WASHINGTON — A judge ruled Monday that Google’s ubiquitous search engine is illegally abusing its dominant position to stifle competition and stifle innovation, a sweeping decision that could upend the Internet and embroil one of the world’s best-known companies.
The long-awaited decision by U.S. District Judge Amit Mehta comes nearly a year after a lawsuit between the U.S. Department of Justice and Google began in the country. largest anti-monopoly conflict in a quarter century.
After reviewing reams of evidence, including testimony from top executives at Google, Microsoft and Apple during last year’s 10-week trial, Mehta made his potentially market-changing decision three months after the two sides presented their positions. their closing arguments in early May.
“After carefully considering and weighing the testimony and evidence, the court reaches the following conclusion: Google is a monopolist and has conducted itself as such to maintain its monopoly,” Mehta wrote in his 277-page ruling.
It’s a major blow for Google and its parent company, Alphabet Inc., which has long maintained that its popularity stems from an overwhelming desire among consumers to use a search engine that is so good at what it does that it has become synonymous with looking things up online. Google now handles an estimated 8.5 billion searches worldwide every day, nearly double the daily volume of 12 years ago, according to Google. a recent study released by the investment company BOND.
Google will almost certainly appeal the decision, and the case could end up in the U.S. Supreme Court.
The decision tentatively confirms the case of antitrust regulators at the Justice Department, which filed the lawsuit nearly four years ago when Donald Trump was still president and has ramped up efforts to curb the power of Big Tech during President Joe Biden’s administration.
The case cast Google as a technological bully that has methodically thwarted competition to protect a search engine that has become the centerpiece of a digital advertising machine that generated nearly $240 billion in revenue last year. Justice Department lawyers argued that Google’s monopoly allowed it to charge advertisers artificially high prices while giving it the luxury of not having to invest more time and money into improving the quality of its search engine — a lax policy that hurt consumers.
As expected, Mehta’s ruling focused on the billions of dollars Google spends each year to install its search engine as the default option on new mobile phones and tech gadgets. In 2021 alone, Google spent more than $26 billion to lock in those default agreements, Mehta said in his ruling.
Google laughed off the accusations, noting that consumers have historically switched search engines when they were disappointed with the results they received. Yahoo, for example, now a minor player on the Internet, was the most popular search engine in the 1990s before Google came along.
Mehta said the evidence at trial showed the importance of the defaults. He noted that Microsoft’s Bing search engine has 80% of the search market in the Microsoft Edge browser. The judge said that shows that other search engines can be successful if Google is not established as the predetermined default option.
Yet Mehta also called the quality of Google’s product a key component of its dominance, saying bluntly that “Google is widely recognized as the best (general search engine) available in the United States.”
Mehta’s finding that Google has an illegal monopoly opens a new legal stage to determine what changes or penalties should be imposed to undo the damage and restore a more competitive landscape.
The potential outcome could result in a broadly supported injunction requiring Google to dismantle some pillars of its Internet empire or stop it from spending billions annually to ensure that its search engine automatically answers queries on the iPhone and other Internet-connected devices. After the next phase, the judge could conclude that only modest changes are needed to level the playing field.
If a major change happens, it could be a coup for Microsoft. The company’s power was undermined in the late 1990s when the Justice Department filed an antitrust lawsuit against the software maker, accusing it of abusing the dominant position of its Windows operating system on PCs to shut out competitors.
That Microsoft case mirrored the one brought against Google in different ways, and now the outcome could echo in the same way. Just as Microsoft’s fierce antitrust battle created distractions and obstacles that opened up more opportunities for Google after its founding in 1998, the decision against Google could be a boon for Microsoft, which already has a market value of more than $3 trillion. Alphabet was once worth more than Microsoft, but now trails its rival with a market value of about $2 trillion.
In addition to boosting Microsoft’s Bing search engine, the outcome could hit Google at a crucial tipping point that is pivoting technology into the age of artificial intelligence. Both Microsoft and Google are among the early leaders in AI in a battle that could now be influenced by Mehta’s market-disrupting decision.
Microsoft CEO Satya Nadella was one of the Justice Department’s star witnesses during testimony in which he expressed frustration with deals Google made with companies like Apple that made it nearly impossible for its Bing search engine to make progress even as Microsoft has poured more than $100 billion into improvements since 2009.
“You wake up in the morning, you brush your teeth, and you Google it,” Nadella said at one point in his testimony. “Everyone talks about the open web, but there really is the Google web.”
Nadella also expressed fear that an anti-monopoly measure would be needed to prevent the situation from worsening. as AI becomes a greater force in search.
“Despite my excitement that there is a new angle for AI, I am deeply concerned that the vicious cycle I find myself caught in could become even more vicious,” Nadella said during testimony.
Google still faces other legal threats besides this one, both in the U.S. and abroad. All the antitrust lawsuits filed against Google at home and abroad. In September, a federal trial begins in Virginia over the Department of Justice’s allegations that Google’s advertising technology constitutes an illegal monopoly.