A US federal judge has ruled that Google spent billions of dollars on exclusive deals to maintain an illegal monopoly on search, in a landmark win for the US department of justice (DoJ) as it seeks to rein in Big Tech’s market power.
Amit Mehta, the judge who presided over the case in the District of Columbia, called Google a “monopolist” in a 286-page decision on Monday that found the company had violated US antitrust law.
The ruling follows a weeks-long trial in which the DoJ argued the search giant paid tens of billions of dollars for anticompetitive deals with wireless carriers, browser developers and device manufacturers. These payments totalled more than $26 billion (€23.7 billion) in 2021, according to the decision.
Google, whose name has become synonymous with online search, argued that it did face fierce competition in the sector and its success was driven by the quality of its products.
The ruling in the 2020 lawsuit – brought by the department of justice along with 52 US states and territories – can be appealed. Google and the DoJ did not immediately respond to a request for comment.
The proceedings will now enter a second phase in which the court will determine what remedies Google needs to take. The DoJ has not yet indicated what penalties it would seek, but it may focus on curbing Google’s ability to strike the deals at issue in the case.
The decision is the biggest win against Big Tech by US antitrust enforcers in decades.
They have filed a series of big cases striking at the core of Big Tech’s power in recent years – the US DoJ has sued Apple and has a second case pending against Google, accusing it of allegedly exercising monopolistic control of the digital advertising market. The second Google trial is set to begin next month.
The US Federal Trade Commission has also filed lawsuits against Amazon and Meta.
Google’s years-long agreement with Apple to make it the default search engine on the iPhone has long drawn scrutiny. Unsealed court documents showed that Google paid Apple $20 billion in 2022 alone. This would amount to a substantial portion of Apple’s $85 billion-a-year services business, which includes its App Store and Apple Pay. Apple, which is not a defendant in the case, did not immediately respond to a request for comment.
Also at issue in the case were contracts the tech giant reached over the years with browser developer Mozilla, Android smartphone makers Samsung, Motorola and Sony, and wireless carriers AT&T, Verizon and T-Mobile.
Google’s “distribution agreements foreclose a substantial portion of the general search services market and impair rivals’ opportunities to compete”, the judge said in the ruling.
In one victory for Google, the judge found that it did not have monopoly power in the search advertising market as plaintiffs had alleged.
The judge separately faulted the company for “the lengths to which Google goes to avoid creating a paper trail for regulators and litigants”, but stopped short of penalising it for the behaviour, reasoning that it was not necessary to find Google guilty. The judge noted that his decision “should not be understood as condoning Google’s failure to preserve chat evidence”.
Shares of Google parent Alphabet were down more than 4 per cent on Monday amid a broad sell-off in US markets. – Copyright The Financial Times Limited 2024
