Google is now 0 for 2 in antitrust trials. United States District judge Amit Mehta ruled on Monday that Google has unlawfully maintained its dominance in search by using anticompetitive deals to keep 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 firmly established that Google’s monopoly power, maintained by the exclusive distribution agreements, has enabled Google to increase text ads prices without any meaningful competitive constraint,” Mehta wrote in a 286-page ruling. “Unconstrained price increases have fueled Google’s dramatic revenue growth and allowed it to maintain high and remarkably stable operating profits.”
His findings are arguably the most comprehensive modern examination of Google’s search business, which over the past 26 years has become a $175 billion annual revenue behemoth that accounts for much of parent company Alphabet’s profits. Google will appeal, as it risks losing its prominent placement on iPhones and other gateways to the web.
Kent Walker, Google’s president of global affairs, said in a statement that the company would fight the ruling because it “recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available.”
United States Attorney General Merrick Garland called the decision “an historic win.” Assistant Attorney General Jonathan Kanter said it “paves the path for innovation for generations to come.”
The ruling follows a weeks-long trial in Mehta’s courtroom last year in Washington, DC, in which the US Department of Justice alleged that Google had become the world’s most used search engine by paying partners such as Apple and Samsung to promote it on their devices and software. Google had 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 its overall argument that the company held no illegal monopoly whatsoever. Last year, a jury in federal court in San Francisco ruled Google’s Play app store an illegal monopolist.
The ways in which Google will have to adjust its business in light of the judgments in San Francisco and Washington are yet to be determined. Mehta will hold a separate trial to determine remedies in the search case, and a judge is mulling proposed penalties in the Play litigation. But some changes Google has made in response to antitrust scrutiny in recent years have been costly.
First Trial
The case before Mehta traced back to the increased oversight of the tech industry under then president Donald Trump. The Justice Department sued Google in 2020 before Trump left office, and the lawsuit became the first of several against Big Tech companies to go to trial.
Mehta ruled that Google, with about 90 percent market share, has monopoly power in both general search and general search text ads. He found that Google’s deals with partners harm competition and that Google hadn’t shown otherwise.