Google violates antitrust law with search engine, federal court rules

A federal judge has ruled that Google has a monopoly on general search services and text ads, according to a case that concluded Aug. 5. The case will continue after the ruling on Google’s liability as a monopoly, but the next steps have not yet been determined.

“The Court concludes that Google is a monopoly and has acted like a monopoly to maintain its monopoly,” wrote Judge Amit Mehta in the court’s ruling. “It violated Section 2 of the Sherman Act.”

The case is a continuation of an antitrust investigation launched by the U.S. Department of Justice and state attorneys general in 2020 that accused Google of “illegally using distribution agreements to thwart competition.” The case was set to be litigated until May 2024.

Google Search Engine Suppresses Some Competition, Court Rules

Specifically, Google creates monopoly conditions in its general search services and general search text ads. Google does not create monopoly conditions in its search ads or general search ads, which are treated separately because, as the court ruled, Google either does not have product market power or a product market does not exist for that activity. (The general search services, text ads, search ads, and general search ads were assessed separately, depending on their product markets or lack thereof and other factors.)

Particular attention was paid to the relationship between Google and Apple.

“Most users access their general search engine through a browser (such as Apple’s Safari) or a search widget that comes preloaded on their mobile device,” Mehta wrote. “These search access points are pre-set to the ‘default’ search engine. The default search engine is incredibly valuable real estate.”

Search ads make up the majority of Google’s revenue — $26 billion in 2020, according to a court ruling.

“This landmark decision holds Google accountable,” Deputy Attorney General Jonathan Kanter said in a Justice Department statement Aug. 5. “It paves the way for innovation for generations to come and protects access to information for all Americans.”

Google maintains that its dominant position is based on the quality of its search results.

“This decision recognizes that Google offers the best search engine, but says we shouldn’t be able to easily share it,” an anonymous Google spokesperson said in a statement to Reuters.

SEE: Google last week added AI-powered Lens, tab comparison, and history search features to Chrome browsers.

What happens next?

As for Google products, future lawsuits based on this precedent could potentially lead to Google Search being separated from its parent organization Alphabet or having some of its business functions curtailed. However, Google plans to try to appeal the ruling before that happens, according to Reuters.

The case further complicates Google and Microsoft’s rivalry in artificial intelligence

The case could shake up the competition between Microsoft and Google, especially in AI products, since Bing is a distant second to Google’s search engine. Microsoft is trying to boost Bing’s popularity by adding AI-generated answers.

“The integration of generative AI is perhaps the clearest example of competition improving the quality of search,” Mehta wrote.