In a significant development that can change how users browse the internet, Google has been found guilty of violating US antitrust laws.
A federal judge ruled that Google monopolized the advertising and search markets, marking a crucial moment in the US Department of Justice’s (DOJ) antitrust lawsuit against Alphabet, Google’s parent company.
This decision came after an extensive ten-week trial overseen by Judge Amit Metha, who concluded that Google breached Section 2 of the Sherman Act.
The ruling supports the DOJ’s claims that Google operated as an illegal monopoly, particularly in the search and online advertising sectors.
However, this verdict only addresses Google’s liability, with no immediate decisions on fines or other penalties. This case is just one of several legal challenges Google faces in 2024, with another trial set for September to address its advertising technology practices.
Google’s Response and Plans for Appeal
In response to the ruling, Kent Walker, Google’s President of Global Affairs, acknowledged the decision while defending Google’s position. Walker noted that while the court recognized Google as the highest-quality search engine, it concluded that Google’s methods of maintaining its monopoly were unacceptable.
“We appreciate the Court’s finding that Google is ’the industry’s highest quality search engine, which has earned Google the trust of hundreds of millions of daily users,’ that Google ‘has long been the best search engine, particularly on mobile devices,’ ‘has continued to innovate in search’ and that ‘Apple and Mozilla occasionally assess Google’s search quality relative to its rivals and find Google’s to be superior,” he said.
The court highlighted Google’s consistent superiority in search quality, particularly on mobile devices, and its ongoing innovations in the field. Despite this acknowledgment, Google plans to appeal the decision, emphasizing its commitment to creating user-friendly and helpful products as the legal process continues.
Details of the DOJ’s Case Against Google
The DOJ’s lawsuit argued that Google maintained its monopoly by making substantial payments to other companies to ensure its dominance as the default search engine. Notably, Google paid Apple $20 billion in 2022 to keep Google as the default search engine on Apple devices.
This substantial payment was revealed during the trial, during which several Apple executives were called to testify. Despite Apple’s attempts to avoid the subpoenas, high-ranking officials such as Eddy Cue, John Giannandrea, and Adrian Perica provided crucial evidence.
The trial also uncovered that Microsoft had attempted to replace Google as the default search engine on Apple’s Safari browser by offering Apple 90 per cent of its advertising revenue. Microsoft even proposed selling Bing to Apple in 2020, highlighting the competitive dynamics within the search engine market.
Potential Implications for Google’s Financial Arrangements
Google’s regular billion-dollar payments to Apple have been highly lucrative for the latter, accounting for a significant portion of Google’s ad revenue from searches conducted via Safari on iPhones.
However, following the DOJ’s legal victory, this financial arrangement may be in jeopardy. Google’s potential break-up, as hinted by Judge Metha, could disrupt these payments, creating financial uncertainties for both companies.
Furthermore, in July, reports indicated that Google sought to reduce its reliance on Apple for search traffic and revenue, suggesting a shift in strategy amidst mounting legal pressures.
The future of these annual payments remains uncertain, and the outcome of Google’s appeal will likely play a critical role in shaping the company’s financial and operational landscape in the future.
