Google faces major antitrust ruling for its search engine monopoly
WASHINGTON — A magistrate on Monday determined that Google’s widespread search engine has been unlawfully leveraging its dominance to suppress competition and impede innovation in a groundbreaking ruling that could disrupt the internet and disable one of the world’s most well-known companies.
The highly awaited decision issued by U.S. District Judge Amit Mehta arrives almost a year following the commencement of a trial pitting the U.S. Justice Department against Google in the nation’s largest antitrust confrontation in twenty-five years.
After examining volumes of proof that included testimony from top executives at Google, Microsoft, and Apple during last year’s 10-week trial, Mehta issued his potentially market-altering ruling three months subsequent to the two parties presenting their concluding arguments in early May.
“After having thoroughly examined and evaluated the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has behaved as one to retain its monopoly,” Mehta wrote in his 277-page ruling.
It represents a significant setback for Google and its parent, Alphabet Inc., which had consistently argued that its popularity originated from consumers’ overwhelming desire to utilize a search engine so proficient at what it does that it has become synonymous with searching for things online. Google’s search engine presently handles an estimated 8.5 billion queries per day globally, nearly doubling its daily volume from 12 years ago, according to a recent study released by the investment firm BOND.
Google almost certainly will contest the ruling in a procedure that ultimately may reach the U..S. Supreme Court.
For the time being, the ruling justifies antitrust regulators at the Justice Department, which filed its lawsuit nearly four years ago while Donald Trump was still president, and has been intensifying it efforts to curb Big Tech’s power during President Joe Biden’s administration.
The case portrayed Google as a technological bully that systematically has obstructed competition to safeguard a search engine that has become the focal point of a digital advertising machine that generated nearly $240 billion in revenue last year. Justice Department attorneys argued that Google’s monopoly allowed it to charge advertisers artificially high prices while also enjoying the luxury of having to invest more time and money into enhancing the quality of its search engine — a lackadaisical approach that harmed consumers.
As anticipated, Mehta’s ruling centered on the billions of dollars Google expends annually to establish its search engine as the default choice on new cellphones and tech gadgets. In 2021 alone, Google spent more than $26 billion to secure those default agreements, Mehta said in his ruling.
Google mocked those accusations, noting that consumers have previously switched search engines when they grew disenchanted with the results they were receiving. For example, Yahoo — now a minor player on the internet — was the most popular search engine during the 1990s before Google emerged.
Mehta stated that the evidence at trial illustrated the significance of the default settings. He highlighted that Microsoft’s Bing search engine holds an 80% share of the search market on the Microsoft Edge browser. The judge indicated that this demonstrates other search engines can prosper if Google is not locked in as the predetermined default option.
Nevertheless, Mehta acknowledged the quality of Google’s product as a crucial aspect of its dominance, stating unequivocally that “Google is widely acknowledged as the best (general search engine) available in the United States.”
Mehta’s determination that Google has been running an illicit monopoly sets up another legal stage to ascertain what kinds of alterations or penalties should be enforced to reverse the harm done and restore a more competitive environment.
The potential outcome could lead to a comprehensive directive requiring Google to disassemble some of the foundations of its internet empire or prevent it from spending billions yearly to ensure its search engine automatically responds to queries on the iPhone and other internet-connected devices. Following the subsequent phase, the judge could conclude that only modest changes are necessary to level the playing field.
If a significant upheaval occurs, it could prove advantageous for Microsoft, whose own authority was undermined during the late 1990s when the Justice Department targeted the software maker in an antitrust lawsuit alleging it of misusing the dominance of its Windows operating system on personal computers to exclude competition.
That Microsoft case paralleled the one brought against Google in several ways and now the result could also reflect similarly. Just as Microsoft’s arduous antitrust battle created diversions and impediments that opened up more opportunities for Google after its 1998 inception, the ruling against Google could be a boost for Microsoft, which already has a market value of more than $3 trillion. At one time, Alphabet was valued higher than Microsoft, but now trails its competitor with a market value of approximately $2 trillion.
Aside from enhancing Microsoft’s Bing search engine, the outcome could harm Google at a crucial turning point that is shifting technology in the era of artificial intelligence. Both Microsoft and Google are among the early frontrunners in AI in a battle that now could be influenced by Mehta’s market-disrupting decision.
Microsoft CEO Satya Nadella was one of the Justice Department’s standout witnesses during the testimony that detailed his exasperation with Google deals with the likes of Apple that made it nearly impossible for the Bing search engine to make any progress, even as Microsoft invested more than $100 billion in enhancements since 2009.
“You get up in the morning, you brush your teeth and you search on Google,” Nadella said at one point in his testimony. “Everybody talks about the open web, but there is really the Google web.”
Nadella also expressed concern that it might necessitate an antitrust crackdown to ensure the situation didn’t deteriorate as AI emerges as a more prominent force in search.
Google still faces other legal threats besides this one, both in the U.S. and abroad, including antitrust lawsuits filed against Google domestically and internationally. In September, a federal trial is set to commence in Virginia over the Justice Department’s accusations that Google’s advertising technology constitutes an illegal monopoly.