How Google Dominates the Market: A Violation of U.S. Antitrust Regulations

A landmark court ruling has determined that Google acted illegally to squeeze out competition and dominate the online search and connected advertising field.

Google controls around 90% of the online search market, leading to the US Department of Justice filing a similar lawsuit against the tech giant in 2020. This week’s ruling follows an arduous ten-week trial, during which prosecutors said that Google had paid billions of dollars to firms such as Mozilla, Samsung, and Apple to guarantee that its search engine is installed as the default. This meant that competitors could not compete, due to their relative lack of resources and the absence of opportunity—signifying Google’s violation of Section 2 of the Sherman Act.

The lawsuit also pertains to Google’s text adds that sit alongside the search results, with the ruling determining that the company has also “exercised its monopoly power by charging supracompetitive prices for general search text ads,” allowing it to “earn monopoly profits.”

Judge Amit Mehta of the US District Court for the District of Columbia stated that “Google is a monopolist, and it has acted as one to maintain its monopoly.” The ruling notes that “Google’s distribution agreements are exclusive and have anticompetitive effects,” with the tech giant said to have failed to offer valid justifications for such agreements.

Alphabet, Google’s parent company, has said that it intends to appeal against the decision. The company’s representatives also state that it owns such a large share of the market because it’s the most useful search engine for consumers, given the company’s significant investments to make it better. Lawyers also say that Google faces stiff competition from sites and apps that people use for more specialized searches, such as to find flights, restaurants, and hotels.

However, if the ruling stands, the company could face considerable penalties. Indeed, while Google may face significant fines, there is recognition that monetary penalties generally don’t have the desired impact, as big tech firms have the resources to pay them with ease. In the worst-case scenario, Google could witness the break-up of its own company, especially given that the US government has demanded a “structural relief.”

While competition laws exist to protect the user and ensure a variety of services available, Adam Kovacevich, founder of Chamber of Progress, states that those most likely to benefit from this ruling are other big tech firms, such as Microsoft , which “has underinvested in search for decades, but the ruling opens the door to a court mandate of default deals for Bing, a slap in the face to consumers who choose Google because they think it’s the best .”

And that’s not all—Google is due to face further charges for its use of advertising technology in September 2024.

Source: CNN , CNBC , PacerMonitor , BBC

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