This decision could lead to major changes in the digital landscape.
A US judge has determined that Google unlawfully stifled competition to maintain its monopoly in online search and advertising. This significant ruling is a major setback for Alphabet, Google’s parent company, and could have broad implications for the operations of technology giants. The US Department of Justice sued Google in 2020, citing its dominance over roughly 90% of the online search market. This case is one of several filed against major tech companies as US antitrust authorities work to bolster industry competition.
This case has often been seen as a potential existential threat to Google and its parent company, given their dominance in the search and online advertising markets. The penalties Google and Alphabet will face are still uncertain and will be determined in a future hearing.
The government has requested “structural relief,” which could potentially involve breaking up the company. In his ruling, US District Judge Amit Mehta noted that Google had spent billions to secure its position as the default search engine on smartphones and browsers.
“Google is a monopolist, and it has behaved as such to preserve its monopoly,” Judge Mehta stated in his 277-page opinion. Alphabet has announced its intention to appeal the ruling.
“This decision acknowledges that Google provides the best search engine but concludes that we shouldn’t be allowed to make it easily accessible,” the company said in a statement. US Attorney General Merrick Garland, the nation’s top prosecutor, praised the ruling as a “historic win for the American people.” He added, “No company—no matter how large or influential—is above the law. The Justice Department will continue to rigorously enforce our antitrust laws.”
Federal antitrust regulators have also filed ongoing lawsuits against other Big Tech companies, including Meta Platforms (which owns Facebook), Amazon, and Apple, accusing them of running illegal monopolies. The ruling on Monday follows a 10-week trial in Washington, DC, where prosecutors argued that Google spends billions of dollars each year to ensure it is pre-installed as the default search engine on devices from Apple, Samsung, Mozilla, and others.
The US government stated that Google usually pays over $10 billion annually for this privilege, ensuring a constant flow of user data that reinforces its market dominance. Prosecutors argued that this practice prevents other companies from having the chance or resources to compete effectively.
“The clearest evidence of the importance of defaults is Google’s checkbook,” argued Department of Justice lawyer Kenneth Dintzer during the trial. Google’s search engine is a major revenue driver for the company, generating billions of dollars, largely due to the advertising shown on its results pages.
Google’s lawyers argued that users choose their search engine because they find it valuable, and that Google continues to invest in improving the experience for consumers. “Google is winning because it’s better,” stated Google’s lawyer John Schmidtlein during closing arguments earlier this year.
Mr. Schmidtlein also contended during the trial that Google still faces significant competition, not only from general search engines like Microsoft’s Bing but also from specialized sites and apps that people use to find restaurants, book flights, and more. Judge Mehta, in his ruling, noted that being the default search engine is “extremely valuable real estate” for Google. He added that even if a new competitor were able to offer comparable quality, they could only compete if they were willing to pay billions in revenue share to secure such partnerships. Another lawsuit involving Google’s advertising technology is set for trial in September, while in Europe, Google has already been fined billions in monopoly cases.