Google lost an antitrust case for implying its monopoly power in the search business by paying large companies to make its search engine the default choice. However, the company appeals this opinion. In this article we will know about this issue in-depth and also what has the company decided.
Google lost an antitrust case over the search
Where all started
In 2020, the Justice Department, joined by eleven state Attorneys General, filed a civil antitrust lawsuit against Google in the U.S. District Court for the District of Columbia. It aimed to stop Google from illegally maintaining monopolies through anticompetitive and exclusionary practices in the search and search advertising markets and to address the resulting competitive harms.
In September 2023, the trial for this case officially started in court, which was expected to be a lengthy process. After months of hurdles, on Monday the judge of the U.S. District Court for the District of Columbia Amit P. Mehta ruled against Google for this act.
Mehta said Google abused its monopoly power over the search business partly by paying companies, like Apple, to ensure Google’s search engine was the default choice on their devices and web browsers.
Google’s market hold over search
Google controls roughly 90% of the online search market and 95% of smartphones searches. The ruling said it paid over $26 billion in 2021 alone to ensure that its search engine was the default on smartphones and browsers and to keep its dominant market share. According to The New Times, about $18 billion of that amount went to Apple alone.
That’s Massive! And what more? it shares 36% of search and revenue from Safari with Apple.
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 opinion filed Monday.
He further adds that it has violated Section 2 of the Sherman Act. (Section 2 of the Sherman Act prohibits individuals or businesses from monopolizing, attempting to monopolize, or conspiring to monopolize any segment of trade or commerce.)
Google will appeal the ruling
However, Alphabet (Google’s parent company) intends to challenge the court’s decision. This appeal could extend the legal battle into next year or even as far as 2026. The current ruling sets the stage for a second trial to address potential remedies. These could include significant changes, such as breaking up Alphabet, which could alter the online advertising industry where Google has had a dominant presence.
Alphabet’s stock dropped by 4.5% on Monday. This decrease happened because tech stocks generally fell, and the overall stock market went down due to concerns about a possible recession.
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What will the antitrust case result in?
The recent court decision supports and encourages U.S. antitrust regulators to take a more forceful approach against major tech companies. The ruling gives these regulators more authority and momentum to go after big tech firms like Google.
But if Alphabet’s appeal succeeds, the current monopolistic practices might continue, stifling competition and innovation. If the second trial results in a breakup, the complex process could create uncertainty and disruption in the online advertising market, potentially impacting users and businesses negatively. The extended legal conflicts may also divert focus from addressing broader issues in the tech industry.
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