London, August 06, 2024, The Europe Today: According to the NHC, a U.S. judge ruled that Google violated antitrust law by spending billions of dollars to create an illegal monopoly and become the world’s default search engine. This marks the first significant victory for federal authorities challenging Big Tech’s market dominance.
The ruling sets the stage for a second trial to determine potential remedies, which could include a breakup of Google parent Alphabet. Such a move would dramatically alter the landscape of the online advertising industry, where Google has held sway for years.
U.S. District Judge Amit Mehta of Washington, D.C., wrote, “The court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly.” Google currently controls about 90% of the online search market and 95% of the market on smartphones.
The “remedy” phase is expected to be lengthy, potentially followed by appeals to the U.S. Court of Appeals for the District of Columbia Circuit and the U.S. Supreme Court. The legal proceedings could extend into next year or even 2026.
Alphabet’s shares fell 4.5% on Monday amid a broader decline in tech stocks, driven by recession fears. Google advertising accounted for 77% of Alphabet’s total sales in 2023.
Alphabet announced plans to appeal Mehta’s ruling. In a statement, Google said, “This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available.”
U.S. Attorney General Merrick Garland hailed the ruling as “a historic win for the American people,” emphasizing that “no company—no matter how large or influential—is above the law.” White House press secretary Karine Jean-Pierre also lauded the “pro-competition ruling,” calling it a victory for the American public and advocating for a free, fair, and open internet.
Judge Mehta highlighted that Google paid $26.3 billion in 2021 to ensure its search engine remained the default on smartphones and browsers, thereby maintaining its market dominance. “The default is extremely valuable real estate,” Mehta noted. He added that even a quality competitor would need to pay billions to secure these default positions and compensate partners for any revenue shortfalls.
Mehta further stated, “Google, of course, recognizes that losing defaults would dramatically impact its bottom line. For instance, Google has projected that losing the Safari default would result in a significant drop in queries and billions of dollars in lost revenues.”
This ruling is the first major decision in a series of cases challenging alleged monopolies in Big Tech. The case, initiated by the Trump administration, was heard from September to November of last year.
“A forced divestiture of the search business would sever Alphabet from its largest source of revenue. But even losing its capacity to strike exclusive default agreements could be detrimental for Google,” said Evelyn Mitchell-Wolf, a senior analyst at Emarketer. She noted that a prolonged legal process would delay any immediate effects for consumers.
