‘Google is a monopolist’ - judge rules in landmark anti-trust case

The US Government argued that by paying billions of dollars to be the automatic search engine on consumer devices, Google had prevented rivals from competing. Photo / Jason Henry for the New York Times

Google acted illegally to maintain a monopoly in online searching, a United States federal judge ruled today NZT, a decision that strikes at the power of Big Tech companies and that may fundamentally alter the way they do business.

District Court Judge Amit Mehta for the District of Columbia said Google had abused a monopoly.

The US Justice Department and states had sued Google, accusing it of illegally cementing its dominance, in part, by paying other companies, such as Apple and Samsung, billions of dollars a year to have Google automatically handle search queries on their smartphones and web browsers.

“Google is a monopolist, and it has acted as one to maintain its monopoly,” Mehta said in his ruling.

The ruling is the most significant victory to date for US regulators trying to rein in the power of tech giants in the internet era. It is likely to influence other government anti-trust lawsuits against Google, Apple, Amazon, and Meta, the owner of Facebook, Instagram and WhatsApp.

What now?

The ruling did not include remedies for Google’s behaviour. Mehta will now decide that, potentially forcing the company to change the way it runs or to sell off part of its business.

The ruling capped a years-long case — US et al vs Google — that resulted in a 10-week trial last year. The department and states sued in 2020 over Google’s dominance in online searching, which generates billions in profits annually. The department said Google’s search engine conducted nearly 90% of web searches, a number the company disputed.

The company spends billions of dollars annually to be the automatic search engine on browsers such as Apple’s Safari and Mozilla’s Firefox. Google paid Apple about US$18 billion ($30b) for being the default in 2021, the New York Times reported.

During the trial, Microsoft chief executive Satya Nadella testified that he was concerned that his competitor’s dominance had created a “Google web” and that its relationship with Apple was “oligopolistic”.

If Google was able to continue undeterred, it was likely to become dominant in the race to develop artificial intelligence, he said.

Google chief executive Sundar Pichai countered in his testimony that Google created a better service for consumers.

Users choose to search on Google because they find it useful, and the company has continued to invest to make it better, the company’s lawyers said.

“Google is winning because it’s better,” John Schmidtlein, Google’s lead courtroom lawyer, said during closing arguments, which were held months later, in May.

The US Government argued that by paying billions of dollars to be the automatic search engine on consumer devices, Google had denied its competitors the opportunity to build the scale required to compete with its search engine.

Instead, Google collected more data about consumers that it used to make its search engine better and more dominant.

The Government also accused Google of protecting a monopoly over the ads that run inside search results.

Government lawyers said Google had raised the price of ads beyond the rates that should exist in a free market, which they argued was a sign of the company’s power. Search ads provide billions of dollars in annual revenue for Google.

During closing arguments, Mehta grilled the lawyers about factual statements and asked them to explain how their cases squared with legal precedent.

“The importance and significance of this case is not lost on me, not only for Google but for the public,” he said.

Written by: David McCabe

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