Google loses major antitrust case over its search dominance

WASHINGTON (AP) — A judge ruled Monday that Google’s ubiquitous search engine has illegally exploited its dominance to crush competition and stifle innovation in a seismic decision that could shake the Internet and hurt one of the world’s best-known companies. world.

The long-awaited ruling issued by US District Judge Amit Mehta comes almost a year after the start of a trial pitting the US Department of Justice against Google in the country. biggest antitrust showdown in a quarter of a century.

After reviewing extensive evidence that included testimony from top executives at Google, Microsoft and Apple during last year’s 10-week trial, Mehta issued his potentially market-changing decision three months after both sides filed his closing arguments in early May.

“After carefully considering and weighing the testimony and evidence of witnesses, the court reaches the following conclusion: Google is a monopolist and acted as such to maintain its monopoly,” Mehta wrote in his 277-page decision.

This represents a major setback for Google and its parent company, Alphabet Inc., which had steadfastly argued that its popularity stemmed from consumers’ overwhelming desire to use a search engine so good at what it does that it has become synonymous with looking things up online. . Google’s search engine currently processes about 8.5 billion queries per day worldwide, nearly doubling its daily volume from 12 years ago, according to a recent study released by investment company BOND.

Google will almost certainly appeal the decision in a process that could reach the US. Supreme Court.

For now, the ruling vindicates antitrust regulators at the Justice Department, which filed its case nearly four years ago while Donald Trump was still president, and has been stepping up its efforts to rein in the power of Big Tech during President Joe Biden’s administration.

The case portrayed Google as a technology bully that methodically thwarted competition to protect a search engine that became the centerpiece of a digital advertising machine that generated nearly $240 billion in revenue last year. Justice Department lawyers argued that Google’s monopoly allowed it to charge advertisers artificially high prices while enjoying the luxury of not having to invest more time and money into improving the quality of its search engine – a negligent approach. that harmed consumers.

As expected, Mehta’s decision focused on the billions of dollars that Google spends every year to install its search engine as a default option on new cell phones and technology devices. In 2021 alone, Google spent more than $26 billion to secure these standard agreements, Mehta said in his ruling.

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Google ridiculed these claims, noting that consumers have historically switched search engines when they became disillusioned with the results they were getting. For example, Yahoo – now a smaller player on the internet – was the most popular search engine during the 1990s, before Google emerged.

Mehta said the evidence at trial showed the importance of default settings. He noted that Microsoft’s Bing search engine has an 80% share of the search market in the Microsoft Edge browser. The judge said this shows that other search engines can be successful if Google is not set as the default default option.

Still, Mehta also credited Google’s product quality as an important part of its dominance, saying categorically that “Google is widely recognized as the best (overall search engine) available in the United States.”

Mehta’s conclusion that Google has been running an illegal monopoly sets up another legal phase to determine what types of changes or penalties should be imposed to reverse the damage done and restore a more competitive landscape.

The potential outcome could result in a sweeping order that would require Google to dismantle some of the pillars of its Internet empire or stop it from shelling out billions annually to ensure that its search engine automatically responds to queries on the iPhone and other Internet-connected devices. . After the next phase, the judge may conclude that only modest changes are needed to level the playing field.

If there is a significant change, it could be a blow to Microsoft, whose power was undermined in the late 1990s when the Justice Department attacked the software maker in an antitrust case, accusing it of abusing dominance of its operating system. Windows. on personal computers to block competition.

This Microsoft case mirrored the one filed against Google in many ways and now the result could also echo in a similar way. Just as Microsoft’s bruising antitrust battle created distractions and obstacles that opened up more opportunities for Google after its creation in 1998, the ruling against Google could be a boon for Microsoft, which already has a market value of more than 3 billions of dollars. At one time, Alphabet was worth more than Microsoft, but is now behind its rival with a market value of around $2 billion.

In addition to boosting Microsoft’s Bing search engine, the result could harm Google at a crucial point that is tilting technology in the age of artificial intelligence. Both Microsoft and Google are among the early leaders in AI in a battle that could now be affected by Mehta’s market-shaking decision.

Microsoft CEO Satya Nadella was one of the Justice Department’s key witnesses during testimony that covered his frustration with Google’s deals with companies like Apple that have made it nearly impossible for search engine Bing to make any headway, even with Microsoft investing more than US$100 billion. improvements since 2009.

“You wake up in the morning, brush your teeth and Google it,” Nadella said at one point in his testimony. “Everyone talks about the open web, but there really is the Google web.”

Nadella also expressed fear that an antitrust crackdown would be necessary to ensure the situation didn’t get worse. as AI becomes a greater force in research.

“Despite my excitement that there is a new angle on AI, I am very afraid that this vicious cycle in which I am trapped could become even more vicious,” Nadella said in the statement.

Google still faces other legal threats beyond this, both in the US and abroad. any antitrust lawsuits filed against Google at home and abroad. In September, a federal trial is expected to begin in Virginia over the Justice Department’s allegations that Google’s advertising technology constitutes an illegal monopoly.