Google loses massive antitrust case over search, will appeal ruling
Reading Time: 3 minutesGoogle will appeal a U.S. District Court judge’s opinion Monday that found the technology giant acted illegally to maintain a monopoly in online search.
The decision from Judge Amit P. Mehta of the U.S. District Court for the District of Columbia is a major defeat for Google that could alter the way it does business and even change the structure of the internet as we know it, should the decision stand.
Mehta said that Google abused its monopoly power over the search business in part by paying companies like Apple to present its search engine as the default choice on their devices and web browsers. The Justice Department and states filed the antitrust suit against Google in 2020, which kicked off in court in September 2023.
Google pays companies including Apple, Samsung and Mozilla billions of dollars for prime placement in web browsers and on smartphones. In 2021 alone, Google spent $26 billion to be the default search engine across Apple and Android platforms. According to The New York Times, about $18 billion of that spend went to Apple alone. Google shares 36% of search ad revenue from Safari with Apple. The government has argued that paying for the dominant position effectively kneecapped competitors from being able to build up their own search engines to a scale that would give them the data and reach to stay competitive.
‘After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly,’ Mehta wrote in his opinion filed Monday. ‘It has violated Section 2 of the Sherman Act.’
Section 2 of the Sherman Act makes it illegal for any person or business to monopolize, attempt to monopolize or conspire to monopolize any part of trade or commerce.
The opinion caps off a years-long case — U.S. et al. v. Google — that resulted in a 10-week trial last year. The Department of Justice and a group of attorneys general from 38 states and territories, led by Colorado and Nebraska, filed similar but separate antitrust suits against Google in 2020, alleging that Google unfairly blocked out would-be search rivals like Bing and DuckDuckGo. The Department of Justice estimated that Google had a 90% share of the search market, a figure that Google disputed.
The outcome of the case is a significant win for the Justice Department in an election year when former president Donald Trump would, should he win a second term in office, almost certainly take a decidedly more hands-off, deregulatory approach to tech. President Joe Biden’s pick to lead the Federal Trade Commission, Lina Khan, has garnered a reputation for coming after big tech, particularly in regards to antitrust law, that many of those companies have not taken kindly to.
This case could set precedent for the raft of other antitrust lawsuits making their way through the courts today. The DOJ has sued Apple for making it difficult for consumers to switch away from the iPhone. The FTC has also recently sued Meta for stamping out early competitors and Amazon for squeezing sellers on its online marketplace.
Judge Mehta’s decision Monday may also impact the outcome of the Justice Department’s second antitrust suit against Google, which alleges that Google illegally monopolized the digital ads market. Arguments for that case are scheduled to begin September 9.
The judge has yet to decide remedies for Google’s behavior. He could force the company to change the way it runs its search business — or order it to sell off parts of that business. The opinion could be appealed, of course, and the final verdict may differ significantly, as happened with Microsoft’s famed antitrust case in the dot-com era.
In that case, Judge Thomas Penfield Jackson ruled that Microsoft violated antitrust laws and ordered the company to be split into two entities. Microsoft appealed the decision, and an appeals court overturned the breakup order, but Microsoft still had to take certain steps that experts today say might influence Mehta’s behavioral remedies for Google. As part of Microsoft’s settlement, the company had to share its APIs with third-party companies and appoint a panel to monitor its compliance.
Update: This article was originally published August 5 at 12:20 pm PT. It has been updated with more context and information from Google.
Reference: https://techcrunch.com/2024/08/05/google-loses-massive-antitrust-case-over-search/
Ref: techcrunch
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