In a landmark decision, U.S. District Judge Amit Mehta has confirmed what many have long suspected: Google’s overwhelming dominance in online search is the result of intentional, illegal monopolistic practices.
In his August 5 ruling, Judge Mehta declared, “Google is a monopolist, and it has acted as one to maintain its monopoly,” violating the Sherman Antitrust Act of 1890. This historic law, championed by President Theodore Roosevelt over a century ago, was designed to break up monopolies and trusts that sought to control the American economy.
Judge Mehta’s decision comes after a protracted legal battle initiated by the Justice Department and 11 states in October 2020, which was later joined by 38 additional states. The trial, which began three years later and spanned nine weeks, involved extensive testimony and a vast array of evidence.
In his ruling, Judge Mehta emphasized the transformative impact of general search engines: “Information that once took hours or days to acquire can now be found in an instant on the internet with the help of a general search engine,” highlighting how Google’s dominance has revolutionized information access.
Google’s profits, largely driven by digital advertising, underscore its market control. For instance, when users search for terms like “running shoes,” advertisers compete in real-time auctions for ad placement on Google’s search results page, which directs users straight to the seller’s website. As Judge Mehta noted, Google’s advertising revenue soared from nearly $47 billion in 2014 to over $146 billion by 2021. In contrast, Microsoft’s Bing, its closest competitor, held just a 6% market share and generated less than $12 billion in 2022.
Google’s market dominance extends to an estimated 90% share in general search services, with an even higher percentage on mobile devices. Judge Mehta identified that Google achieved this status through strategic distribution agreements, paying substantial sums—$26 billion in 2021 alone—to secure default search placements with browser developers, mobile manufacturers, and wireless carriers. These agreements often prevent the installation of competing search engines on devices, reinforcing Google’s market supremacy.
The Justice Department and states have accused Google of using these agreements to stifle competition and sustain its monopoly in both search services and online advertising markets. Judge Mehta concurred, finding that Google’s exclusive distribution deals create significant anticompetitive barriers and lack valid procompetitive justifications. The judge concluded that Google has charged “supracompetitive prices” for search ads, akin to the pricing power Ma Bell wielded before its breakup in 1982.
While Judge Mehta’s ruling confirms violations of Section 2 of the Sherman Act, detailing Google’s monopoly in search and advertising, the remedy for this antitrust breach remains undecided. Future actions could range from restricting Google’s exclusive agreements to potentially breaking up the company, similar to the dismantling of AT&T and the settlement with Microsoft over anticompetitive practices.
The potential breakup of Google could spur renewed competition, lower advertising costs, and provide consumers with more choices in search engines. Additionally, increased competition might mitigate concerns about Google’s alleged political bias and control over information flow.
As we approach a new era of antitrust enforcement, this decision echoes President Roosevelt’s vision of a “Square Deal,” aiming to curb monopolistic practices and ensure a competitive marketplace. The breakup of Google’s monopoly could mark the beginning of significant changes in how major tech platforms operate and influence our economy and information landscape.
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