The much-anticipated decision marks a significant victory for federal regulators trying to rein in the power of Big Tech and could send shock waves through the tech world. Other firms, including Apple, Meta and Amazon, also face federal antitrust lawsuits.
“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,” U.S. District Judge Amit Mehta wrote in his opinion.
The ruling did not include a remedy for Google’s conduct.
Kent Walker, president of Google Global Affairs, said in a statement that the company plans to appeal.
“This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available,” he said. “As this process continues, we will remain focused on making products that people find helpful and easy to use.”
Regulators alleged that Google maintained a monopoly on web searches by reaching agreements with browser developers, phone manufacturers and wireless carriers to pre-load their products with the Google search engine as the default.
By agreeing to partner with Google, the companies receive a portion of the advertising revenue Google generates through the search process, the ruling said.
In 2021, Google paid out a total of $26.3 billion in revenue share under its contracts with browser developers Apple and Mozilla, major manufacturers of Android devices such as Samsung and Motorola, and U.S. wireless carriers including AT&T and Verizon, according to the ruling.
That amount was Google’s greatest expense that year, the ruling said. That same year, Google earned more than $146 billion in advertising revenue, according to the ruling.
“These distribution deals have forced Google’s rivals to find other ways to reach users,” the ruling said.
The Mountain View-based subsidiary of Alphabet Inc. has increasingly cornered the market for web searching. In 2009, 80% of U.S. web searches went through Google. By 2020, that figure was nearly 90%, according to the ruling. Almost 95% of mobile searches used Google.
Google’s next closest competitor — Microsoft’s Bing — took up just 6% of web searches, the ruling said.
This dominance of the search market caught the attention of antitrust regulators, and by 2020, the U.S. Department of Justice and multiple state attorneys general had filed two separate lawsuits against the tech giant.
During the course of legal proceedings, dozens of witnesses were deposed, including high-ranking tech executives. The bench trial started in September 2023 and lasted for nine weeks. Closing arguments occurred in May.
It’s not yet clear what the ruling will mean for Google, particularly since the company plans to appeal and there will be further proceedings about potential remedies.
“We’re still in the middle of the game, as opposed to the end of the game,” said Colin Kass, a partner in the litigation department at Proskauer and co-head of the firm’s antitrust group.
But if the ruling stands, it could force Google to revisit how it does deals with outside companies for the opportunity to be the default search engine, said Jef Pearlman, clinical professor of law and director of the intellectual property and technology law clinic at the USC Gould School of Law.
“If it stands, this will limit their current approach,” he said.
The ruling is less likely to have an effect on the other pending tech federal antitrust cases, mostly because the Google case focues so narrowly on the market for web searches, which is not relevant to the other lawsuits, legal experts said.
But it could serve as a warning for artificial intelligence companies, which are starting to make deals with outside companies to use their technology and could run into similar issues as Google did with its default search engine agreements.
Though the AI market is still nascent, “they will be thinking of this as they pen those deals,” Pearlman said.
© 2024 Los Angeles Times. Distributed by Tribune Content Agency, LLC.
