A federal judge ruled that Google has a monopoly on search
TL;DR
- Google has been found to illegally monopolize search services and search text advertising, according to Judge Mehta's ruling.
- The ruling showed that Google's financial agreement with major tech companies has stifled competition.
- This decision could set a precedent for future antitrust cases against major tech companies, including upcoming trials involving Amazon, Apple, and Meta.
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District Judge Amit Mehta has ruled that Google holds a monopoly in the search and advertising markets. In 2020, the U.S. Justice Department filed a lawsuit against Google claiming it prevented other companies from penetrating the search engine market.
According to the judge, “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. “It has violated Section 2 of the Sherman Act.”
Analysis and key points of the ruling
The ruling asserts that Google has illegally maintained its monopoly in the search and advertising markets, violating Section 2 of the Sherman Act. This means that Google’s dominance is not just due to superior technology but practices designed to hinder other search engine competitors. For instance, the court revealed that Google spent $26.3 billion in 2021 to secure its position as the default search engine on smartphones and browsers.
Also, the court emphasized that Google’s market share in general search services grew from 80% in 2009 to 90% in 2020, a huge gap with that of competitors such as Bing which holds only 6% of the market share.
Judge Mehta wrote, “If there is genuine competition in the market for general search, it has not manifested in familiar ways, such as fluid market shares, lost business, or new entrants.”
Additionally, the ruling highlighted Google's strategy of creating higher-priced ad auctions to drive long-term revenues.
Google’s agreements and market influence
The court found that Google’s actions including exclusive billion-dollar agreements with major companies like Apple, Samsung, and Mozilla have prevented other competitors from accessing important platforms where they could offer their services. In other words, the deals with these companies have made it difficult for search engines to compete with Google.
An example of such an agreement was Google’s $20 billion payment to Apple to be the default search engine on iPhone browsers. This shows Google’s plan to maintain its market position.
Implications for Google
Despite the ruling, the case is far from over as fines or other penalties will be decided in another hearing. The next phase will address potential sanctions, ranging from business practice restrictions to possible structural changes within Google.
Google already announced its intention to appeal. However, in September the company will also face another antitrust case about its advertising technology.