By Chase Smith
In a landmark legal decision, a federal judge ruled that Google violated antitrust laws by maintaining its monopoly power in the markets for general search services and general search text advertisements.
The ruling, issued on Aug. 5 by Judge Amit Mehta, concludes a lengthy legal battle initiated by the U.S. Department of Justice and a coalition of state attorneys general.
“After having carefully considered and weighed the witness testimony and evidence, the court reached the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly. It has violated Section 2 of the Sherman Act,” Mehta’s decision stated.
The case against Google, filed in October 2020, alleged that the tech giant engaged in anti-competitive practices by establishing exclusive agreements with browser developers, mobile device manufacturers, and wireless carriers.
These agreements prohibited partners from pre-installing rival search engines, leading most U.S. devices to come preloaded exclusively with Google, forcing competitors to find alternative ways to reach users.
In 2021, Google paid over $26 billion in “revenue share” agreements, based on advertising revenue generated from these default placements.
The court said Google’s conduct allowed the company to charge “supracompetitive prices for general search text ads,” enabling it to earn substantial monopoly profits.
Despite Google’s arguments that its practices were pro-competitive and justified by the quality of its services, the court found these justifications insufficient.
Google has not yet announced whether it will appeal the decision, but the ruling could prompt significant changes in how the company conducts its business.
In recent years, antitrust lawsuits have also been filed against other big-tech companies Amazon, Meta, and Apple.
The court is expected to impose measures to restore competitive conditions in the affected markets.
Closing arguments in the case were presented in early May, about three years after the legal action was initiated in the U.S. District Court for the District of Columbia.
DOJ prosecutor David Dahlquist argued that Google’s pricing, despite potential quality declines, was characteristic of a monopolist’s behavior.
Meanwhile, Google’s attorney, John Schmidtlein, highlighted the company’s continuous innovation and competition with tech giants like Meta and TikTok.
A major point of contention was whether Google’s market position allowed it to dominate through default search engine agreements, which shared ad revenue with partners like Apple.
A University of Chicago professor said at the time that Google shared 36 percent of its search revenue with Apple for the Safari browser.
Schmidtlein contended that the DOJ’s evidence was anecdotal, lacking quantitative analysis, but Dahlquist maintained that Google’s own data showed significant price increases without losing revenue, indicating a monopolistic advantage.
This case is seen as the most significant antitrust trial of the century and could lead to major changes in Google’s business practices.
The ruling suggests the possibility of structural relief as a remedy, involving changes to Google’s business operations, such as altering or terminating exclusive agreements that make Google’s search engine the default option.
While the court ruling does not specify breaking up the company, potential remedies will be determined in subsequent proceedings.
Google has been reached out to for comment.
Sam Dorman contributed to this report.
