In a landmark ruling, Federal Judge Amit Mehta has determined that Google violated U.S. antitrust laws by maintaining a monopoly in the search and advertising markets. Judge Mehta stated, “After carefully considering and weighing the witness testimony and evidence, the court concludes: Google is a monopolist, and it has acted to maintain its monopoly,” finding that Google violated Section 2 of the Sherman Act.
This decision marks a significant victory for the Department of Justice, which accused Google of illegally dominating the online search market. While this ruling establishes Google’s liability, it does not yet address the remedies, leaving the implications for Google’s business uncertain. However, the judge did not agree with all of the government’s claims, rejecting the argument that Google holds monopoly power in a specific segment of the advertising market. He agreed that Google has a monopoly on general search services and general search text advertising.
This ruling is the first in a series of tech monopoly cases initiated by the U.S. government in recent years. It follows two decades after the Department of Justice’s antitrust lawsuit against Microsoft, with the case against Google being filed in 2020. Since then, similar cases have been brought against Amazon, Apple, and Meta. Additionally, Google will face another DOJ challenge this fall concerning its advertising technology business. Judge Mehta’s decision could influence how other judges interpret antitrust laws in the context of modern digital markets.
The ruling follows a 10-week trial held last fall in the D.C. District Court, culminating in two days of closing arguments in early May. The trial involved key figures from Silicon Valley, including Google CEO Sundar Pichai, Microsoft CEO Satya Nadella, and Apple executive Eddy Cue. The DOJ argued that Google illegally monopolized the general search advertising market by cutting off rivals’ distribution channels through exclusionary contracts. Examples include deals with browser makers like Mozilla and phone manufacturers like Apple and Samsung to make Google’s search engine the default on their products. Google also requires some apps to have default status as a condition for phone makers using its Android operating system to access the Play Store.
Meta described Google’s dominance in general search as “remarkably durable,” with its market share increasing from about 80% in 2009 to 90% by 2020. Judge Mehta noted that genuine competition in the general search market has not been evident through typical indicators like fluid market shares or new entrants.
Throughout the trial, Google contended that it has not engaged in anti-competitive practices and that its large market share results from offering a superior product that consumers prefer. Google argued that its search business competes with a broader range of platforms than the government suggested, including those where search is significant even if they don’t index the web, like Amazon.
A key revelation during the trial was the extent of Google’s payments to Apple to secure the default search engine spot on iPhone browsers. An expert witness disclosed that Google shares 36% of search ad revenue from Safari with Apple, amounting to $20 billion in payments to Apple for the default position in 2022, according to Apple’s Cue.
During closing arguments, Judge Mehta questioned these payments, asking, “If that’s what it takes for somebody to dislodge Google as the default search engine, wouldn’t the folks that wrote the Sherman Act be concerned about it?”
The next antitrust trial between the DOJ and Google is set to begin on September 9th in Virginia.
