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Google’s Online Search Monopoly Declared Illegal by U.S. Court

Collage Maker 26 Apr 2023 01 17 PM 103 - Moldova Invest

International

Google’s Online Search Monopoly Declared Illegal by U.S. Court

Google was sued by the U.S. Department of Justice in 2020 for its control over approximately 90% of the online search market. Monday’s landmark decision represents a significant blow to Alphabet, Google’s parent company, and could alter the way tech giants conduct their business.

This is one of many lawsuits filed against major tech companies as U.S. antitrust authorities seek to bolster competition within the industry. The case has sometimes been described as an existential threat to Google and its owner, given its dominance in the search and online advertising sectors. It is still unclear what penalties will be imposed on Google and Alphabet as a result of this decision. Fines or other remedies will be determined in a future hearing.

Alphabet plans to appeal

The government has called for a “restructuring”—which could, at least theoretically, mean the breakup of the company, according to the BBC. In his decision, U.S. District Judge Amit Mehta stated that Google paid billions of dollars to ensure it was the default search engine on smartphones and browsers. “Google is a monopolist and acted as such to maintain its monopoly,” Judge Mehta wrote in his 277-page opinion. Alphabet has announced that it plans to appeal the decision. “This decision recognizes that Google offers the best search engine but concludes that we should not be allowed to make it readily available,” the company said in a statement.

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No company is above the law

U.S. Attorney General Merrick Garland, the nation’s top prosecutor, hailed the decision as a “historic victory for the American people.” “No company—no matter how large or influential—is above the law,” Garland said in a statement yesterday. “The Department of Justice will continue to enforce our antitrust laws vigorously.” Federal antitrust regulators have filed other lawsuits against big tech companies, including Meta Platforms, which owns Facebook, Amazon.com, and Apple Inc., accusing them of operating illegal monopolies.

Google typically pays over $10 billion a year to the state

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Monday’s ruling follows a 10-week trial in Washington D.C., where prosecutors accused Google of spending billions of dollars annually to be pre-installed as the default search engine on platforms like Apple, Samsung, Mozilla, and others. The U.S. government claimed that Google typically pays over $10 billion a year for this privilege, securing access to a steady stream of user data that has helped it maintain its market position. By doing so, prosecutors argued, other companies have not had the opportunity or resources to compete meaningfully. “The best evidence of the importance of these defaults is Google’s checkbook,” argued Department of Justice attorney Kenneth Dintzer during the trial. The Google search engine is a major revenue generator for the company, bringing in billions of dollars, largely thanks to the advertising displayed on its search result pages.

Another case against the company is set to be tried in September

Google’s lawyers defended the company, arguing that users are drawn to their search engine because they find it useful and that Google invests in improving it for consumers. “Google wins because it’s better,” said Google attorney John Schmidtlein during the final arguments earlier this year. Schmidtlein also argued that Google continues to face intense competition, not just from other general search engines like Microsoft’s Bing, but also from more specialized sites and apps that people use to find restaurants, flights, and other services. In his ruling, Judge Mehta concluded that being the default search engine is “a highly valuable asset” for Google.

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“Even if a new entrant were well-positioned in terms of quality to bid for default status when an agreement expires, such a firm could only compete if it were prepared to pay partners a revenue share of billions of dollars,” Judge Mehta wrote. Another case against the tech company, related to its advertising technology, is scheduled to be tried in September. Meanwhile, in Europe, Google has been fined billions in monopoly cases.


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