because the page title and snippets were direct quotes from the linked result page. Whereas with AI overviews, the copy is written by a Google-controlled LLM.
Yes, the monopoly is not relevant for the court.
It is relevant for Google though, because they want to transfer it to another product.
And the court is saying that whatever that new product is, Google is not allowed to mislead the public by pretending it is search.
Making the response consist entirely of direct quotes sounds like a better user experience than what they're doing now.
I recall "Large Libel Models" was one of the sobriquets going around.
It should be noted that defamation law has a very low threshold in Germany, to the point that businesses routinely sue Google Maps users for less-than-5-stars reviews. Google had to change their display of reviews because of this.
Three stars review is taken down for "libel": https://support.google.com/maps/thread/367778263/google-maps...
HNer gets a legal threat after saying that he didn't like a doctor: https://news.ycombinator.com/item?id=44734895
Google maps german policy: https://support.google.com/contributionpolicy/answer/1699727...
Meanwhile, service in Germany is still rather poor (especially if you have children), but at least no one can complain!