A federal judge has ruled that Google has a monopoly on general search services and text ads, according to a case that concluded on August 5. The case will move forward with this ruling regarding Google’s liability as a monopoly, but the next steps are yet to be determined.
“The Court concludes this: Google is a monopolist, and it has acted like a monopolist to maintain its monopoly,” Justice Amit Mehta wrote in the court’s decision. “It has violated Section 2 of the Sherman Act.”
The case is part of an antitrust investigation launched in 2020 by the US Justice Department and state attorneys general, alleging that Google “illegally used distribution agreements to thwart competition.” It remains in court until May 2024.
Google Search stifles some competition, court rules
Specifically, Google creates a monopoly position in general search services and general search text ads. Google does not create a monopoly position in search advertising or general search advertising, which are handled differently because, as the Court’s decision states, Google either lacks product market power or no product market exists for that business. (General search services, text advertising, search advertising, and general search advertising were all evaluated separately, depending on their product markets or lack thereof and other factors.)
The relationship between Google and Apple was placed under particular scrutiny.
“Most users access common search engines through a browser (such as Apple’s Safari) or a preloaded search widget on a mobile device,” Mehta wrote. “Those search access points are preset with a ‘default’ search engine. The default is extremely valuable real estate.”
According to the court decision, advertising on search generates the bulk of Google’s revenue – in 2020 it was $26 billion.
“This landmark decision holds Google accountable,” Assistant Attorney General Jonathan Kanter wrote in a statement on behalf of the Justice Department on August 5. “It paves the way for innovation for generations to come and protects access to information for all Americans.”
Google believes that its dominance is due to the quality of its search results.
An unnamed Google spokesperson said in a statement to Reuters, “This decision recognizes that Google is the best search engine, but it concludes that we should not be allowed to make it as freely available as possible.”
See: Google added AI-powered Lens, tab comparison, and history search to the Chrome browser last week.
what happens next?
With regard to Google products, future court cases based on this precedent could result in Google Search being separated from its parent organization, Alphabet, or a reduction in certain business functions. However, according to Reuters, Google plans to appeal the decision before this happens.
This case has brought a new twist to the AI rivalry between Google and Microsoft
The case could shake up the competition between Microsoft and Google, especially in AI products, as Bing is second only to Google Search. Microsoft is trying to increase Bing’s popularity by adding AI-generated answers.
“The integration of generative AI is perhaps the most obvious example of competition driving search quality forward,” Mehta wrote.
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