In a landmark decision, a U.S. judge ruled on Monday that Google has violated antitrust law by spending billions of dollars to establish and maintain an illegal monopoly as the world’s default search engine. This ruling marks a significant triumph for federal authorities in their ongoing battle against Big Tech’s market dominance.
U.S. District Judge Amit Mehta, presiding in Washington, D.C., articulated in his written decision that “Google is a monopolist, and it has acted as one to maintain its monopoly.” This assertion underscores the extensive control Google wields over the online search market, commanding about 90% of searches overall and 95% on smartphones. The judge highlighted how Google’s financial muscle has enabled it to pay billions to secure default status on various devices, effectively stifling competition.
Google loses massive antitrust case over its search dominance https://t.co/m7fyR215uK
— Daily Press (@Daily_Press) August 5, 2024
Mehta’s ruling sets the stage for a consequential second trial aimed at determining appropriate remedies, which could include a potential breakup of Google’s parent company, Alphabet. Such a breakup would dramatically alter the landscape of the online advertising market, a sector where Google has been the dominant force for years. This phase, however, could be protracted, potentially extending the legal battle into 2026, given the possibility of appeals to higher courts.
Shares of Alphabet saw a 4.5% decline on Monday amidst a broader downturn in tech stocks, fueled by recession concerns. Google’s advertising business, which comprised 77% of Alphabet’s total sales in 2023, has been the cornerstone of its revenue stream.
Alphabet responded to the ruling with plans to appeal. In a statement, the company said, “This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available.” The company’s defense centers on the quality of its search engine and the argument that making it the default option benefits consumers.
The ruling has been lauded by government officials. U.S. Attorney General Merrick Garland described it as “a historic win for the American people,” emphasizing that “no company – no matter how large or influential – is above the law.” White House press secretary Karine Jean-Pierre echoed this sentiment, calling the decision “a victory for the American people” and asserting that “Americans deserve an internet that is free, fair, and open for competition.”
Judge Mehta pointed out that in 2021 alone, Google spent $26.3 billion to maintain its default status on smartphones and browsers. He described this default positioning as “extremely valuable real estate,” noting that any potential competitor would need to offer comparable payments and compensation to device manufacturers to secure similar agreements, a barrier that effectively locks out new entrants from the market.
This ruling is a green light for aggressive antitrust enforcement against Big Tech, a sector under scrutiny from all political quarters. As the legal proceedings continue, the outcome could reshape not only Google’s operations but also the broader tech industry’s approach to competition and market fairness.
