Google’s monopoly on search engine violates antitrust laws, US court rules

Google is a monopolist and has acted as one to maintain its monopoly, violating antitrust law, a US judge has ruled. 

The tech giant dominates search and through it, the online advertising business.

“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. It has violated Section 2 of the Sherman Act,” US District Judge Amit Mehta, Washington DC, wrote in his order on Monday. 

The Sherman Antitrust Act of 1890 prohibits unfair monopolies and promotes free competition in commerce. 

The court held that there are relevant product markets for general search services and general search text ads but Google has monopoly power in those markets. 

Google’s distribution agreements are exclusive and have anticompetitive effects and it has not offered valid procompetitive justifications for those agreements, Mehta wrote. 

“Importantly, the court also finds that Google has exercised its monopoly power by charging supracompetitive prices for general search text ads. That conduct has allowed Google to earn monopoly profits,” Mehta said. 

The judge noted that Google’s share in general search was nearly 90% in 2020, and even higher on mobile devices at almost 95%. The second-place search engine, Microsoft’s Bing, sees roughly 6% of all search queries—84% fewer than Google. 

While noting that Google’s market dominance was achieved through hiring of highly skilled engineers, consistent innovation consistently, and shrewd business decisions, it has a major, largely unseen advantage over its rivals: default distribution.

“Most users access a general search engine through a browser (like Apple’s Safari) or a search widget that comes preloaded on a mobile device. Those search access points are preset with a “default” search engine. The default is extremely valuable real estate. Because many users simply stick to searching with the default, Google receives billions of queries every day through those access points,” the judge explained.  

“Google derives extraordinary volumes of user data from such searches. It then uses that information to improve search quality. Google so values such data that, absent a user-initiated change, it stores 18 months-worth of a user’s search history and activity,” he said. 

The distribution agreements benefit Google in another important way as more users mean more advertisers, and more advertisers mean more revenues. 

“In 2014, Google booked nearly $47 billion in advertising revenue. By 2021, that number had increased more than three-fold to over $146 billion. Bing, by comparison, generated only a fraction of that amount—less than $12 billion in 2022,” the judge noted. 

The ruling is the first major decision in a series of cases taking on alleged monopolies in Big Tech in the US and across Europe.

The case was filed by the US Justice Department, along with the attorneys general of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee, and Virginia in January 2023. The lawsuit accused Google of monopolizing multiple digital advertising technology products in violation of Sections 1 and 2 of the Sherman Act.

US Attorney General Merrick Garland called the ruling “a historic win for the American people.”

“No company — no matter how large or influential — is above the law. The Justice Department will continue to vigorously enforce our antitrust laws,” he said. 

Google’s parent company Alphabet said it plans to appeal Mehta’s ruling.

“This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available,” Google said in a statement.