Google illegally maintains monopoly, rules US court: Here’s what it means

Over a 10-week trial, testimonies from top executives at Google, Microsoft, and Apple were presented. Judge Amit Mehta, in his comprehensive 277-page decision, stated, “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.”

Google’s monopoly practices

Judge Mehta highlighted that being the default search engine is “extremely valuable real estate” for Google. To maintain this position, Google has spent billions annually to ensure its search engine remains the default on new cell phones and tech gadgets. In 2021 alone, Google invested over $26 billion in these agreements, reinforcing its monopoly, according to CNN.

The judge pointed to Google’s substantial market share, which stands at 89.2 per cent for general search services and climbs to 94.9 per cent on mobile devices, as evidence of its monopolistic behaviour.

For instance, Google reportedly pays Apple up to $12 billion annually to remain the default search engine on Apple devices.

US Attorney General Merrick Garland hailed the ruling as “a historic win for the American people,” emphasising that no company, regardless of its size or influence, is above the law. White House press secretary Karine Jean-Pierre supported this view, describing the ruling as a victory for competition.

What does it mean for Google?

This ruling represents a severe setback for Google, which has defended its search engine’s dominance as a result of consumer choice. Google’s search engine processes about 8.5 billion queries daily worldwide, nearly double the volume from 12 years ago, CNN said.

Kent Walker, Google’s president of global affairs, remarked, “This decision recognises that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available.”

The court will next determine the necessary measures or penalties to address Google’s anti-competitive practices. A hearing scheduled for September 6 will discuss these remedies. Potential outcomes could include dismantling parts of Google’s operations or restricting its ability to secure default search agreements on devices.

Google plans to appeal the decision, arguing that it unjustly penalises the company for its success.

The appeals process, which could take up to five years, will delay any immediate changes. Additionally, the ruling may pave the way for class-action lawsuits against Google, benefiting competitors like Microsoft and affecting companies like Apple, which has significantly profited from Google’s payments.

Origins of the Google antitrust case

The antitrust case against Google, spearheaded by the US Department of Justice (DOJ) and several states, focused on allegations that Google has abused its dominant position in the search and advertising markets to suppress competition.

Filed in October 2020, the case accused Google of maintaining a monopoly in the search engine market through anti-competitive practices. These practices include making exclusive agreements with device manufacturers to ensure Google is set as the default search engine, thereby limiting consumer choice and hindering potential competitors like Microsoft’s Bing and others.

The lawsuit argued that Google’s practices have not only harmed competition but also led to higher prices for advertisers and a decrease in service quality for consumers. The DOJ claimed that Google’s dominance allows it to charge inflated advertising prices while investing less in improving its search engine due to a lack of competitive pressure.

First Published: Aug 06 2024 | 9:58 AM IST