Judge Rules Google is a Monopoly
The search giant lost a major court battle. What's next?
Last September, I noted that the Justice Department had filed suit against search giant Google for anti-competitive practices and expressed my reservations with the government’s theory of the case. Yesterday, Google lost in court.
David McCabe, NYT (“‘Google Is a Monopolist,’ Judge Rules in Landmark Antitrust Case“):
Google acted illegally to maintain a monopoly in online search, a federal judge ruled on Monday, a landmark decision that strikes at the power of tech giants in the modern internet era and that may fundamentally alter the way they do business.
Judge Amit P. Mehta of U.S. District Court for the District of Columbia said in a 277-page ruling that Google had abused a monopoly over the search business. The Justice Department and states had sued Google, accusing it of illegally cementing its dominance, in part, by paying other companies, like Apple and Samsung, billions of dollars a year to have Google automatically handle search queries on their smartphones and web browsers.
“Google is a monopolist, and it has acted as one to maintain its monopoly,” Judge Mehta said in his ruling.
The ruling is a harsh verdict on the rise of giant technology companies that have used their roots in the internet to influence the way we shop, consume information and search online — and indicates a potential limit of Big Tech’s power. It is likely to influence other government antitrust lawsuits against Google, Apple, Amazon and Meta, the owner of Facebook, Instagram and WhatsApp. The last significant antitrust ruling against a tech company targeted Microsoft more than two decades ago.
“This is the most important antitrust case of the century, and it’s the first of a big slate of cases to come down against Big Tech,” said Rebecca Haw Allensworth, a professor at Vanderbilt University’s law school who studies antitrust. “It’s a huge turning point.”
While most anti-trust action focuses on harm to consumers, the thrust of this case was harm to competitors and those paying to advertise on the site:
The government argued that by paying billions of dollars to be the automatic search engine on consumer devices, Google had denied its competitors the opportunity to build the scale required to compete with its search engine. Instead, Google collected more data about consumers that it used to make its search engine better and more dominant.
Judge Mehta sided with the government, saying Google had a monopoly over general online search services. The company’s agreements to be the automatic search engine on devices and web browsers hurt competition, making it harder for rivals to challenge Google’s dominance.
For more than a decade, those agreements “have given Google access to scale that its rivals cannot match,” Judge Mehta wrote.
The government also accused Google of protecting a monopoly over the ads that run inside search results. Government lawyers said Google had raised the price of ads beyond the rates that should exist in a free market, which they argued was a sign of the company’s power. Search ads provide billions of dollars in annual revenue for Google.
Judge Mehta ruled that Google’s monopoly allowed it to inflate the prices for some search ads. That, in turn, gave the company more money to pay for its search engine to get prime placement, he said.
“Unconstrained price increases have fueled Google’s dramatic revenue growth and allowed it to maintain high and remarkably stable operating profits,” he said in the ruling.
While there are plenty of other search engines out there, Google is clearly the dominant actors, with estimates ranging from 60.4 percent to 90.3 percent of the US market. Google argues, correctly, that it is the dominant search engine because it produces better results for consumers. The government argues, also correctly, that Google’s dominance allows it to collect more data from said consumers and thus charge more to advertisers. The judge* agreed.
We’re waiting now for the next shoe to drop. What penalties will Mehta impose? Will he force Alphabet to divest some of its properties? Levy massive fines? Something else?
One imagines that Google’s competitors are happy. For now. But they’re all massive enterprises. Assuming continued Democratic control of the DOJ after November’s election, will it be going after them next?
And to what end for consumers? It may well be that search, certain software, and social media networks are natural monopolies. Yes, we’ve seen the enshittification of Google search as it gets bogged down with more ads. But will we get better results if Bing or DuckDuckGo get more market share? Interestingly, that doesn’t seem to be of interest to this cohort of trust-busters.
*While Judge Mehta’s name is a familiar one, I do find it mildly amusing that his name reads like one of Google’s chief competitors.
I hope we are seeing a shift back to a more sane interpretation of anti-trust laws. The radical reinterpretation of anti-monopoly law is proof of just how successful the legalized and open bribery scheme that is the Federalist Society has been. Wealthy patrons have been ablet to get Federalist judges to rule that, essentially, if there is any possible argument that can be made that merger or acquisition could conceivably benefit consumers, then it has to be approved, no matter how things turn out in the real world. (Hint: the proposed benefit evaporates and consumers are left with higher prices, worse products and poorer customer service.)
@MarkedMan: The thing is that my life has been made immeasurably better by Google at essentially zero cost to me. I pay them for additional storage because my Gmail and photos archives are so massive but it’s like $5 a month.
This is very similar to what happened to Microsoft in the late 1990s, and which caused the beginning of Steve Ballmer’s “lost decade” of stagnant growth and falling behind, before MSFT turned things around under Satya Nadella.
FWIW, I use Bing almost exclusively for search, except for mapping which Google is better at, and Bing pays me to do it.
The law has trouble keeping up with innovation.
