A federal judge has determined that Google violated U.S. antitrust laws by unlawfully sustaining monopolies in the markets for general search services and search text advertising.
Judge Amit P. Mehta of the U.S. District Court for the District of Columbia ruled in a case initiated by the Justice Department that Google had misused its monopoly power in the search sector. This included paying companies to make its search engine the default option on their devices and web browsers.
In his opinion filed on Monday, Judge Mehta stated:
“After thoroughly reviewing the witness testimony and evidence, the court concludes that Google is indeed a monopolist and has acted to preserve its monopoly. It has breached Section 2 of the Sherman Act.”
The court identified several ways in which Google abused its dominant position:
- Paying substantial amounts to secure default status on devices and browsers
- Using user data to bolster its search engine’s dominance
- Illegally protecting its monopoly in search-related advertising
Key Findings Of Anticompetitive Behavior
The judge found that Google’s deals with Apple, Mozilla, and Android partners effectively blocked approximately 50% of the search market and 45% of the search advertising market from competitors.
These exclusive agreements prevented rivals like Microsoft’s Bing from achieving the scale necessary to challenge Google’s dominance in search and search advertising.
Judge Mehta determined that Google’s actions had significant anticompetitive impacts:
- Blocking a considerable portion of the market
- Denying rivals the scale required for effective competition
- Reducing incentives for competitors to invest and innovate in search
The case, which began in 2020, concluded with a 10-week trial last fall.
Financial Revelations
The trial revealed financial details about Google’s default search agreements.
In 2022, Google paid Apple $20 billion for default search placement on iOS devices, up from $18 billion in 2021.
Moreover, Google shares 36% of Safari’s search ad revenue with Apple.
These figures underscore the significant value of securing default search positions in the industry.
Google’s Defense & Market Share
During the trial, Google contended that its market dominance was due to the superior quality of its products rather than any anticompetitive behavior.
The company challenged the DOJ’s estimate of its 90% market share, arguing for a wider definition of its competitive environment.
Nevertheless, Judge Mehta dismissed this argument, stating:
“Google has stifled genuine competition by blocking its rivals from the most effective search distribution channels.”
Ruling On Search Advertising
Regarding search advertising, the judge determined that Google could charge excessively high prices for text ads due to the lack of competition from rivals.
However, the judge ruled in favor of Google on other claims, concluding that Google does not hold monopoly power in the broader search advertising market.
Potential Ramifications
Although Judge Mehta has not yet decided on specific remedies, the ruling could have significant implications for Google’s business model. Potential consequences might include:
- Mandatory changes to Google’s search operations
- Divestment of certain business segments
- Restrictions on default search agreements
The decision is expected to be appealed, and the final outcome may develop further, similar to the Microsoft antitrust case of the 1990s.
Broader Context
This ruling establishes a precedent that could impact other ongoing antitrust cases involving tech giants such as Amazon, Apple, and Meta.
It represents a shift in the application of century-old antitrust laws to contemporary digital markets.
What’s Next
Google is anticipated to appeal the decision, which could result in a lengthy legal battle that might influence the future of online search and digital advertising.
Additionally, Google is set to face a new antitrust trial on September 9th concerning ad tech. The DOJ will sue Google in federal court in Virginia, accusing the company of unlawfully monopolizing the digital advertising market.
Original news from SearchEngineJournal