Google is a ‘monopolist’ that violated antitrust laws, court finds

In a landmark decision, a US District Court on Monday ruled that Google is a monopoly that used its dominance in the online search market to suppress other search engines and keep them from gaining market share.

“By 2020, it was nearly 90% [of the search market], and even higher on mobile devices at almost 95%” US District Judge Amit Mehta wrote in his 277-page opinion. “The second-place search engine, Microsoft’s Bing, sees roughly 6% of all search queries — 84% fewer than Google. Google has not achieved market dominance by happenstance.

“Google is a monopolist, and it has acted as one to maintain its monopoly,” Mehta added.

 

The decision by the US District Court for the District of Columbia said Google’s dominance has gone unchallenged for well over a decade — allowing it to grow even stronger at the expense of its competitors.

Google Search is parent-company Alphabet’s oldest and most profitable business. A Google spokesperson said the company plans to appeal the decision.

Ken Walker, Google’s president of Global Affairs, said the court’s decision both “recognizes that Google offers the best search engine,” but it also restrains the company from making it easily available.

“We appreciate the Court’s finding that Google is ‘the industry’s highest quality search engine…, particularly on mobile devices’,” Walker said in an email to Computerworld. “Given this, and that people are increasingly looking for information in more and more ways, we plan to appeal.  As this process continues, we will remain focused on making products that people find helpful and easy to use.”

After a lengthy trial last fall, the court found Google has spent tens of billions of dollars on exclusive contracts to secure a dominant role as the default search engine for web browsers and mobile devices. The court even used a competitive analysis performed by Google itself in 2020 to illustrate the point; that study estimated it would cost Google competitor Apple $20 billion to create a similar product that could compete with Google search.

Other rivals, such as Microsoft Bing and Duckduckgo.com, suffer the same inability to compete — and as Google’s revenue has grown, so has its ability to continue locking its competition out.

“In 2014, Google booked nearly $47 billion in advertising revenue. By 2021, that number had increased more than three-fold to over $146 billion. Bing, by comparison, generated only a fraction of that amount — less than $12 billion in 2022,” Mehta wrote.

While Mehta didn’t offer a solution to the monopoly Google has built, the court’s decision will likely affect other lawsuits against the company and change the way its search engine works in the future. If it prevails through the appeals process, the ruling is also likely open the door to Google’s competition to grow their own business and search engine market base.

Google’s court woes are far from over with the Monday ruling. A second lawsuit by the Department of Justice brought by the Biden administration will challenge the company’s advertising technology business.

The DOJ complaint has alleged that Google monopolizes advertising and uses technologies to eliminate or severely diminish any threat to its advertising dominance. That case is expected to head to trial in early September.

After the ruling was made public, Attorney General Merrick Garland weighed in with a statement: “This victory against Google is an historic win for the American people,” said Garland. “No company — no matter how large or influential — is above the law. The Justice Department will continue to vigorously enforce our antitrust laws.”

“This landmark decision holds Google accountable,” said Assistant Attorney General Jonathan Kanter. “It paves the path for innovation for generations to come and protects access to information for all Americans.”

The Court’s desicion also referenced what it called “specialized vertical providers,” such as Amazon, DoorDash, Expedia, and Yelp as Google competitors for shopping and food queries.

A Yelp spokesperson said in an email to Computerworld that the historic decision “clearly found that Google willfully used illegal means to monopolize the online search market.

“While we are still reviewing the ruling, it validates what Yelp’s CEO and co-founder Jeremy Stoppelman has said for more than a decade, ‘When one company controls the market, it ultimately controls consumer choice.’ If competition really were just ‘one click away,’ as Google suggests, why have they invested so heavily to be the default choice on web browsers and mobile phones? Clearly they are not taking any chances.”

(Stoppelman was deposed in the US vs. Google case.)

Any remedy for “Google’s misconduct” should require the company to stop its exclusionary conduct and instead compete based on the merits of its products, Yelp’s spokesperson said.

“Additionally, there must be serious consideration of requiring Google to spin off services that have been artificially boosted by its illegal search monopoly, which harms consumers and businesses,” he said. “We applaud Judge Mehta’s watershed ruling and the important work of the US Department of Justice and state attorneys general to vigorously address anticompetitive practices.”