A federal judge found Monday that Google’s search business constitutes an illegal monopoly, a landmark ruling and major victory for the Biden administration as it seeks to curb Big Tech. The decision is likely to bring big changes to the Internet — and send a signal that no company is too big to control.
US District Judge Amit Mehta found that “Google is a monopolist, and it has acted to maintain its monopoly.” It involves defending its dominance in the search engine market; Mehta specifically focused on the fact that Google has signed deals with companies including Apple to be the default search engine on their devices. Google currently enjoys about 90 percent share overall and about 95 percent share in mobile devices
Google has vowed to appeal the ruling, which it framed as an effort to make it harder for consumers to access a search engine of their choice. The appeals process could take years to complete, and Judge Mehta has yet to impose a specific penalty against Google, which will be decided after a hearing in September.
While it is true that many consumers prefer Google over any currently available alternative, if the ruling stands, it may allow a competitor to create a better product, and one that has a real chance of entering the market. And that could mean more search options for consumers.
“If the door is locked, you can’t get consumers,” said Fiona Scott Morton, a professor at the Yale School of Management and former chief economist of the Justice Department’s Antitrust Division. “The door is no longer locked. The door is open [to] There’s a whole industry of innovators who have good ideas, and then we’ll see a shift in competition.”
What the Google Antitrust Ruling Means for Companies, the Internet, and Consumers
The impact of the lawsuit, which was initially brought under the Trump administration, is not yet entirely clear. Much of this may depend on exactly how Mehta decides to punish Google and how difficult that punishment makes doing business. In terms of weighting penalties, Mehta said it would have to meaningfully penalize Google while minimizing any negative impact on consumers — and that’s a “real problem.” Herbert Hovenkampis an antitrust scholar at the University of Pennsylvania Carey Law School.
Perhaps the most likely remedy would be to force Google to pull out of any agreements that allow device makers to offer Google as the default search engine for a certain amount of money. But this may have minimal immediate impact on Google: Those manufacturers may still decide to make Google their default search engine, but without paying Google for the privilege.
“Apple will finish what it’s already doing,” Hovenkamp said. “And that may be true for many device manufacturers.”
But if a better search engine eventually comes along — say, powered by AI, improved security and privacy standards, or a different way to show ads — then device makers don’t have to stick with Google. Fundamentally, such competition should encourage innovation, which is good for consumers.
Scott Morton says that Google is currently the best search engine in part because almost everyone uses it and it has a monopoly on different device operating systems, creating a “self-perpetuating circle”. Its user base gives it a large amount of data and reliable revenue opportunities that it can use to cover development, marketing and acquisition costs that help it maintain its edge.
“Once you break through, we don’t know what can happen,” he said. “It can be very exciting.”
What the ruling means for other big tech companies
In addition to its implications for the future of the Internet, the ruling could affect the way other big tech companies do business.
“What this suggests is that if you’ve got a dominant product, you have to be very careful to make sure your licensing and contractual agreements are open, because monopolizing them can be dangerous,” Hovenkamp said. This means there may be more caution around partnerships between companies.
Google’s ruling could also serve as a template for future antitrust cases, Hovenkamp said. But it’s unclear how predictive the case will be for other pending antitrust cases the Biden administration has filed against big tech companies. It has several in process:
- It accused Apple of monopolizing the US market for smartphones, including the iPhone maker 65 percent. The complaint alleges that Apple intentionally failed to develop apps, products and services that would make it easier for users to switch from the iPhone to other smartphones and lower costs for consumers and developers.
- It is the second time Google has sued Google over the company’s advertising business, which it claims has been dominated by anti-competitive mergers and powerful publishers and advertisers.
- it was Accused Meta Acquiring Instagram and WhatsApp to prevent competition and prevent consumers from accessing other social media platforms. A federal judge initially dismissed the case, ruling that the government had failed to establish the market in which Meta had a monopoly before allowing the administration to reschedule.
- it was Accused Amazon Preventing its sellers from offering lower prices on other online platforms and prioritizing its products over third-party products, keeping prices artificially high and quality low.
Scott Morton says each of these cases is different in content and has precedent from the Google case, which relied on a ruling against Microsoft for its anticompetitive practices in the late 90s to maintain its monopoly in the PC market.
“Google’s behavior was very similar to Microsoft’s behavior, and that similarity allowed the Department of Justice to show the judge that this behavior did indeed fit the same pattern and therefore should be treated similarly, as invalidated,” he said.
So the Google case cannot serve as a precedent for existing cases against other big tech companies. But it has contributed to a significant vibe change in terms of how technology companies can expect to be regulated.
“What difference does temperature change make,” Scott Morton said of the impact of governance on Silicon Valley. “These companies are not very big. We’ve enforced the law on them, and we’ve found that — even though they’re American, even though they’re innovative and spend money on R&D, even though they have executives who look good in suits — they can still be found responsible.”
