Google’s search business violates US competition law, judge rules in landmark case

The defeat for Google was the culmination of a years-long challenge brought forth by the US Department of Justice (DOJ) and a handful of states in 2020.

The decision could transform how Americans access online information and challenge Google’s long-standing dominance in search.

Decided Monday in the US District Court for the District of Columbia, the ruling finds that Google leveraged exclusive contracts worth billions of dollars to secure its position as the default search provider on smartphones and web browsers, thereby stifling competition from rivals like Microsoft’s Bing and DuckDuckGo. Notably, in 2021 alone, Google paid $26.3bn to maintain this dominant position.

Among the most significant of these exclusive deals was an arrangement with Apple; one witness for Google in the case said the search giant shares 36% of its total search ad revenue from Safari with the iPhone maker.

US District Judge Amit Mehta concluded that Google’s actions were anticompetitive and in violation of Section 2 of the Sherman Act, a key antitrust framework in the US. “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,” read the court’s decision.

The case came to a head in a 10-week trial last year in which the US government argued that Google’s dominance in online search – which generates substantial profits – was maintained through exclusionary agreements with companies like Apple and Samsung that effectively locked out competitors.

During the trial, Microsoft CEO Satya Nadella expressed concerns that Google’s dominance had led to an oligopolistic environment, and warned that it could potentially extend into the burgeoning field of AI (where Microsoft, OpenAI's top backer, is going toe-to-toe with Google).

The DOJ also took issue with Google’s dominance in search ads – a position the government argued it abused when it unfairly inflated ad prices, further entrenching its market power.

Google defended its business practices, claiming that its success simply reflects the superior quality of its service.

Monday’s decision represents the first time in over two decades that the Justice Department has taken on a US tech company over antitrust allegations and won.

The court has not yet specified the exact repercussions for Google. Judge Mehta will decide whether significant changes to Google’s business practices or even the divestiture of some operations will be required.

Google plans to appeal the decision, the company’s president of global affairs, Kent Walker, said in a statement shared with The Drum. Walker suggests that the court’s decision, which cites Google’s superior performance, could serve as fodder in the appeal.

“This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available. We appreciate the Court’s finding that Google is ’the industry’s highest quality search engine, which has earned Google the trust of hundreds of millions of daily users’, that Google ’has long been the best search engine, particularly on mobile devices’, ’has continued to innovate in search’ and that ’Apple and Mozilla occasionally assess Google’s search quality relative to its rivals and find Google’s to be superior,’“ Walker said. “Given this, and that people are increasingly looking for information in more and more ways, we plan to appeal. As this process continues, we will remain focused on making products that people find helpful and easy to use.”

This case is poised to have far-reaching effects on how people use and interact with the internet. It could set a crucial precedent for future antitrust litigation and regulatory actions against tech monopolies, shaping how century-old antitrust laws are applied in the modern digital economy.

Google is currently facing another antitrust case concerning its advertising technology business. The trial for that case is set to begin on September 9.

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