US Court Rules Google Is A Monopolist Engaged In Illegal Practices To Maintain Search Engine Stranglehold. So What Next

Google engaged in illegal activity by exploiting its search-engine stranglehold to thwart competition, a US federal judge ruled on Monday in a landmark judgment that could reshape the multi-billion-dollar search market and holds profound implications for the wider tech industry

“Google is a monopolist, and it has acted as one to maintain its monopoly,” U.S. District Judge Amit P. Mehta wrote in his 276-page decision 

Google, which currently performs about 90% of the world’s internet searches, exploited its market dominance to crush competitors, Judge Mehta said in his ruling.

The Department Of Justice (DoJ), joined by 38 other states, had sued Google, accusing it of illegally sustaining its dominance, in part, by paying device makers and browser developers billions of dollars a year to ensure that its search engine is positioned to automatically handle search queries on their products.

The DoJ has another case against Google, concerning its advertising business, which is due to start next month. The lawsuit alleges that Google has built a monopoly over online advertising, stating that its dominance forces companies to use its technology and stifles competition.

The last time U.S. government officials sued a corporation over monopolistic practices was in the early 2000s when the DOJ accused Microsoft of exploiting the web browser market with Internet Explorer.

Details Of The Judgment

Judge Mehta ruled that Google violated antitrust laws by striking exclusive agreements with device makers like Apple, Samsung etc and paid billions of dollars to ensure that its product was the default search engine on their phones and tablets. 

Judge Mehta noted that Google had paid $26.3 billion in 2021 alone to ensure that its search engine is the default on smartphones and browsers and to keep its dominant market share.

“The default is extremely valuable real estate,” Mehta wrote. “Even if a new entrant were positioned from a quality standpoint to bid for the default when an agreement expires, such a firm could compete only if it were prepared to pay partners upwards of billions of dollars in revenue share and make them whole for any revenue shortfalls resulting from the change.” Justice Mehta wrote in his ruling.

“Google, of course, recognises that losing defaults would dramatically impact its bottom line. For instance, Google has projected that losing the Safari default would result in a significant drop in queries and billions of dollars in lost revenues,” he further added.

What Could Happen Next

Judge Mehta did not provide any immediate remedial measures to be undertaken by the tech behemoth to end its 'illegal monopolisation' of the internet search industry. He is likely to hold a separate trial to address this.

While measures like enforcing forced divestiture of the search business (Alphabet's largest source of revenue) is unlikely, the courts may direct Google to stop making payments for the right to be the default search engine on platforms like the iPhone.

Google will likely appeal the ruling to the U.S. District Court of Appeal for the D.C. Circuit.

Kent Walker, president of global affairs at Google parent Alphabet, said the company planned to appeal the ruling.

“This decision recognises that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available,” he said in a written statement that quoted complimentary passages from Judge Mehta’s decision. “As this process continues, we will remain focused on making products that people find helpful and easy to use.”