US Court Rules Against Google: Billions for Illegal Monopoly

A U.S. federal judge has ruled that Google spent billions on exclusive deals to maintain an illegal search engine monopoly.

8/6/2024, 9:11 AM
Eulerpool News Aug 6, 2024, 9:11 AM

A US federal judge has ruled that Google maintained an illegal monopoly in the search engine market by spending billions on exclusive agreements. This landmark decision by Judge Amit Mehta in Washington D.C. represents a significant victory for the Department of Justice (DoJ), which is taking action against the market power of major technology companies.

In his 286-page decision, Mehta referred to Google as a "monopolist" and found that the company had violated US antitrust law. The decision was preceded by weeks of trial in which the DoJ argued that the search engine giant had paid billions for anticompetitive agreements with mobile carriers, browser developers, and device manufacturers. In 2021 alone, these payments amounted to more than $26 billion.

Google, whose name has become almost synonymous with online search, defended itself with the argument that it is exposed to strong competition in the sector and its success is due to the quality of its products.

The lawsuit, filed in 2020 by the DOJ and 52 US states and territories, may be contested by Google. Neither Google nor the DOJ have responded to requests for comments so far.

Now the process will enter a second phase, in which the court will determine what measures Google must take. The DoJ has not yet indicated what penalties it will seek, but may focus on restricting Google's ability to close the deals in question.

This decision is the biggest success of the US antitrust watchdogs against Big Tech in decades. In recent years, a number of major cases have been filed against the market power of large technology companies. The DoJ has sued Apple and is conducting another case against Google, accusing the company of monopolistically controlling the digital advertising market. This second Google trial is set to begin next month. The Federal Trade Commission has also filed lawsuits against Amazon and Meta.

Google's years-long agreement with Apple to be the default search engine on the iPhone has long been under scrutiny. Court documents revealed that Google paid Apple $20 billion in 2022 alone. This constitutes a significant portion of Apple's annual service business, which totals $85 billion and includes the App Store and Apple Pay. Apple, which is not accused in this case, has so far not responded to requests for comment.

The heading can be translated to English as:
"Also the subject of the proceedings were contracts that Google had concluded over the years with browser developer Mozilla, Android smartphone manufacturers Samsung, Motorola, and Sony, as well as mobile network operators AT&T, Verizon, and T-Mobile. In his ruling, Mehta stated that Google's 'distribution agreements close off a significant portion of the market for general search services and impair the competitive opportunities of rivals.'

In one aspect, Google was able to score a victory: Mehta found that the company did not hold monopolistic power in the search advertising market as claimed by the plaintiffs. However, the judge criticized the company for its efforts to leave no traces for regulatory authorities and plaintiffs, but did not impose any penalties as this was not necessary to find Google guilty. Mehta emphasized that his decision "should not be understood as an endorsement of Google's failure to preserve chat evidence.

The shares of Google's parent company Alphabet fell by more than 4 percent on Monday amid a broad sell-off in the US markets.

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