A US judge on Monday handed Alphabet Inc’s Google a major legal blow, ruling in a landmark antitrust case that it has maintained a monopoly with its dominant search engine.
The court decision against a “big tech” giant could alter how the sector operates
US District Court Judge Amit Mehta found that Google had a monopoly for search and for text advertisements through exclusive distribution agreements that made it the “default” option that people were likely to use on devices.
Photo: AP
“After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly,” Mehta wrote in his ruling.
The Internet behemoth “has a major, largely unseen advantage over its rivals: default distribution,” he wrote.
The antitrust trial pitting US prosecutors and nearly a dozen states against Google ended in May.
At the heart of the government’s case was the massive payments made by Google to Apple Inc and other companies to keep its world-leading search engine as the default on iPhones, Web browsers and other products.
US Department of Justice lawyers argued that Google achieved and perpetuated its dominance — and strangled rivals — through these default deals that also expanded to Samsung Electronics Co and other device makers.
“This victory against Google is a historic win for the American people,” US Attorney General Merrick Garland said. “No company — no matter how large or influential — is above the law.”
Google would appeal the verdict, Alphabet global affairs president and chief legal officer Kent Walker said.
Walker pointed out that Mehta concludes Google is the industry’s highest-quality search engine, particularly on mobile devices.
“Given this, and that people are increasingly looking for information in more and more ways, we plan to appeal,” Walker said. “As this process continues, we will remain focused on making products that people find helpful and easy to use.”
It remained to be seen what remedies or damages the judge might order in the case.
In one possible good sign for Google, Mehta concluded in his ruling that the technology titan’s contravention of the US Sherman Antitrust Act did not have “anticompetitive effects.”
“Google’s loss in its search antitrust trial could be a huge deal — depending on the remedy,” Emarketer senior analyst Evelyn Mitchell-Wolf said.
“A forced divestiture of the search business would sever Alphabet from its largest source of revenue,” she said.
Even losing the option of making exclusive deals to be the default option on browsers, smartphones or computers would hurt Google, she added.
Google’s search business would be hampered as generative artificial intelligence wielded by Microsoft Corp’s Bing and OpenAI’s budding “SearchGPT” ramp up competition.
“The biggest winner from today’s ruling isn’t consumers or little tech, it’s Microsoft,” Chamber of Progress CEO Adam Kovacevich said. “Microsoft has underinvested in search for decades, but today’s ruling opens the door to a court mandate of default deals for Bing.”
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