A US judge has ruled that Google violated antitrust laws by establishing an illegal monopoly over the online search and advertising sectors.
The ruling by Judge Amit Mehta found that Google made multibillion-dollar deals with device manufacturers like Apple and Samsung to ensure its search engine was the default on their devices, significantly paying Apple over $26 billion in 2021. This practice was deemed to have unfairly suppressed competition, solidifying Google’s monopoly.
The ruling does not immediately specify the consequences for Google. Instead, a separate trial will be held to determine the remedies, which could range from altering Google’s contract practices to breaking up the company. One more likely outcome is the prohibition of default search agreements, meaning Google could still be chosen as the default search engine but without making significant payments to secure this status. Companies like Apple, Samsung, and Mozilla, which significantly benefit from Google’s payments, are closely monitoring the situation.
Another potential remedy could mirror the European approach, where users select their preferred browser from a choice screen when logging into devices. The most severe measure would involve splitting Google’s search business from the rest of its operations, along with possible fines or sanctions on other parts of its business.
Google plans to appeal the ruling, which means any immediate changes to its services are unlikely. Throughout the trial, Google argued that its market dominance is due to its superior product, not unfair practices. Following the ruling, Google’s president of global affairs, Kent Walker, reiterated this stance, emphasising the quality of Google’s search engine. “This decision recognises Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available.”
There is historical precedent for big tech companies diluting antitrust violations on appeal. A similar case involved Microsoft, which successfully appealed to lessen the consequences after a 2000 ruling to break up parts of its business. Eventually, Microsoft and the Justice Department reached a settlement that imposed some restrictions but left the company largely intact.
Why is this important?
In addition to the search monopoly case, Google faces another antitrust lawsuit from the Justice Department concerning its digital advertising practices. This suit claims Google monopolised online advertising, compelling companies to use its technology and stifling competition. This second case, which targets a significant source of Google’s revenue, is set to go to trial in September. Google denies these allegations, arguing that the Justice Department is unfairly favoring competitors in a dynamic market.
The outcomes of these legal battles will have significant implications for Google’s operations and could set important precedents for regulating other large tech companies.