Judge Amit Mehta, a US federal judge ruled on Monday that Google is a monopoly. “Google is a monopolist, and it has acted as one to maintain its monopoly,” Judge Mehta wrote in his 286-page filing (PDF). “It has violated Section 2 of the Sherman Act,” he added.
This case has been going on for quiet a while now.
The decision reads:
“Specifically, the court holds 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; and (4) Google has not offered valid procompetitive justifications for those agreements. Importantly, the court also finds that Google has exercised its monopoly power by charging supracompetitive prices for general search text ads. That conduct has allowed Google to earn monopoly profits.
Other determinations favor Google. The court holds that (1) there is a product market for search advertising but that Google lacks monopoly power in that market; (2) there is no product market for general search advertising; and (3) Google is not liable for its actions involving its advertising platform, SA360. The court also declines to sanction Google under Federal Rule of Civil Procedure 37(e) for its failure to preserve its employees’ chat messages.”
The court zoomed in on Google’s exclusive search deal with Apple on its iPhone and iPad devices and its Android mobile operating system. “Antitrust enforcers alleged that Google has illegally maintained a monopoly over online search and related advertising. The government said that Google has paid Apple, Samsung Electronics Co. and others billions over decades for prime placement on smartphones and web browsers. This default position has allowed Google to build up the most-used search engine in the world, and fueled more than $300 billion in annual revenue largely generated by search ads,” Bloomberg reported.
As CNBC wrote, “The Department of Justice and a bipartisan group of attorneys general from 38 states and territories, led by Colorado and Nebraska, filed similar but separate antitrust suits against Google in 2020.”
“Google also has a major, largely unseen advantage over its rivals: default distribution. Most users access a general search engine through a browser (like Apple’s Safari) or a search widget that comes preloaded on a mobile device,” the judge wrote in his decision. “Those search access points are preset with a “default” search engine. The default is extremely valuable real estate. Because many users simply stick to searching with the default, Google receives billions of queries every day through those access points. Google derives extraordinary volumes of user data from such searches. It then uses that information to improve search quality. Google so values such data that, absent a user-initiated change, it stores 18 months-worth of a user’s search history and activity,” he continues to write.
The rivals? “In exchange for revenue share, Google not only receives default placement at the key search access points, but its partners also agree not to preload any other general search engine on the device. Thus, most devices in the United States come preloaded exclusively with Google. These distribution deals have forced Google’s rivals to find other ways to reach users,” the judge explained.
