A US District Judge Amit Mehta has ruled that Google violated antitrust laws by creating an illegal monopoly in the search engine market. The ruling paves the way for a second trial to determine appropriate remedies, potentially including breaking up Google's parent company, Alphabet and marks a significant victory for government regulators in their efforts to curb the dominance of Big Tech companies, as per Reuters.
In his testimony, CEO Sundar Pichai asserted that Google has developed a superior service for its users. The company contended that people prefer to use Google for searches because they find it highly beneficial. John Schmidtlein, Google’s lead attorney, emphasised, “Google is successful because it offers a better experience," as quoted by Hindustan Times report.
Mehta declared, "Google is a monopolist, and it has acted as one to maintain its monopoly." The tech giant controls approximately 90% of the online search market and 95% of smartphones.
The case, initially filed during the Trump administration, focused on Google's practice of spending billions annually to secure its position as the default search engine on various devices and platforms. Judge Mehta noted that in 2021 alone, Google spent $26.3 billion on such agreements.
"The default is extremely valuable real estate," Mehta wrote, highlighting the difficulty for potential competitors to enter the market. He added, "Google, of course, recognizes that losing defaults would dramatically impact its bottom line."
Another trial and an outcome which hinges on breaking up Google's parent company, Alphabet, would significantly alter the landscape of online advertising, where Google has long been a dominant player.
US Attorney General Merrick Garland hailed the decision as "a historic win for the American people," emphasising that "no company - no matter how large or influential - is above the law."
Google, however, plans to appeal the ruling. The company stated, "This decision recognizes that Google offers the best search engine, but concludes that we shouldn't be allowed to make it easily available."
The legal process is expected to be lengthy, with potential appeals reaching the US Court of Appeals and possibly the Supreme Court. This could extend the case into 2026.
The ruling has already impacted Alphabet's stock, which fell 4.5% amid a broader tech sector decline. Google's advertising revenue accounted for 77% of Alphabet's total sales in 2023.
The case is part of a broader push by U.S. antitrust regulators against Big Tech companies, with similar cases pending against Meta Platforms, Amazon.com, and Apple.
Senator Amy Klobuchar, chair of the Senate Judiciary Committee's antitrust subcommittee, praised the bipartisan nature of the antitrust efforts, stating, "It's a huge victory for the American people that antitrust enforcement is alive and well when it comes to competition."
(With inputs from Reuters)
