Google’s Search Monopoly Unveiled: Antitrust Case Finds Tech Giant Spent Billions to Control Market
The latest antitrust ruling could end the practice of Google being installed as the default search engine on smartphones. Photo by Jakub Porzycki/NurPhoto via Getty Images.
Key Takeaways
- Judge Amit P. Mehta ruled that Google holds a monopoly in the search market.
- The ruling states that Google’s agreements with Apple, Samsung, and others stifle competition.
- Alphabet has long paid device manufacturers and browser developers to install Google as a default search engine.
On August 5, a landmark court ruling condemned Google’s anticompetitive business practices in the search industry, setting one of the most important legal precedents that could shape the American Big Tech industry in years.
The verdict could end the norm of installing Google as the default search engine on smartphones and enforce a more open and competitive search market.
How Google Bought Its Search Monopoly
The crux of the case against Google rests on the firm’s exclusive agreements with device manufacturers, browser developers, and mobile carriers, ensuring that its search engine remains the default across their platforms.
The Department of Justice (DoJ) and its co-plaintiffs argued that this limited competitors’ access to key distribution channels, helping Google maintain its monopoly of the search market.
In his opinion, Judge Amit P. Mehta ruled that: “(1) there are relevant product markets for general search services and general search text ads; (2) Google has monopoly power in those markets; (3) Google’s distribution agreements are exclusive and have anticompetitive effects.”
The case explored how Google spent billions securing exclusive agreements with Apple, Samsung, and others, building on legal precedents established by a landmark antitrust case against Microsoft in the 90s.
Quoting from the Microsoft ruling, Judge Mehta concluded that Google’s agreements should be deemed exclusive, even though they don’t strictly prevent alternative search engines from being used. “It is enough that the contract clos[es] to rivals a substantial percentage of the available opportunities for [] distribution,’” he said.
Opening up the Search Market
Of course, the latest ruling isn’t the first time Google has landed in hot water over its search monopoly.
In 2018, the European Commission levied a record €4.34 billion fine against the company for bundling its search engine and Chrome apps into the Android operating system.
The EU action forced Google to make changes to Android so that its own products weren’t installed by default at the expense of rivals. However, exclusive agreements with device manufacturers continued to ensure that, in practice, that remains the case for most smartphones.
While Alphabet President for Global Affairs Kent Walker said the company intends to appeal the ruling, the kind of distribution agreements Google has used until now look set to disappear. But the firm’s antitrust challenges won’t go away so easily.
Alphabet Breakup on the Cards
On top of its latest victory, the DoJ has a second antitrust suit pending against Google, which is set to begin next month.
Prosecutors allege that the firm holds a monopoly in digital advertising, where Google products dominate the market.
The preliminary findings of a similar EU antitrust probe in June found that “only the mandatory divestment by Google of part of its services would address its competition concerns.”
If the US litigation comes to a similar conclusion, Google could be forced to spin off parts of its AdTech business to assuage antitrust concerns.
