A federal judge has ruled Google holds a monopoly on general search services and text ads, according to a case that concluded on August 5. The case will proceed with this ruling regarding Google’s liability as a monopolist, but the subsequent steps have yet to be determined.
“The court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly,” wrote Judge Amit Mehta in the court ruling. “It has violated Section 2 of the Sherman Act.”
This case is a continuation of an antitrust investigation begun by the U.S. Department of Justice and state attorneys general in 2020, alleging Google “has unlawfully used the distribution agreements to thwart competition.” This was argued back and forth in court until May 2024.
Google search stifles some competition, court rules
Specifically, Google creates monopoly conditions in general search services and general search text ads. Google does not create monopoly conditions in search advertising or general search advertising, which are handled separately, because, as the court ruling reads, Google either lacks power in the product market or a product market does not exist for that business. (General search services, text ads, search advertising and general search advertising were all assessed separately, depending on their product markets or lack thereof and other factors.)
The relationship between Google and Apple was placed under particular scrutiny.
“Most users access a general search engine through a browser (like Apple’s Safari) or a search widget that comes preloaded on a mobile device,” Mehta wrote. “Those search access points are preset with a ‘default’ search engine. The default is extremely valuable real estate.”
Advertising on Search makes up the bulk of Google’s revenue — $26 billion in 2020, according to the court ruling.
“This landmark decision holds Google accountable,” wrote Assistant Attorney General Jonathan Kanter in a statement from the Department of Justice on August 5. “It paves the path for innovation for generations to come and protects access to information for all Americans.”
Google maintains its dominance comes from the quality of the search results.
“This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available,” an anonymous Google spokesperson said in a statement to Reuters.
SEE: Google added the AI-powered Lens, Tab compare, and history search to Chrome on browsers last week.
What happens next?
Regarding Google products, future court cases building on this precedent could potentially lead to Google Search being broken off from its parent organization, Alphabet, or some business functions being curtailed. However, Google plans to try to appeal the ruling before that happens, according to Reuters.
The case adds a wrinkle to Google and Microsoft’s AI rivalry
The case could shake up the competition between Microsoft and Google, especially in AI products, as Bing is the distant second-place competitor to Google search. Microsoft has been trying to boost Bing’s popularity by adding AI-generated answers.
“The integration of generative AI is perhaps the clearest example of competition advancing search quality,” Mehta wrote.
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