Google's Search Monopoly: Antitrust Case and Its Implications

A historic ruling against Google could change the internet as we know it

Nicole Narea covers politics and society for Vox. She first joined Vox in 2019, and her work has also appeared in Politico, Washington Monthly, and the New Republic. A federal judge found Monday that Google's search business constitutes an illegal monopoly, a landmark ruling and major victory for the Biden administration as it seeks to clamp down on Big Tech. The decision has the potential to bring major changes to the internet -- and sends a signal that no company is too big to regulate. US District Judge Amit Mehta found that "Google is a monopolist, and it has acted as one to maintain its monopoly." That involved protecting its dominance in the search engine market; Mehta focused particularly on the fact that Google signed contracts with companies, including Apple, to become the default search engine on their devices. Google currently enjoys a nearly 90 percent share overall and an almost 95 percent share on mobile devices. Google has vowed to appeal the ruling, which it has framed as an attempt to make it harder for consumers to access a search engine they prefer. The appeals process could take years to play out, and Judge Mehta has yet to levy specific penalties against Google, which will be decided following a hearing in September. While it may be true that many consumers prefer Google over any currently available alternative, should the ruling stand, it may allow a competitor to devise a better product, and one that actually has a real chance to penetrate the market. And that could mean more search options for consumers. "If the door is locked, you can't get consumers," said Fiona Scott Morton, a professor at Yale School of Management and former chief economist at the Justice Department's antitrust division. "The door isn't locked anymore. The door is open [to] a whole industry of innovators who have good ideas, and then we would see a change in competition going forward." The implications of the case, which was initially brought under the Trump administration, aren't yet entirely clear. Much of it may depend on exactly how Mehta decides to penalize Google, and how difficult that penalty makes doing business. In weighing punishment, Mehta will need to meaningfully penalize Google while minimizing any negative impacts on consumers -- and that is a "real quandary," said Herbert Hovenkamp, an antitrust scholar at the University of Pennsylvania Carey Law School. Perhaps the most likely remedy would be to force Google to exit any contracts it signed allowing device makers to offer Google as a default search engine for a certain sum of money. But that might have minimal immediate impact on Google: those makers may still decide to make Google their default search engine, but without having to pay Google for the privilege. "Apple will just end up doing what it's already doing," Hovenkamp said. "And that may be true for a lot of device makers." But if a better search engine eventually comes along -- say, one powered by AI, with better safety and privacy standards, or even a different way of displaying ads -- then device makers don't have to stick with Google. Fundamentally, that kind of competition should spur innovation, which is good for consumers. Scott Morton said that Google is currently the best search engine in part because almost everyone uses it and it has exclusive positions on various device operating systems, which creates a "self-perpetuating circle." Its user base gives it a large volume of data and reliable revenue opportunities that it can then use to cover the development, marketing, and acquisition costs that help it keep its edge. "Once you break that, we don't know what might happen," she said. "It could be very exciting." In addition to its implications for the future of the internet, the ruling could affect the way other Big Tech companies do business. "What it signals is that if you've got a dominant product, you've got to be very careful to make sure that your licensing and contract agreements are open, because making them exclusive can be dangerous," Hovenkamp said. That could mean greater caution around partnerships between companies. The Google ruling could also serve as a template for future antitrust cases, Hovenkamp said. But it's not clear how predictive this case will be of the other pending antitrust lawsuits that the Biden administration has filed against Big Tech companies. It has several in process: Scott Morton said that each of those cases is different in terms of their content and precedent from the Google case, which relied on a ruling against Microsoft in the late '90s over its anticompetitive practices to maintain its monopoly in the PC market. "The behavior of Google was very similar to the behavior of Microsoft, and so that similarity allowed the Justice Department to show the judge that this conduct really fit into that same pattern and therefore should be treated the same way, namely made illegal," she said. The Google case might not therefore serve as a precedent in the existing cases against other Big Tech companies. But it has contributed to a significant vibe shift in terms of how tech companies can expect to be regulated. "What is different is a change in the temperature," Scott Morton said of the effect of the ruling in Silicon Valley. "These firms are not too big. We have applied the law to them, and we have found that -- even though they're American, even though they're innovative and spend money on R&D, even though they have executives who look good in the suit -- they can still be found liable."

