US judge: ‘Google created an illegal search engine monopoly’

Google has an illegal monopoly on the search engine market, leaving little to no room for competitors, as its business practices violates U.S. antitrust laws.

“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,” United States district judge Amit Mehta concludes in his verdict.

The court’s ruling largely revolves around so-called default distribution: agreements Google makes with third parties like web browser developers, smartphone manufacturers, and telecom providers to make Google Search the default search engine.

In 2021, Google spent over 26 billion dollars on such agreements to maintain its dominant position. Because of these arrangements, most devices in the United States are exclusively preloaded with Google Search. “These distribution deals have forced Google’s rivals to find other ways to reach users,” Judge Mehta says.

According to the U.S. Department of Justice and nearly every state’s Attorney General, who filed two separate lawsuits in late 2020, Google has unlawfully used the distribution agreements to thwart competition and maintain its monopoly in the search engine and online advertising market.

Google argued in court that it gained its dominant position on the search engine market simply by offering a better-quality product than the competition. For that reason, web browser developers and device manufacturers choose Google Search as their default search engine. “We compete hard for that placement so that users can easily access Google Search,” the company wrote in a blog post last year.

Judge Mehta argues that third parties opt for Google Search not because of its quality but because they don’t want to miss out on large sums of money from Google.

“The default is extremely valuable real estate,” the judge says in the verdict. “Because many users simply stick to searching with the default, Google receives billions of queries every day through those access points. Google derives extraordinary volumes of user data from such searches. It then uses that information to improve search quality.”

Judge Mehta points out that Google benefits from the distribution agreements in another way: it generates more users. More users mean more advertisers and more advertisers mean more revenues. In 2021, Google earned over 146 billion dollars in advertising revenue.

Mehta ultimately comes to the conclusion that “Google has not achieved market dominance by happenstance.”

The U.S. Department of Justice calls the verdict 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,” Attorney General Merrick Garland says in a press release.

Alphabet, Google’s parent company, stated that it plans to appeal Mehta’s decision. “This decision recognizes that Google offers the best search engine but concludes that we shouldn’t be allowed to make it easily available,” a spokesperson told Reuters.

It is not yet known what the exact consequences of the ruling will be. The first ruling only concerns Google’s liability, but no consequences have been linked to that yet. These will be determined in the next phase of the lawsuit.