The term “Google” has stretched beyond the name of a specific search engine to become a verb, referring to the very act of looking something up on the Internet. As in: When you think of searching for something online, you “Google” it.
This is no mere coincidence; Google controls around 90% of the global search market.[1] But recently, in one of the most significant antitrust actions in recent decades, a federal judge ruled that Google’s overwhelming dominance in the search engine market is not simply due to its superior quality. The court found that Google created an illegal monopoly by securing its place as the default search engine on almost every device we use.
The Origins of the Case Against Google
Digital advertisers are eager to have their products shown to potential customers. Every time you search for a product or service on Google, advertisers compete for the top spots on the search results page. This happens in a split-second auction during which advertisers bid to have their ads appear in response to specific search terms and user demographics. With Google’s vast reach and the detailed data they collect from billions of users, advertisers can target their precise audience, making such ad slots incredibly valuable.
However, Google’s dominance stems in large part from their being the default search engine on the vast majority of browsers, mobile devices, and wireless carriers. If you have ever bought a smartphone, you likely noticed that Google is pre-loaded onto the device. In fact, Google paid over $26 billion in 2021 to ensure that is the default search engine on such platforms.[2] In turn, they receive significant advertising revenue – over $146 billion in 2021 alone.[3]
These exclusive deals create a significant barrier for competing search engines. For advertisers, this means fewer options and higher costs, as Google controls the majority of the market. Competitors would need to spend billions just to get a foot in the door, and even then, they will not have the reach that Google offers.[4] Users face consequences as well – without competition, Google lacks incentives to improve the quality of its search engine.
In 2020, the U.S. Department of Justice and a number of states brought a lawsuit against Google, alleging that they hold an illegal monopoly in the search engine market.[5] Over four years, nine weeks of trial, dozens of witnesses, and thousands of exhibits later, the court agreed. This decision will have a significant impact on the future of search engines and digital advertising.
How the Court Defined Google’s Monopoly
In his ruling, Judge Amit Mehta wrote: “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.”[6]
The court ruled that Google violated antitrust law by maintaining a monopoly in two key areas:
- General Search Services: Google has exclusive distribution agreements that ensure it will be the default search engine on almost every smartphone and browser. This prevents other search engines from competing – users would have to go out of their way to download and access an alternative search engine.
- General Text Advertising: Text ads are the paid links you see at the top of Google search results. Because Google is the default search engine, they also exert significant control in this advertising space, making it difficult for other ad platforms to attract business.
What’s Next for Google and its Competitors
Judge Mehta has yet to determine which penalties Google will face. He scheduled a hearing on September 6 to begin considering a potential remedy.[7] Possibilities include limiting or banning Google’s default search deals, forcing Google to share its search data, or even restructuring the company to break up its monopoly (although breaking up Google is going to be challenging).[8] Antitrust-based corporate breakups have been historically rare in the U.S.
According to Google’s President of Global Affairs and Chief Legal Officer Kent Walker, the company intends to appeal the ruling.[9] This potentially yearslong appeals process will delay any immediate effects for advertisers and consumers alike.[10]
Relatedly, a federal trial is scheduled to begin in Virginia in September to weigh the DOJ’s allegations that Google’s advertising technology constitutes an illegal monopoly.[11]
Potential Impact on Other Alleged Big Tech Monopolies
This ruling is part of a broader effort by the U.S. government to keep Big Tech companies in check. The government currently has antitrust lawsuits against Apple (maintaining a smartphone monopoly), Meta (maintaining a social media monopoly), and Amazon (preventing sellers from offering lower prices on other platforms).[12] Judge Mehta’s ruling in this case will inevitably aid the antitrust plaintiffs in these cases and others.
This decision is monumental for antitrust enforcement and could have far-reaching implications for the tech industry. By limiting Google’s control of the search engine market, other search engines will have opportunities for increased visibility and reach, as well as the ability to garner more business from digital advertisers. Judge Mehta notes that “Google has exercised its monopoly power by charging supra-competitive prices for general search text ads.”[13] While the outcome of the appeal may delay changes, Google will inevitably have to lower their advertising prices to stay competitive, promoting a fairer market for advertisers and consumers alike.
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[1] United States & Colorado v. Google, No. 20-cv-3010 & No. 20-cv-3715, Mem. Op. & J. at 2 (D.C. Aug. 5, 2024).
[2] Ibid at 3.
[3] Ibid.
[4] Ibid at 164.
[5] U.S. Department of Justice, “Justice Department Sues Google for Monopolizing Digital Advertising Technologies” (press release), Jan. 24, 2023
[6] United States & Colorado v. Google, Mem. Op. & J.
[7] Leah Nylen, “Google’s Search Dominance Faces Limited Risks Despite Antitrust Ruling,” Bloomberg, Aug. 7, 2024
[8] Matthew Barakat and Michael Liedtke, “Google illegally maintains monopoly over internet search, judge rules,” Aug. 5, 2024, AP News
[9] David McCabe, “‘Google Is a Monopolist,’ Judge Rules in Landmark Antitrust Case,” The New York Times, Aug. 5, 2024
[10] “Google loses massive antitrust case over its search dominance,” The Associated Press, Aug 5., 2024
[11] Ibid.
[12] U.S. Department of Justice, “Justice Department Sues Apple for Monopolizing Smartphone Markets” (press release), Mar. 21, 2024; Federal Trade Commission, “FTC Sues Amazon for Illegally Maintaining Monopoly Power” (press release), Sept. 26, 2023; Ali Sullivan, “Meta Can’t Dodge Trial In Monopoly Suit, FTC Says,” Law360, June 5, 2024
[13] United States & Colorado v. Google, No. 20-cv-3010 & No. 20-cv-3715, Mem. Op. & J. at 4sss (D.C. Aug. 5, 2024).