In a US Antitrust Case, the Judge Has Ruled That Google “Is a Monopolist”

The first major victory for federal authorities challenging Big Tech's market dominance came on Monday when a U.S. judge determined that Google broke antitrust laws by spending billions of dollars to establish an illegal monopoly and become the default search engine worldwide.

A second trial might be held to evaluate possible remedies, such as the dissolution of Alphabet (GOOGL.O), Google's parent company, which would alter the internet advertising landscape that Google has controlled for many years (opens a new tab).

Also, it gives the go-ahead for the United States antitrust enforcers to crack down on Big Tech, a sector that has received criticism from all sides of the political aisle.

The court has concluded that Google is a monopolist and has behaved in a monopolistic manner to preserve its monopoly, according to U.S. District Judge Amit Mehta of the Washington, D.C., court. Nearly 90% of all web searches and 95% of all smartphone searches are controlled by Google.

Google’s Take Against the Ruling

Despite Mehta's decision, Alphabet intends to appeal. "This decision recognises that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available," according to a statement from Google.

Attorney General Garland praised the decision, saying it was "a historic win for the American people," and that "no company - no matter how large or influential - is above the law."

With the "pro-competition ruling being a victory for the American people," White House press secretary Karine Jean-Pierre proclaimed, "Americans deserve an internet that is free, fair, and open for competition."

Spending Billions to Be a Frontrunner

To maintain its strong market dominance and make its search engine the default on smartphones and browsers, Google spent $26.3 billion in 2021 alone, as pointed out by Mehta.

"The default is extremely valuable real estate," Mehta described in the paper he wrote. "Even if a new entrant were positioned from a quality standpoint to bid for the default when an agreement expires, such a firm could compete only if it were prepared to pay partners upwards of billions of dollars in revenue share and make them whole for any revenue shortfalls resulting from the change."

The loss of defaults would have a devastating effect on Google's financial line, he continued. As an example, Google has calculated that if Safari were to no longer be the default browser, it would lead to an enormous drop in search volume and a loss of billions of dollars in income.

This decision marks a watershed moment in a string of lawsuits challenging purported monopolies in the technology sector. The Trump administration took this matter up with a judge from September through November of last year.

Google’s Third-Party Cookie Phaseout and Its Impact

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StartupTalkyTripti Agarwal