I am sure the author put "Google X" in the "company" line of the order form and they didn't ask any further questions. (Or if they did, "it's confidential", and they probably sent him a couple extras for free.)

I'm pretty sure this is not lawful so you can't be sued if you lied in the first place.

Why would it not be lawful?

Ask the other way around: Why would this be lawful?

If you sell something you give up any rights on the item sold. You can not any longer demand what the object should be used for, nor by whom it should be used.

You can still consider it a breach of the contract.

As nkrisc already pointed out, just because you put something in a contract it doesn't mean it's enforceable, or lawful.

See, if it's not lawful in the first place, you can't "breach" it.

IANAL, but I had enough law during my studies to know where this will lead. Maybe you can do these kind of shenanigans in the US of A, but I'm confident this kind of contract clauses are not possible in Europe.

Sure, but would that even hold up in court? You can put anything in a contract, that doesn't make it enforceable.

It's possible they have agreements with whomever they're supplying that they won't compete by selling direct to consumers.