Google broke antitrust laws by acting like a monopoly in the online search and text advertising business. That was what a federal judge ruled on Monday in a landmark case that may lead the company to significantly change its operations.
“Google is a monopolist and it has acted as one to maintain its monopoly,” said the court, finding the tech company violated antitrust laws.
The decision issued by U.S. District Judge Amit Mehta, which Google said it will appeal, may mean there will be additional legal proceedings to determine what the company needs to do in order to change to no longer violate antitrust.
The case was brought forward after the Justice Department and several states sued, alleging Google dominated search via illegally maintaining its monopoly.
“This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available. We appreciate the Court’s finding that Google is ‘the industry’s highest quality search engine, which has earned Google the trust of hundreds of millions of daily users,’ that Google ‘has long been the best search engine, particularly on mobile devices,’ ‘has continued to innovate in search’ and that ‘Apple and Mozilla occasionally assess Google’s search quality relative to its rivals and find Google’s to be superior.’ Given this, and that people are increasingly looking for information in more and more ways, we plan to appeal. As this process continues, we will remain focused on making products that people find helpful and easy to use,” said Kent Walker, president of global affairs at Google in a statement to the Deseret News.
In the ruling, the judge said the offense of monopolization requires proof in two areas: 1) a company does hold a monopoly and 2) willfully maintaining that power outside of accident or business acumen or having a superior product.
The court pointed toward exclusive distribution agreements Google has that allows it to be the default search engine.
“In exchange for revenue share, Google not only receives default placement at the key search access points, but its partners also agree not to preload any general search engine on the device,” said the ruling. “Thus, most devices in the United States come preloaded exclusively with Google. These distribution deals have forced rivals to find other ways to reach users.”
Google had paid $26 billion in 2021 alone to ensure its search engine would be the default.
“Ultimately, the court concludes that Google’s exclusive distribution agreements have contributed to Google’s maintenance of its monopoly power in two relevant markets: general search services and general search text advertising,” said the ruling.
The court also said “genuine competition in the market for general search” could not be found by looking at the typical factors to determine competition.
“Time and again, Google’s partners have concluded that it is financially infeasible to switch default GSEs or seek greater flexibility in search offerings because it would mean sacrificing the hundreds of millions, if not billions, of dollars that Google pays them as revenue share,” said the court order. “These are Fortune 500 companies, and they have nowhere else to turn other than Google.”
Google had argued it had the better product, which resulted in its dominance.
A new precedent?
There are other companies including Amazon, Meta and Apple that have been sued by the U.S. government over antitrust laws.
It remains to be seen how this decision will impact those trials.