A judge declared on Monday that Google, the company’s widely used search engine, has been unlawfully abusing its market dominance to impede competition and innovation.
This landmark ruling has the potential to upend the internet and severely damage one of the most well-known businesses in the world.
The highly awaited ruling by U.S. District Judge Amit Mehta was made about a year after the trial began, which was the largest antitrust battle in the history of the nation, between Google and the U.S. Justice Department.
Mehta rendered his potentially game-changing ruling three months after the two parties concluded their 10-week trial last year, having examined mountains of documentation that included testimony from high-ranking Google, Microsoft, and Apple executives. Mehta also gave his ruling in early May.
“The court concludes that Google is a monopolist and that it has behaved as such to preserve its monopoly, having carefully considered and weighed the witness testimony and evidence,” Mehta concluded in his 277-page decision.
According to him, Google has a monopoly because of its dominance in the search business.
Google “enjoys an 89.2% share of the market for general search services, which increases to 94.9% on mobile devices.”
It is a significant blow for Google and its parent company, Alphabet Inc., who had adamantly maintained that the reason for its success was the overwhelming desire of users to utilize a search engine that is so adept at what it does that it has come to be associated with doing online research.
Laptops 1000According to recent research conducted by the investment firm BOND, Google’s search engine processes an estimated 8.5 billion requests worldwide every day, roughly doubling its daily volume from 12 years ago.
Google’s head of worldwide affairs, Kent Walker, announced that the corporation plans to challenge Mehta’s conclusions.
Walker stated, “This ruling acknowledges that Google provides the greatest search engine, but it concludes that we shouldn’t be permitted to make it widely accessible.”
For the time being, the ruling supports antitrust authorities at the Justice Department, who intensified their efforts to limit Big Tech’s influence during President Joe Biden’s administration and filed their complaint almost four years ago, when Donald Trump was still president.
Attorney General Merrick Garland declared, “This victory against Google is a historic win for the American people.”
“No business, no matter how big or powerful, is above the law.
Our antitrust rules will remain strictly enforced by the Justice Department.
In the lawsuit, Google was portrayed as a technological bully who deliberately stifled competition to preserve its search engine, which has grown to be the hub of an enormous digital advertising business that brought in close to $240 billion in revenue last year.
Attorneys for the Justice Department contended that Google’s monopoly allowed it to charge advertisers unnecessarily high fees while also enjoying the luxury of not having to spend more time or money on search engine quality improvements, a careless strategy that damaged users.
Mehta’s decision centred on the billions of dollars that Google invests annually to set its search engine as the default on brand-new smartphones and other electronic devices.
Mehta stated in his decision that Google paid more than $26 billion in 2021 alone to lock up those default clauses.
Google mocked those claims, pointing out that users have switched search engines in the past when they were unhappy with the results they were receiving.
For example, before Google’s introduction, Yahoo was the most widely used search engine in the 1990s.
Mehta stated that the trial’s evidence demonstrated the significance of the default settings.
Laptops 1000He mentioned that 80% of searches on the Microsoft Edge browser are conducted via Microsoft’s Bing search engine.
According to the judge, this demonstrates that alternative search engines can succeed in the event that Google is not forced to be the only available choice.
Mehta asserted categorically that “Google is widely recognized as the best (general search engine) available in the United States,” yet he also acknowledged that the company’s superior product quality had a significant role in its supremacy.
Mehta’s move was criticized by the Consumer Choice Centre, a lobbying organization that has opposed prior measures to limit company power.
According to deputy director of the centre Yael Ossowski, “the United States is drifting towards the anti-tech posture of the European Union, a part of the world that makes almost nothing and penalizes successful American companies for their popularity.”
Mehta’s determination that Google has been operating an illegal monopoly establishes a new legal process to decide what kind of sanctions or adjustments should be made in order to undo the harm and bring back competition in the market.
To start laying the groundwork for the upcoming stage, he set a hearing for September 6.
The possible result might be a broad injunction compelling Google to tear down part of the foundations of its online empire or prohibiting it from making payments to guarantee that its search engine responds to enquiries on the iPhone and other devices automatically.
Alternatively, the court may decide that little adjustments are necessary to level the playing field.
“Depending on the remedy, Google’s loss in its search antitrust trial could be a huge deal,” senior analyst Evelyn Mitchell-Wolf of Emarketer stated.
In any case, she continued, a protracted appeals procedure will postpone any direct consequences for customers and advertising.
George Hay, a Cornell University law professor who served as the head economist for the Justice Department’s antitrust section for the majority of the 1970s, estimated that the appeals process might take up to five years.
Google will be able to prevent Mehta from prohibiting default search deals thanks to this drawn-out procedure, according to Hay. However, the corporation will likely still be vulnerable to class-action lawsuits based on the judge’s conclusions that advertisers were overcharged due to monopolistic pricing.
In the event of a major upheaval, Microsoft may emerge victorious, as the software giant’s authority was challenged in the late 1990s when the Justice Department accused it of abusing its control over the Windows operating system to prevent competitors from entering the market.
In many respects, the Microsoft case paralleled the Google lawsuit, and the outcome now might have a similar effect.
The ruling against Google may benefit Microsoft, which is currently worth more than $3 trillion, in the same way that Microsoft’s bitter antitrust litigation produced deterrents and barriers that gave rise to more opportunities for the search engine following its founding in 1998.
With a market value of almost $2 trillion, Alphabet now lags behind its rival Microsoft, although it was once worth more than the latter.
Apple may see a decline in profits if Mehta decides to restrict or outright prohibit Google’s default search deals.
Mehta stated that although some of his conclusion was withheld to safeguard proprietary company information, Google paid Apple an estimated $20 billion in 2022—a doubling from 2020.
The judge also pointed out that Apple had occasionally thought about developing its own search technology, but had changed its mind after an analysis in 2018 predicted the business would lose over $12 billion in income in the first five years following a split from Google.
Apple’s services segment, which has been growing gradually and brought in $85 billion in revenue during the company’s most recent fiscal year, has benefited from Google’s payments.
The antitrust section of the Justice Department has recently targeted some of the largest corporations in the world.
It filed a lawsuit against Apple in March and declared a broad legal action against Live Nation Entertainment, the company that owns Ticketmaster, in May.
Investigators looking into the contributions of Nvidia, Microsoft, and OpenAI to the artificial intelligence revolution have also begun probes.
Some significant lawsuits have been won by the Biden administration, including one that prevented the merger of Spirit Airlines and JetBlue Airways, two of the largest publishers in the world.
It has also experienced several noteworthy failures, notably in the healthcare and sugar sectors.
Other legal challenges, both domestically and internationally, are posed against Google.
A court trial over the Justice Department’s claims that Google’s advertising technology amounts to an illegal monopoly is set to commence in September in Virginia.
