WASHINGTON (AP) — A judge ruled Monday that Google’s ubiquitous search engine illegally abused its dominance to stifle competition and stifle innovation, a seismic decision that could shake up the Internet and leave one of the world’s best-known companies could hinder.
The long-awaited ruling by US District Judge Amit Mehta comes almost a year after the start of a lawsuit in which the US Department of Justice is fighting Google in the United States. biggest antitrust showdown in a quarter century.
After reviewing reams of evidence, including testimony from top executives at Google, Microsoft and Apple during last year’s 10-week trial, Mehta made his potentially market-changing decision three months after the two sides presented their positions. their closing arguments in early May.
“After carefully considering and weighing the testimony and evidence, the court reaches the following conclusion: Google is a monopolist and has acted as such to maintain its monopoly,” Mehta wrote in his 277-page ruling. He said Google’s dominance in the search market is proof of its monopoly.
Google “has an 89.2% market share for general search services, which increases to 94.9% on mobile devices,” the ruling said.
It marks 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 up things online. Google’s search engine processes an estimated 8.5 billion searches worldwide per day, nearly doubling the daily volume compared to 12 years ago. a recent study released by the investment company BOND.
Kent Walker, Google’s president of global affairs, said the company plans to appeal Mehta’s findings.
“This decision recognizes that Google offers the best search engine, but concludes that we should not make it easily available,” Walker said.
For now, the decision vindicates antitrust regulators at the Justice Department, which filed its lawsuit nearly four years ago when Donald Trump was still president and has escalated its efforts to rein in Big Tech’s power during President Joe Biden’s administration .
“This victory against Google is a historic victory for the American people,” said Attorney General Merrick Garland. “No company – no matter how large or influential – is above the law. The Department of Justice will continue to vigorously enforce our antitrust laws.”
The case portrayed Google as a technological bully that has methodically thwarted competition to protect a search engine that has become 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 the company 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 lax approach that harmed consumers.
Mehta’s ruling focused on the billions of dollars Google spends every year to install its search engine as a default option on new mobile phones and tech gadgets. In 2021 alone, Google spent more than $26 billion to secure these standard agreements, Mehta said in his ruling.
Google ridiculed these accusations, noting that consumers have historically changed search engines when they became disillusioned with the results they were getting. For example, Yahoo was the most popular search engine in the 1990s, before Google came along.
Mehta said the evidence at trial showed the importance of the default settings. He noted that Microsoft’s Bing search engine has 80% 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 a predetermined default option.
Yet Mehta also cited the quality of Google’s product as a key part of its dominance, saying bluntly that “Google is widely recognized as the best (general search engine) available in the United States.”
The Consumer Choice Center, a lobbying group that has opposed other efforts to rein in companies, blasted Mehta’s decision as a step in the wrong direction. “The United States is drifting toward the anti-tech stance of the European Union, a part of the world that earns next to nothing and punishes successful American companies for their popularity,” said Yael Ossowski, deputy director of the center.
Mehta’s conclusion that Google has an illegal monopoly marks a new legal phase in determining what types of changes or penalties should be imposed to undo the damage done and restore a more competitive landscape. He scheduled a hearing for September 6 to clear the way for the next phase.
The possible outcome could result in a sweeping injunction requiring Google to dismantle some of the pillars of its Internet empire, or prevent Google from paying to have its search engine automatically answer queries on iPhone and other devices. Or the judge could conclude that only modest changes are needed to create a level playing field.
“Google losing in its search antitrust lawsuit could be a big deal depending on the resolution,” said Evelyn Mitchell-Wolf, senior analyst at Emarketer.
Either way, she added, a lengthy appeals process will delay the immediate impact on both consumers and advertisers.
The appeals process could take as long as five years, predicted George Hay, a law professor at Cornell University and chief economist at the Justice Department’s antitrust division for most of the 1970s. That lengthy process will allow Google to stave off the likelihood that Mehta will ban standard search matches, Hay said, but it likely won’t protect the company from class-action lawsuits citing the judge’s findings that advertisers were saddled with monopolistic pricing.
If there is a significant shake-up, it could turn into a coup for Microsoft, whose own power was undermined in the late 1990s when the Justice Department attacked the software maker in an antitrust case, accusing it of abusing the dominance of its Windows operating system. on personal computers to eliminate competition.
That Microsoft thing mirrored the one brought against Google in different ways and now the result could also sound the same way. Just as Microsoft’s crushing antitrust battle created distractions and obstacles that opened more opportunities for Google after its founding in 1998, the decision against Google could be a boon for Microsoft, which already has a market value of more than $3 trillion. Alphabet was once worth more than Microsoft, but now trails its rival, with a market value of about $2 trillion.
If Mehta decides to limit or ban Google’s standard search offerings, it could also hurt Apple’s profits. Although portions of his decision have been redacted to protect confidential business information, Mehta noted that Google will have paid Apple an estimated $20 billion in 2022, double the amount in 2020. The judge also noted that Apple has occasionally considered to develop its own search technology, but decided not to do so after an investigation. According to a 2018 analysis, the company would lose more than $12 billion in revenue in the first five years after the split with Google.
Google’s payments have helped Apple’s steadily growing services division, which generated $85 billion in revenue in the last fiscal year. Apple did not immediately respond to a request for comment.
The Justice Department’s antitrust division recently acquired some of the largest companies in the world. In March, Apple sued Apple and inside May announced a major lawsuit against Ticketmaster and its owner, Live Nation Entertainment. Antitrust enforcers have also opened investigations to the roles that Microsoft, Nvidia and OpenAI have played in the rise of artificial intelligence.
The Biden administration has won some big cases, including blocking mergers some of the largest publishers in the world as well as JetBlue Airways and Spirit Airlines. It has also had some notable setbacks, including in the sugar And healthcare industries.
Google is facing several other legal threats both in the US and abroad. A federal trial will begin in Virginia in September over the Justice Department’s allegations that Google’s advertising technology constitutes an illegal monopoly.
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Liedtke reported from San Ramon, California. Associated Press writers Alanna Durkin Richer and Barbara Ortutay contributed to this report.
