 "A US District judge has ruled that Google is a monopolist that has used its deep pockets to ensure its market dominance and stifled its competitors. File image")
US District Judge Amit Mehta on Monday (August 5) ruled that Google’s search engine has been illegally exploiting its dominant position to stifle competition and hinder innovation.
Judge Mehta’s ruling comes after a nearly year-long trial, initiated by the U.S. Justice Department, marking the biggest antitrust case in the US in 25 years. The landmark decisionis likely to have significant implications for the internet giant.
Here’s a look at the decision, and how Google maintained its monopoly.
‘Google is a monopolist’
The trial featured testimonies from top executives at Google, Microsoft, and Apple, with the judge reviewing extensive evidence over a 10-week period.
“After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly," Judge Mehta wrote in his 277-page decision.
The judge pointed to Google’s overwhelming market share, which stands at 89.2 per cent for general search services and rises to 94.9 per cent on mobile devices, as clear evidence of its monopoly.
How Google maintained monopoly
Google’s strategy included spending billions annually to ensure its search engine remains the default option on new cellphones and tech gadgets.
In 2021 alone, Google spent more than $26 billion on these default agreements, a practice that Mehta concluded reinforced its monopoly. The judge noted that Microsoft’s Bing holds an 80 per cent market share on the Microsoft Edge browser. That, he said, illustrated that other search engines can succeed if not overshadowed by Google’s default status.
Impact Shorts
More ShortsThe ruling is a significant setback for Google and its parent company, Alphabet Inc., which has defended its search engine’s popularity as a result of consumer preference.
Potential impacts
Moving forward, the court will determine the necessary changes or penalties to address Google’s anticompetitive practices and restore a more competitive market. A hearing scheduled for September 6 will set the stage for these discussions.
Possible outcomes range from dismantling parts of Google’s internet empire to restricting its ability to secure default search agreements on devices.
Kent Walker, Google’s president of global affairs, announced that the company plans to appeal the decision, arguing that it unfairly penalises Google for its success. “This decision recognises that Google offers the best search engine but concludes that we shouldn’t be allowed to make it easily available,” Walker said.
The appeals process, which could extend for up to five years, will delay any immediate changes, according to Evelyn Mitchell-Wolf.
The decision opens the door for class-action lawsuits against Google, citing monopolistic pricing practices. It may benefit competitors like Microsoft, whose own dominance was curtailed by a similar antitrust case in the 1990s. Restrictions on Google’s default search deals could also affect Apple, which has significantly benefited from Google’s payments, estimated at $20 billion in 2022 alone.
With inputs from AP