Google is a very strange monopolist

Bill Barr must be smiling. A federal judge on Monday tagged Google as an illegal monopolist in the antitrust case he championed as Trump Attorney General. While nobody can feel sorry for a company valued at $2 trillion, the judge's 286-page ruling finds that Google acts like a monopolist but without harming consumers. This could pose some problems on appeal. The Justice Department sued Google nearly four years ago for maintaining an illegal search engine monopoly, allegedly by paying web browsers and device manufacturers such as Apple to be featured as their default search engine. Judge Amit Mehta agreed, but with some paradoxical findings. As a preliminary problem, the judge narrowly defined the market in which Google allegedly boasts a monopoly as "general search text advertising." This excludes competing social media platforms, online retailers and "specialized vertical providers" such as Yelp that backed DOJ's lawsuit. The judge says 90% of search queries are run on Google, and its only major general search competitor is Microsoft (now valued at $3 trillion). However, the judge concedes that Microsoft was slow in adapting its search engine for mobile devices, causing it to lose ground. "Google has not achieved market dominance by happenstance. It has hired thousands of highly skilled engineers, innovated consistently, and made shrewd business decisions," Judge Mehta writes. "The result is the industry's highest quality search engine, which has earned Google the trust of hundreds of millions of daily users." So what's the antitrust problem? The judge says Google's advertising revenue-sharing payments to Apple, Mozilla and others for default placement have made it harder for potential startups and Microsoft to compete. Yet users can switch to other search engines if they want. And Judge Mehta notes that Apple and Mozilla have "promotional deals" with other search engines. Microsoft pitched Apple "on making Bing the default multiple times." Startup Duck Duck Go also "made a bid to be the default for private browsing mode searches on Safari," but neither it nor Microsoft "succeeded in part due to their inferior quality." This makes for a very strange monopolist -- one that does better by consumers because its search engine is superior. "Google's partners value its quality, and they continue to select Google as the default because its search engine provides the best bet for monetizing queries," the judge explains, adding that Google "has continued to innovate in search." The judge nonetheless holds this against Google by saying it has leveraged its search dominance to collect more data, which it uses to improve search quality and ad targeting. This "network effect" has entrenched its monopoly, the judge says. No doubt this isn't good for Google's search competitors. But antitrust law isn't intended to punish companies that win in the marketplace. The law is supposed to protect consumers from a monopolist that uses its power to raise prices or restrict choices. There's no denying that Google has market power, which it doesn't always use for the public good, and its algorithms have discriminated against conservatives. But unclear is how its alleged monopoly has harmed consumers -- which has been the standard for violating antitrust laws for 40 years. The DOJ lawsuit and Judge Mehta's ruling strike us as backing King Kong in a fight against Godzilla. Monday's ruling doesn't stipulate a remedy, which the judge will consider after a hearing in September. Remedies could include barring Google from making payments to Apple and others, spinning off its Chrome browser and forcing Google to share its data with competitors. How any of this would help search users, as opposed to Google's competitors, isn't apparent. Google says it will appeal, and by the time the case is resolved, the evolution of technology and the search market may have made the point moot. OpenAI recently unveiled a SearchGPT prototype that aims to compete with Google, which was late to AI and fumbled the rollout of its Gemini tool. Meanwhile, if you're looking for more antitrust paradoxes, the Federal Trade Commission is now investigating OpenAI and its largest investor -- which happens to be Microsoft. Will the real monopolist please stand up, or is every large tech company a monopolist now?

