A federal judge has ruled that Google violated U.S. antitrust law by illegally maintaining monopolies in the markets for general search services and general search text advertising.
Judge Amit P. Mehta of the U.S. District Court for the District of Columbia, ruling in a case brought against Google by the Justice Department, said that Google had abused its monopoly power over the search business in part by paying companies to present its search engine as the default choice on their devices and web browsers.
Judge Mehta wrote in his opinion filed Monday:
“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.”
The court found that Google abused its dominant position in several ways:
- Paying hefty sums to ensure default status on devices and browsers
- Leveraging user data to reinforce its search engine’s dominance
- Illegally protecting its monopoly over search-related advertising
Key Findings Of Anticompetitive Behavior
The judge found that Google’s agreements with Apple, Mozilla, and Android partners foreclosed about 50% of the search market and 45% of the search advertising market from rivals.
These exclusive distribution agreements deprived competitors like Microsoft’s Bing of the scale needed to compete with Google in search and search advertising.
Judge Mehta concluded that Google’s conduct had anticompetitive effects:
- Foreclosing a substantial share of the market
- Depriving rivals of scale needed to compete
- Reducing incentives for rivals to invest and innovate in search
The case began in 2020 and culminated in a 10-week trial last fall.
Financial Revelations
The trial disclosed financial details of Google’s default search agreements.
In 2022, Google paid Apple $20 billion for default search placement on iOS devices, an increase from $18 billion in 2021.
Additionally, Google shares 36% of Safari’s search ad revenue with Apple.
These figures highlight the value of default search positioning in the industry.
Google’s Defense & Market Share
Throughout the trial, Google maintained that its market dominance resulted from superior product quality rather than anticompetitive practices.
The company disputed the DOJ’s estimate that it held a 90% share of the search market, arguing for a broader definition of its competitive landscape.
However, Judge Mehta rejected this defense:
“Google has thwarted true competition by foreclosing its rivals from the most effective channels of search distribution.”
Ruling On Search Advertising
On search advertising, the judge found Google could charge supra-competitive prices for text ads without rivals’ constraints.
However, the judge ruled in Google’s favor on some claims, finding Google doesn’t have monopoly power in the broader search advertising market.
Potential Ramifications
While Judge Mehta has yet to determine specific remedies, the ruling opens the door to potentially far-reaching consequences for Google’s business model. Possible outcomes could include:
- Forced changes to Google’s search operations
- Divestiture of specific business segments
- Restrictions on default search agreements
The decision is likely to face appeals, and the final resolution may evolve, as seen in the Microsoft antitrust case of the 1990s.
Broader Context
This ruling sets a precedent that could influence other ongoing antitrust cases against tech giants like Amazon, Apple, and Meta.
It signals a shift in how century-old antitrust laws are applied to modern digital markets.
What’s Next
Google is expected to appeal the decision, potentially leading to a protracted legal battle that could shape the future of online search and digital advertising.
Google faces a new antitrust trial on September 9th over ad tech. The DOJ will sue Google in Virginia federal court, alleging ******* monopolization of the digital ads market.
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Source link : Searchenginejournal.com
