Judge Amit Mehta ruled in favor of the Department of Justice, writing that Google has maintained a monopoly in the search and advertising markets.
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A federal judge ruled that Google violated US antitrust law by maintaining a monopoly in the search and advertising markets.
“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,” the court’s ruling, which you can read in full at the bottom of this story, reads. “It has violated Section 2 of the Sherman Act.”
Judge Amit Mehta’s decision represents a major victory for the Department of Justice, which accused Google of illegally monopolizing the online search market. It’s not yet clear what specifically this will mean for the future of Google’s business, as this initial finding is only about Google’s liability, not about remedies.
The decision is the first in a wave of tech monopoly cases brought by the US government in recent years. While two decades passed between the Department of Justices’ antitrust lawsuit against Microsoft and its next tech anti-monopoly case against Google, filed in 2020, several more such cases quickly followed. Amazon, Apple, and Meta all now face their own monopolization lawsuits from the US government, and Google will go to trial against the DOJ a second time this fall over a separate challenge of its advertising technology business. That makes Mehta’s decision in this case even more consequential for how other judges may consider how to apply century-old antitrust laws to modern digital markets.
Mehta oversaw a 10-week trial in the Google search case last fall, which culminated in two days of closing arguments in early May. The trial, which took place in DC District Court, convened many big players in 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 effectively cutting off key distribution channels for rivals through exclusionary contracts. For example, Google has deals with browser makers like Mozilla and phone manufacturers like Apple and Samsung to make their search engine the default on their products. Google also makes default status for some of its apps a condition of access to the Play Store for phone-makers using its Android operating system.
Google argued throughout the trial that it has not acted anticompetitively and that its large market share is a result of creating a superior product that consumers enjoy. It contended that the Google search business should be compared to a much larger range of peers than the government proposed in its market definition, suggesting it competes directly with other platforms where search is a big part of the business, even if they don’t index the web (such as Amazon).
One of the most significant revelations from the case was the size of Google’s payments to Apple to secure the default search engine spot on iPhone browsers. An expert witness for Google let slip that the company shares 36 percent of search ad revenue from Safari with Apple. In 2022, Google paid Apple $20 billion for the default position, according to Apple’s Cue.
During closing arguments, Mehta homed in on those payments, wondering how other players in the market could possibly displace Google from that position. Since only a company with enough capital to offer Apple a comparable or better deal and the ability to create a quality search engine with limited user data could stand a chance, Mehta asked, “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.
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