A United States’ federal judge has ruled that Google holds an unlawful monopoly over online searches and related advertising.
This marks a significant victory for U.S. antitrust authorities, who have been waging series of legal battles against the market dominance of several Big Tech companies.
The Justice Department had sued Google, accusing the tech giant of controlling approximately 90% of the online search market and 95% of the smartphone search market.
U.S. District Judge Amit Mehta highlighted that Google paid $26.3 billion in 2021 to secure its search engine as the default on smartphones and browsers, maintaining its dominant market position.
“The court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly,” Judge Mehta wrote in his ruling.
The decision against Alphabet Inc., Google’s parent company, targets its primary revenue generator and sets the stage for a subsequent trial to determine potential remedies.
Possible outcomes could include prohibiting Google from paying smartphone manufacturers billions of dollars to keep its search engine as the default option on new devices.
“The default is extremely valuable real estate… 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 and make them whole for any revenue shortfalls resulting from the change,” Mehta noted.
The Judge further emphasised the financial implications for Google, stating, “Google, of course, recognises that losing defaults would dramatically impact its bottom line. For instance, Google has projected that losing the Safari default would result in a significant drop in queries and billions of dollars in lost revenues.”
This ruling is the first significant decision in a series of cases to tackle alleged monopolistic practices in the tech industry.
Over the past four years, federal antitrust regulators have also initiated lawsuits against Meta Platforms, Amazon and Apple Inc., alleging illegal monopolies.
Another trial against Google concerning its advertising technology is scheduled for September.
The Google search case, filed in 2020, was the first instance in a generation where the U.S. government accused a significant corporation of maintaining an illegal monopoly.
The last comparable case was settled in 2004 when Microsoft agreed with the Justice Department over allegations that it had forced its Internet Explorer web browser on Windows users.
