A US judge has determined that Google acted illegally to stifle its competition and maintain a monopoly on online search and related advertising. This landmark decision on Monday is a significant blow to Alphabet, Google’s parent company, and could potentially reshape business practices for major technology companies.
The US Department of Justice sued Google in 2020 over its control of approximately 90% of the online search market. This case is one of several filed against big tech companies as US antitrust authorities aim to bolster competition in the industry.
This case has been described as posing an existential threat to Google and its parent company due to its dominance in search and online advertising. The specific penalties Google and Alphabet will face are yet to be determined and will be decided in a future hearing. The government has requested “structural relief,” which could theoretically lead to the breakup of the company.
US District Judge Amit Mehta stated in his decision that Google paid billions to ensure it remains the default search engine on smartphones and browsers. “Google is a monopolist, and it has acted as one to maintain its monopoly,” Judge Mehta wrote in his 277-page opinion. Alphabet plans to appeal the ruling.
“This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available,” the company said in a statement. US Attorney General Merrick Garland hailed the ruling as a “historic win for the American people.”
“No company – no matter how large or influential – is above the law,” Garland said in a statement on Monday. “The Justice Department will continue to vigorously enforce our antitrust laws.”
Federal antitrust regulators have also filed pending lawsuits against other Big Tech companies, including Meta Platforms, which owns Facebook, Amazon.com, and Apple Inc, accusing them of operating unlawful monopolies.
Monday’s ruling follows a 10-week trial in Washington DC, during which prosecutors accused Google of spending billions annually to Apple, Samsung, Mozilla, and others to be pre-installed as the default search engine across platforms. The US government claimed Google typically pays more than $10 billion annually for this privilege, securing its access to user data and maintaining its market hold. This practice, prosecutors argued, has prevented other companies from meaningfully competing.
“The best testimony for that, for the importance of defaults, is Google’s cheque book,” argued Department of Justice lawyer Kenneth Dintzer during the trial. Google’s search engine generates significant revenue for the company, primarily through advertising displayed on its results pages. Google’s lawyers defended the company, arguing that users are attracted to their search engine because they find it useful and that Google invests in making it better for consumers.
“Google is winning because it’s better,” said Google’s lawyer John Schmidtlein during closing arguments earlier this year. Schmidtlein also argued that Google faces intense competition, not just from general search engines like Microsoft’s Bing, but also from specialized sites and apps used to find restaurants, airline flights, and more.
Judge Mehta concluded that being the default search engine is “extremely valuable real estate” for Google. “Even if a new entrant were positioned from a quality standpoint to bid for the default when an agreement expires, such a firm could compete only if it were prepared to pay partners upwards of billions of dollars in revenue share,” Judge Mehta wrote.
Another case against the technology company over its advertising technology is set to go to trial in September. Meanwhile, in Europe, Google has been fined billions in monopoly cases.
