Federal Judge: Google Is a Monopoly Today on TAP: The Justice Department just won its case against Google.
by David Dayen, Luke Goldstein August 5, 2024 Judge Amit Mehta of the D.C. District Court ruled today that Google violated the Sherman Act by buying its way onto browsers and devices and making it nearly impossible to avoid its search engine. “Google is a monopolist, and it has acted as one to maintain its monopoly,” Judge Mehta wrote in his 286-page ruling. “It has violated Section 2 of the Sherman Act.” The decision in the first major monopolization case in 25 years is a big win for the Justice Department’s Antitrust Division, and reinforces the aggressive antitrust policies of the Biden administration. It shows that, in fact, law enforcers claiming that there was a new era of entrenchment and consolidation in the U.S. economy got it right. The ruling has major implications for future developments in the tech industry, as the companies that dominated Web 2.0’s platform era are working to do the same thing with artificial intelligence. It also could affect subsequent cases being waged right now against Facebook, Amazon, and Apple. In particular, Judge Mehta found that Google’s practice of paying for access to be the default search engine drove its dominance, which amounted to taking close to 90 percent of all search queries in 2020, and nearly 95 percent of all search queries on mobile devices. Google becoming the default browser raised the costs of competition from other search engines to impractical levels. Mehta was not swayed by the argument that “competition is just a click away” and that users could easily change default settings to use another browser. “Roughly 50 percent of all general search queries in the United States flow through a search access point covered by one of the challenged contracts,” he wrote, referring to special deals whereby Google paid browser or device companies to become the default option. “Another 20 percent of all general search queries in the United States flow through user-downloaded Chrome, which defaults to Google.” It is an unequivocal ruling for Google’s dominance over the search engine function, but there are caveats. Mehta was not swayed by a small part of the plaintiff’s argument, mainly laid out by the state AGs, that Google had leveraged its monopoly over the search function to control the back-end digital advertising supply line and distort the market. Mehta ruled narrowly that since Google holds market power over search, it can charge “supracompetitive” rates for the text ad placements that appear on its search pages. But the states were more ambitious, claiming that Google controlled adtech markets through SA360 and used that anti-competitively to effectively cut Microsoft’s Bing out from its closed system. That could prove to be a difficult hurdle to overcome in the DOJ’s separate antitrust case filed in 2023 against Google, targeting its monopolization of adtech. Mehta held that the DOJ did not clearly define the relevant market for search advertising and thus Google could not be held liable for abusing a monopoly over it. The DOJ will likely have to better define the market in the adtech case, set to begin this fall in front of a different judge in the Eastern District of Virginia. The Google search case will now move to a remedies phase. Judge Mehta will have to determine what penalty should be imposed for Google’s exclusive dealing to get its search engine included as the default on browsers and devices. He could unwind the deals, which cost Google $26 billion in 2021. He could require browsers and devices to provide options to users for which search engine to use. Or he could break up Google in some manner. Google will almost certainly appeal the case. <https://prospect.org/blogs-and-newsletters/tap/2024-08-05-federal-judge-google-is-monopoly/>
