A landmark ruling has hit Google hard, with a US judge declaring that the tech giant acted illegally to crush its competition and maintain a monopoly in online search and related advertising. The decision, issued on Monday, is a significant setback for Alphabet, Google's parent company, and could lead to major changes in how technology giants operate.
Background of the Case
The US Department of Justice (DOJ) sued Google in 2020, accusing the company of controlling approximately 90% of the online search market. This lawsuit is one of several filed against major tech companies as US antitrust authorities seek to enhance competition within the industry.
The case against Google was described at times as an existential threat to the company due to its dominance in search and online advertising. This ruling comes after a 10-week trial in Washington DC, where prosecutors argued that Google's dominance resulted from paying billions annually to secure its position as the default search engine on various platforms.
The Ruling
US District Judge Amit Mehta's decision is a comprehensive 277-page document that describes Google as a "monopolist" that used its power to preserve its market dominance. Judge Mehta found that Google had engaged in anti-competitive practices, including paying over $10 billion a year to be the default search engine for devices and browsers made by companies like Apple, Samsung, and Mozilla. This strategy allowed Google to maintain a dominant position by ensuring it had a steady stream of user data and preventing other companies from competing effectively.
The ruling criticized Google’s tactics as being designed to stifle competition and maintain its monopoly. Judge Mehta's decision could lead to severe penalties, although the specifics will be determined in a future hearing. The government has requested "structural relief," which might include breaking up Google or other significant changes to its business practices.
Reactions
Alphabet plans to appeal the ruling, arguing that it misunderstands the nature of their business. In a statement, the company claimed that their search engine’s success is due to its quality and that their investments are aimed at enhancing the user experience. Google’s lawyer, John Schmidtlein, argued during the trial that Google’s success is a result of its superior service and that the company still faces significant competition from other search engines and specialized apps.
On the other hand, US Attorney General Merrick Garland praised the ruling as a "historic win for the American people." Garland emphasized that no company, regardless of its size or influence, is above the law. He stated that the DOJ will continue to rigorously enforce antitrust laws to ensure fair competition.
The ruling comes amid a broader effort by US regulators to tackle what they see as monopolistic practices in the tech industry. Other major tech companies, including Meta Platforms (owner of Facebook), Amazon, and Apple, are also facing antitrust scrutiny.
In addition to this case, Google is facing another trial related to its advertising technology, scheduled for September. The company has already been fined billions in Europe for similar issues related to market dominance.
