Google is a monopolist. That’s the verdict of a District Judge in their summing up of an antitrust action brought by the US Justice Department against its parent company Alphabet Inc.
If upheld after the inevitable appeal, the decision could have a seismic impact on the future of online search and advertising and pose a further threat to the stranglehold held by Google.
While the penalties facing Google and Alphabet are yet to be decided – a process that could take months, or even years, to resolve – the plaintiff has suggested that it may pursue a full-scale breaking up of the search giant’s structure.
Monopoly or Market Dominance?
Almost a year after the action was initially brought, District Judge Amit Mehta delivered the lengthy ruling on Monday that included the headline judgment: “Google is a monopolist, and it has acted as one to maintain its monopoly.”
Specifically, it is the company’s dogged pursuit to be the default search engine on web browsers and new smartphones that has landed it in hot water.
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Mehta cited, for example, the $26 billion that Google spent on agreements in 2021 to safeguard its default presence as the de facto search engine on such devices and browsers.
He referred to this as “extremely valuable real estate”, meaning that the abuse of its monopoly unfairly impedes competing search engines such as Microsoft’s Bing.
“This victory against Google is an historic win for the American people. No company – no matter how large or influential – is above the law. The Justice Department will continue to vigorously enforce our antitrust laws.” Merrick Garland, United States Attorney General
What Next for Google?
Unsurprisingly, representatives from Alphabet have already stated an intention to appeal the court’s decision, expressing that it is the quality of the product – rather than unlawful actions – that has resulted in its 89.2% market share of search engine usage.
In a response to the ruling from the company’s President of Global Affairs, Kent Walker, said: “This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available.”
The appeal process will not be one that is quickly resolved. But in addition to any penalties eventually decided, it is understood that the US government will also bid for “structural relief” of the company, potentially leading to a break up of the company’s operations.
Googlewhacked
This is the latest in a growing list of successful actions taken against Google and Alphabet. And it isn’t the first time that they have fallen foul of antitrust litigation, with the European Commission fining them €1.49 billion in 2019 for abusive online practices.
More recently, Google settled a lawsuit in relation to Chrome’s “incognito” mode. It was alleged that it was covertly tracking user data while they browsed, with an a potential settlement value of between $5 billion and $8 billion.
And in February this year, Google agreed to pay $350 million in a data privacy class action lawsuit, which resulted from the tech giant accidentally exposing user data following a software malfunction.
