Federal Judge: Google Is a Monopoly

Judge Amit Mehta of the U.S. District Court for the District of Columbia ruled today that Google violated the Sherman Act by buying access to browsers and devices and making it virtually impossible to bypass its search engine.

“Google is a monopoly and acts like a monopoly to maintain its monopoly,” Justice Mehta wrote in his judgment. A 286-page ruling“This violated Section 2 of the Sherman Act.”

The decision in the first major monopoly case in 25 years is a major victory for the Justice Department’s Antitrust Division and reinforces the Biden administration’s aggressive antitrust policy. It shows that, in fact, law enforcement officials who argued that the U.S. economy was entering a new era of strength and consolidation were right.

The ruling has significant implications for future events in the tech industry, as companies that dominated the era of Web 2.0 platforms work to do the same with artificial intelligence. It could also affect other cases currently pending against Facebook, Amazon and Apple.

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Specifically, Judge Mehta found that Google’s practice of paying for access to be the default search engine led to its dominance, which amounted to nearly 90 percent of all search queries in 2020 and nearly 95 percent of all search queries on mobile devices. By becoming the default browser, Google raised the costs of competing with other search engines to impractical levels.

Mehta wasn’t convinced by the argument that “competition is just a click away” and that users can easily change their default settings to use a different browser. “About 50 percent of all general search queries in the United States go through a search access point covered by one of the disputed agreements,” he wrote, referring to special deals in which Google pays browser or device companies to make them the default option. “Another 20 percent of all general search queries in the United States go through the Chrome browser that users download, which defaults to Google.”

It’s a clear ruling about Google’s dominance over search, but there are some caveats. Mehta was unconvinced by the plaintiffs’ small argument, mostly from state attorneys general, that Google had used its monopoly over search to control the back-end digital advertising supply chain and distort the market. Mehta ruled narrowly that because Google had market power over search, it could charge “supracompetitive” rates to place text ads on its search pages. But the states were more ambitious, arguing that Google controlled ad tech markets through SA360 and used it anticompetitively to effectively exclude Microsoft’s Bing from its closed system.

That could prove to be a difficult hurdle to overcome in a separate antitrust case the Justice Department filed in 2023 against Google that seeks to monopolize ad technology. Mehta argued that the Justice Department failed to clearly define the relevant market for search ads, and therefore Google cannot be held liable for abusing its monopoly in that regard. The Justice Department will likely need to better define the market in the ad technology case, which is set to go to trial this fall before a different judge in the Eastern District of Virginia.

The Google search case will now move to the remedies phase. Judge Mehta will have to determine how much punishment should be imposed for Google’s exclusivity in adding its search engine as the default on browsers and devices. He could invalidate the agreements that cost Google $26 billion in 2021. He could require browsers and devices to let users choose which search engine to use. Or he could break up Google in some way.

Google will almost certainly appeal the decision.