Google monopoly ruling shows 19th-century law can police Big Tech

Sorry, a summary is not available for this article at this time. Please try again later. SAN FRANCISCO -- A federal judge's ruling that Google broke the law to maintain a monopoly in search has dealt a blow to one of Big Tech's main arguments against regulation: that America's antiquated antitrust laws aren't flexible enough to address the fast-changing nature of tech innovation. On Monday, Judge Amit Mehta of the U.S. District Court for the District of Columbia wrote in a 277-page decision that Google had broken section 2 of the Sherman Act, a law signed into effect by President Benjamin Harrison in 1890. The ruling was the first major antitrust ruling against a Big Tech company since a federal court ruled against Microsoft for maintaining a monopoly through its operating system in 2000. Since then, Google and a small handful of other firms have become titans of the internet age, pulling in revenue never before seen in the history of business and touching the lives of billions of people every day. For most of the past 20 years, the U.S. government has encouraged their growth, rarely intervening in acquisitions or launching antitrust lawsuits against them. That has changed in recent years, as politicians, regulators, smaller competitors and consumers have become more critical of Big Tech's power. This court case is the first in a series that have been launched against Google, Meta, Amazon and Apple, all of which have pushed back. In its defense in this case, Google argued that the rapid evolution of the internet, including the rise of TikTok and the artificial intelligence boom, meant that the company did not have a monopoly. Even Google competitors and critics who welcomed the government's lawsuit worried that Washington didn't have the tools to constrain tech giants. "The one lesson I take from this is that antitrust law has a lot of flexibility in it. It seems able to accommodate dealing with these large companies," said Neil Chilson, who previously served as the Federal Trade Commission's chief technologist and is now head of AI policy at the Abundance Institute, a tech think tank. For decades, most judges and antitrust experts subscribed to a view of competition law that focused on whether company behavior increased prices for end consumers. Big Tech products like Facebook's social network, or Google's Gmail or search engine, didn't come under scrutiny because they were free for regular people to use. But as the companies acquired competitors, grew rapidly richer and became gatekeepers to the internet, some scholars argued that the consumer price-focused approach to antitrust needed to be revolutionized. Politicians also began souring on Big Tech as concerns grew in the late 2010s about social media's impact on polarization and children's mental health. While lawmakers were previously loath to be seen as anti-tech or anti-innovation, more recently Silicon Valley has become a popular political punching bag for people from both parties. The investigations into Big Tech began under the Trump administration, as tech CEOs were repeatedly hauled in front of Congress to answer questions on misinformation, competition and alleged bias. Trump's Justice Department sued Google in October 2020, and the department continued the lawsuit after Biden took power, culminating in last fall's trial and Monday's ruling against the company. Many Big Tech critics were thrilled about Mehta's decision, suggesting it bodes well for prosecutors in pending Big Tech antitrust cases and bolsters the argument that internet giants are using their dominance to stifle competition in emerging technologies. Nidhi Hegde, interim executive director of the American Economic Liberties Project, a think tank that has advocated for more aggressive antitrust enforcement, called it "a resounding signal that the anti-monopoly movement is here to stay." The Justice Department's antitrust lawsuit against Apple bears some similarities to the Google search case, alleging that the tech giant uses its prominence in smartphones to control app developers. But as with the Google case, much will depend on how the court defines the relevant market -- as the tighter iPhone ecosystem or the broader smartphone market in which Apple is one of multiple rivals. Apple has said it would "vigorously defend" itself in the case and has sought to have it dismissed. The Federal Trade Commission has also filed antitrust lawsuits against Amazon and Meta. The agency is challenging the online retailer over the fees it charges merchants on its marketplace, while it argues in the Meta case that Facebook has quashed competition, especially by buying rivals Instagram and WhatsApp. Both companies have promised spirited defenses and say they aren't monopolies. (Amazon founder Jeff Bezos owns The Washington Post.) "This decision generates momentum for those other cases in the coming months," said Notre Dame Law School Professor Roger Alford, who is consulting for state attorneys general in a second anti-monopoly case against Google, involving its role in the digital advertising market. But other antitrust experts say Mehta's decision itself won't likely have such influence. "Antitrust cases are so case-by-case," said Sam Weinstein, a professor at Cardozo School of Law and a former Justice Department antitrust lawyer. "What happens in a Google case will have very little bearing on what happens with a Facebook case or an Amazon case." Google has already said it would appeal Monday's ruling to the U.S. Court of Appeals. A ruling from that court could have a more widespread effect on how judges around the country think about antitrust and Big Tech, Weinstein said. "That's going to be a very important decision." If Google loses there it could try to get the matter before the Supreme Court. However Google fares in any appellate court, the judgment will be grounded, like Mehta's, in the body of antitrust law that has grown up over more than 130 years. U.S. lawmakers have periodically proposed updating legislation to specifically address new internet technologies. Such efforts have never drawn enough backing to pass into law.

Mint Quick Edit | Google's search monopoly ruling: Error 404?

With countries around the world trying to rein in Big Tech, the latest antitrust ruling in the US against Google marks a big victory for regulators -- the last big one having come when the US Justice Department took Microsoft to court in 1998. On Monday, US District Judge Amit Mehta ruled that Google had violated antitrust laws through an illegal monopoly in the search engine market. Google spent billions of dollars ($26.3 billion in 2021 alone) to secure its position as the default search engine on various devices and platforms, tilting the playing field against other players. Two other cases against Google are on the cards, including an antitrust lawsuit related to online advertising. Free-market advocates who insist markets can fix their own flaws often argue that judicial intervention is needless, given how technological innovation tends to overthrow monopolies. Right now, AI chatbots are seen as a threat to Google's search dominance. There is some truth to this, but we mustn't depend solely on upheavals of technology to keep tech markets open and competitive, given the winner-takes-all dynamics of digital fields. By the time chatbots displace Google Search, it may be too late.