the staff of the Ridgewood blog
Ridgewood NJ, in a seismic decision that could shake up the internet and hobble one of the world’s best-known companies, a judge ruled on Monday that Google’s search engine has been illegally exploiting its dominance to squash competition and stifle innovation.
Landmark Ruling Against Google
U.S. District Judge Amit Mehta’s ruling comes nearly a year after the start of a trial that saw the U.S. Justice Department take on Google in the biggest antitrust showdown in a quarter century. The highly anticipated decision was made after reviewing extensive evidence, including testimony from top executives at Google, Microsoft, and Apple during a 10-week trial last year. Judge Mehta issued his potentially market-shifting decision three months after the two sides presented their closing arguments in early May.
“After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly,” Mehta wrote in his 277-page ruling. He pointed to Google’s overwhelming market share as evidence of its monopoly, with the search giant holding an 89.2% share of the general search services market, increasing to 94.9% on mobile devices.
Implications for Google and Its Parent Company
This decision represents a major setback for Google and its parent, Alphabet Inc., which had argued that its popularity stemmed from consumers’ overwhelming preference for a superior search engine. Google’s search engine processes an estimated 8.5 billion queries per day worldwide, nearly doubling its daily volume from 12 years ago, according to a recent study by the investment firm BOND.
Kent Walker, Google’s president of global affairs, announced that the company intends to appeal Mehta’s findings. “This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available,” Walker said.
Antitrust Regulators Vindicated
The decision is a significant victory for the Justice Department, which filed its lawsuit nearly four years ago during the Trump administration. Attorney General Merrick Garland hailed the ruling as a historic win for the American people, emphasizing that no company is above the law. “The Justice Department will continue to vigorously enforce our antitrust laws,” Garland said.
Allegations and Evidence
The case depicted Google as a technological bully that has systematically thwarted competition to protect its search engine, the centerpiece of a digital advertising machine that generated nearly $240 billion in revenue last year. Justice Department lawyers argued that Google’s monopoly enabled it to charge advertisers artificially high prices while also enjoying the luxury of not having to invest more time and money into improving the quality of its search engine, ultimately hurting consumers.
Mehta’s ruling highlighted the billions of dollars Google spends annually to install its search engine as the default option on new cellphones and tech gadgets. In 2021 alone, Google spent more than $26 billion to secure these default agreements.
Google countered these allegations by noting that consumers have historically changed search engines when dissatisfied, citing Yahoo’s fall from dominance in the 1990s as an example. However, Mehta pointed to evidence showing the importance of default settings, noting that Microsoft’s Bing search engine holds an 80% market share on the Microsoft Edge browser, demonstrating that other search engines can succeed if not overshadowed by Google’s default presence.
Future Implications and Potential Remedies
Mehta’s conclusion that Google has been running an illegal monopoly sets the stage for another legal phase to determine what changes or penalties should be imposed to restore a more competitive landscape. A hearing is scheduled for September 6 to begin this process. The potential outcomes could range from requiring Google to dismantle parts of its internet empire to preventing it from securing default search agreements on popular devices.
The decision against Google could also benefit Microsoft, which faced a similar antitrust battle in the late 1990s. Just as Microsoft’s legal struggles opened opportunities for Google, this ruling could provide a boost to Microsoft, which now has a market value of over $3 trillion.
Broader Context and Future Legal Battles
Google faces several other legal challenges both in the U.S. and abroad. In September, a federal trial is scheduled to begin in Virginia over the Justice Department’s allegations that Google’s advertising technology constitutes an illegal monopoly.
The Justice Department’s antitrust division has recently targeted other major companies, including Apple, Ticketmaster, Live Nation Entertainment, Microsoft, Nvidia, and OpenAI. The Biden administration has secured victories in blocking several high-profile mergers but has also faced setbacks in the sugar and healthcare industries.
The appeals process in Google’s case could delay any immediate effects for both consumers and advertisers, potentially taking as long as five years. Nonetheless, this landmark ruling marks a significant step in the ongoing efforts to rein in Big Tech’s power and promote competition in the digital age.
Take the Wall Street Walking Tour https://www.facebook.com/unofficialwallstreet #WallStreetTours,#FinancialDistrictExploration, #ExploreWallStreet, #FinancialHistoryTour, #StockMarketExperience, #FinancialDistrictDiscovery, #NYCFinanceTour,#WallStreetAdventure
I switched to DuckDuckGo years ago and canceled my Google account. Everybody should just drop them.