Google is currently 0-2 in antitrust trials. U.S. District Judge Amit Mehta ruled on Monday that Google illegally maintained its dominance in search by using anticompetitive agreements to prevent rivals from gaining traction. And without fear of pressure from competitors, Google has been able to charge whatever it wants for search ads, he said.
“The trial evidence established beyond doubt that Google’s monopoly power, sustained by its exclusive distribution agreements, has allowed Google to raise text advertising prices without any meaningful competitive constraints,” Mehta wrote in the 286-page ruling. “The unrestrained price increases have fueled Google’s significant revenue growth and allowed it to maintain remarkably high and stable operating profits.”
His findings are arguably the most comprehensive modern examination of Google’s search business, which over the past 26 years has grown into a $175 billion annual revenue behemoth that accounts for the bulk of parent company Alphabet’s profits. Google will appeal, as it risks losing its preeminent position on the iPhone and other portals on the web.
Kent Walker, Google’s president of global affairs, said in a statement that the company would appeal the ruling because “the company acknowledges that Google provides the best search engine, but concludes that we should not be allowed to provide it easily.”
US Attorney General Merrick Garland called the decision “a historic victory”. Assistant Attorney General Jonathan Kanter said the decision “paves the way for innovation for future generations”.
The following judgment a trial lasting several weeks Mehta’s trial in Washington, DC last year, in which the U.S. Justice Department alleged that Google had become the world’s most used search engine by paying partners like Apple and Samsung to promote it on their devices and software. Google attributed its success to providing the best service and argued that it faced significant competition from the likes of Microsoft and others.
Mehta sided with Google on some issues but rejected the company’s overall argument that it does not hold any illegal monopolies. Last year, a jury in federal court in San Francisco ruled that Google’s Play app store an illegal monopoly.
How Google will adjust its business in light of the rulings in San Francisco and Washington remains to be seen. Mehta will hold a separate trial to determine remedies in the search case, and a judge is weighing proposed penalties in the Play case. But some of the changes Google has made in response to antitrust scrutiny in recent years have been costly.
First challenge
The case against Mehta stems from increased scrutiny of the tech industry under President Donald Trump. The Justice Department sued Google in 2020 before Trump left office, and the case became the first of many lawsuits against big tech companies to go to trial.
Mehta ruled that Google, with about 90 percent of the market, had a monopoly in both general search and general search text advertising. He found that Google’s agreements with its partners harmed competition and that Google had failed to prove otherwise.
