How do you spell monopoly according to a US federal judge? You spell it G-o-o-g-l-e.
US District Judge Amit Mehta’s ruling took direct aim at Google’s online search business—the business technology that Google did so much better than everyone else and turned into a verb synonymous with looking something up on the internet, either for yourself or someone else, company, or data.
He wrote in his opinion, “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.”
But Google got so much bad publicity that the founders invented a holding company called Alphabet, which absorbed Google and all those other ideas it was investigating—more advanced search, driverless cars, and more.
But Alphabet is essentially Google—search and the advertising that goes with it.
Google has spent tens of billions of dollars on exclusive contracts to secure a dominant position as the world’s default search provider on smartphones and web browsers (such as Apple).
For example, in May, documents released in the case said US reports indicated Google was paying Apple more than US$1 billion a month, according to the US government, and as much as US$20 billion in total in 2022—just for the privilege of being Apple’s primary search engine on all its devices.
The case ended in May after 10 weeks and was mostly heard in private because of the commercial sensitivity of the information. In fact, the US government started the case back in 2020, when Donald Trump was president.
But according to the Justice Department, those contracts have given it the scale to block would-be rivals such as Microsoft’s Bing, Mozilla’s Firefox, or anyone else with a search idea.
According to Mehta, that powerful position has led to anticompetitive behavior that must be stopped.
Specifically, Google’s exclusive deals with Apple and other key players in the mobile ecosystem were anticompetitive, Mehta said. Google has also charged high prices in search advertising that reflect its monopoly power in search.
Those contracts have long meant that when users want to find information, Google is generally the easiest and quickest platform to go to, which in turn has fueled Google’s massive online advertising business.
While Mehta did not find that Google has a monopoly in search ads, the broader part of the opinion represents the first major decision in a string of US-government-led competition lawsuits targeting Big Tech.
This case in particular has been described as the biggest tech antitrust case since the US government’s antitrust showdown with Microsoft at the turn of the century.
This case is distinct from a separate antitrust suit brought by the Biden administration against Google last year that is related to the company’s advertising technology business. That case is expected to head to trial in early September.
US analysts point out that this decision is the second high-profile antitrust defeat for Google after a federal jury in California in December found that Google runs an illegal monopoly with its proprietary app store. The court in that case is still deliberating possible remedies. Remedies in this case will come later this year.
CNN pointed out that the “ruling could also be a bellwether for other major tech antitrust cases, including against Apple and Amazon.”
“Both Amazon and Apple have called the antitrust lawsuits filed against them ‘wrong on the facts and the law.’ It could also boost the Justice Department’s antitrust lawsuit against Live Nation, the parent of Ticketmaster, Moss said, given how central exclusivity deals are to that lawsuit.”