@James Joyner:
You’re not Google’s customer when it comes to search. In fact, search itself isn’t the product being sold. Google sells advertisements embedded in search results. Their purpose isn’t to help you find information you need, but to click on the ad links they charge their customers for.
Granted, they have to deliver some useful info, or you won’t use their search at all. But that’s incidental.
Google has become more and more useless to me for information searches.
This decision is one where I’m scratching my head. I get the decision and I think it’s probably correct, but I’m only the product; I’m not sure how this decision matters in my situation. Does changing the parameters of whose product I am make my situation different?
I suspect not. Time will tell; I guess. Or not.
I think that used to be true. However the way that Google now pushes results like pushing paid links instead of actual results has degraded the service.
Searching for actual reviews of a product these days does not give the kind of results I once got, for example.
@Steven L. Taylor: Yes, that’s fair. Search results have gotten decidedly worse.
People who want to publish a book at Amazon they wrote sometimes go to Amazon KDP pretend companies* instead who charge hundreds or thousands to publish/edit/create a cover for their books and then do the services paid for. It is a frequent complaint at a KDP** forum.
.
The people who get scammed get there by some form of search. Google or somebody else.
*- Like this now defunct website that has a F Better Business Bureau rating
**- Kindle Direct publishing
@Tony W:
The innovation, in question, being using a dominant position in one product space to become dominant in another product space by blurring the lines between the product spaces. Companies keep finding new and innovative ways to do this, while also innovating in ways to stifle competition in that first space.
Granted, without that innovation, we would not have Chrome (a browser created to make Google the default search engine, to feed into the ad network) and Android (an operating system created to make Google the default search engine…)
@James Joyner: I think the Google is a prime example of enshittification (and you probably said so in one of your posts on that topic).
@Bill Jempty: Oops I omitted the word ‘not’ after do. I’ll be very happy when the edit function returns.
@James Joyner:
Back in the original trust busting days I don’t think anyone every argued that we would be better off if gasoline had never been invented, just that Standard Oil was using their monopoly power to crush competition.
And remember, you are not Google’s customer, you are their product. Their actual customers are the ones that the prosecution contend are facing the consequences of Google’s market domination.
@Tony W:
FWIW I use DuckDuckGo which is a privacy based search engine, and every once in a while I get frustrated at lack of results and try the same search on Google. No substantial difference, ever.
Were we not just discussing the accusation that we have too many pages of regulations? And this judge takes 277 pages for this opinion? Could have just said, ‘Of course they’re a monopoly. Duh.’ Not even a whole page. Could have delivered it in a fortune cookie.
@MarkedMan:
I’m really enjoying Google’s AI which applies super advanced science to paraphrasing the first search result directly below.
@Michael Reynolds: Beat me to it on the opinion’s length. I was going to say, “don’t tell Neil Gorsuch!”
Which reminds me, how long are his opinions?
@Steven L. Taylor: Microsoft and windows is a prime example of enshittification. I don’t have enough space in the comment box to cover the anti-consumer and anti-competitive changes MS has been engaging in since win 11 rolled out. At the rate MS is going I wouldn’t be surprised if win12 releases as a subscription service to allow access to your computer.
@Matt: Ugh! Tell me about it! I’ve had a really great MSI laptop that I love the shit out of for the last 6 years or so. I upgraded it the way I like it, my keyboard has missing letters from typing so hard, and the touchpad is perfect.
But it’s not eligible for the Windows OS upgrade. So I have to send this perfectly good computer that I love very much (it has a rainbow keyboard) to the dump because the processor doesn’t meet the requirements?!
@Matt: I finally bit the bullet and switched to Mac a few years ago after having been a Windows user since 3.1 was a thing.
@Jax: When win 11 was released MS was still selling brand new laptops/tablets that did NOT meet the requirements for win 11 to run…
Win11 was basically a big fuck you to common users and those that are worried about ewaste. SO many perfectly functional machines having to be tossed because of MS making arbitrary decisions about CPU compatibility. THe CPU requirements was just so freaking chaotic it made no real sense. They weren’t even consistent about CPU generations either. Some of the CPUs on the same generation would work but others of the same silicon/generation weren’t allowed even if they had more cores etc. From a security perspective it didn’t make any sense.
@Steven L. Taylor: Ah yes 3.1 the version when windows finally hit it’s stride. I was so jelly of those that had win 3.1 the best I had was MS-DOS 5 something with dos shell.
I’ll probably end up going some flavor of Linux once win 10 pro becomes “hazardous” to use on the net. I’m delaying the switch because I use my computers mostly for gaming. So while WINE has gotten vastly better and some companies actually release Linux versions it’s still not quite where I’d like it to be.
I still cannot believe win11 is so hostile against users customizing it. I’m not even talking high end stuff I’m talking simply trying to move the fcking task bar type stuff. Legit removing quality of life features for no fcking reason.
Win12 is looking to be a subscription based spyware extravaganza. The security risks are just ridiculous. Especially considering MS’s talking point about excluding CPU support in 11 was “for the sake of security”. Here lets take screenshots of your desktop and upload it to a public server that is “secure”. Surely that won;t cause issues…