Written by Jonathan Rubin, Partner and Co-Founder of MoginRubin LLP --
This week’s decision in United States v. Google represents a significant victory for the Department of Justice’s Antitrust Division and various state attorneys general, which successfully argued that Google has exercised anticompetitive practices to maintain its dominant position in the general search market and in the market for text advertising in search (U.S., et al. v. Google LLC, No. 1:20-CV-3010-APM, D. D.C.).
The court determined that Google has monopoly position in general search services, which it achieved – and continues to grip forcefully – through exclusive deals with smartphone manufacturers, browser developers, and wireless services that make its search engine the default.
These deals have blocked competitors from gaining more than relative slivers of the market, stifling innovation and limiting consumer choice. While specific remedies will come later, the ruling opens the door for potential structural remedies, like breaking up Google’s search business, or behavioral remedies, such as requiring Google to license its search technology to competitors.
“Google has not achieved market dominance by happenstance,” Judge Amit P. Mehta conceded. “It has hired thousands of highly skilled engineers, innovated consistently, and made shrewd business decisions. The result is the industry's highest quality search engine, which has earned Google the trust of hundreds of millions of daily users.”
But the judge underscored what he called Google’s “major, largely unseen advantage over its rivals,” that being “default distribution.”
It is well known that most users access search engines through a browser (e.g., Apple Safari) or a preloaded widget on a device. The default search access point is extremely valuable because most users don’t change the defaults. As the default search engine, Google performs billions of searches each day, simultaneously feeding the company many thousands of petabytes of user data.
The judge noted that the enormous competitive advantage of Google’s ubiquitous default position, which brings billions of eyeballs to Google’s search results page where Google sells space for text advertising. Overall, Google’s advertising business booked $47 billion in ad revenue in 2014, which ballooned to $146 billion just seven years later. By contrast, Microsoft’s Bing generated just $12 billion in 2022, which is less than half of what Google pays in revenue shares under its agreements with device makers to be the default search engine.
The court’s decision is a welcome win for the Biden administration, which has pledged to pursue stricter antitrust enforcement in digital markets.
Judge Mehta’s 277-page decision, handed down on Aug. 5, 2024, directed the parties to propose a joint schedule by September 4 for litigating the remedy, which he plans to consider during a September 6 status conference.
Google has said it plans to appeal the court’s decision.
Judge Mehta has served as U.S. District Judge in Washington, D.C., since 2014. In 2021, he was appointed to the United States Foreign Intelligence Surveillance Court. His other high-profile cases include those related to the January 6, 2021, attack on the U.S. Capitol and the Sisco-U.S. Foods merger case.
Other Google-Related Commentary and News from MoginRubin:
- Verdict: Epic Games Proved Google Unlawfully Maintained Monopoly Over Android App Sales and Payments by Jonathan Rubin
- Google Maps Wins Early Victory in Maps Antitrust Class Action by Jonathan Rubin
- States Sue to End Google’s Reign as “Monopoly Gatekeeper for the Internet” by Jonathan Rubin
- Google’s $500M Effort to Undermine Microsoft EU Cloud Deal Fails: Bloomberg Reports
- Google, Meta List Efforts to Comply with New EU Law After Smaller Firms Claim No Progress
- Google to Pay $700M to Settle AGs’ Antitrust Case re Play Store Practices
- Six More Platforms Must Show Compliance with EU’s Digital Markets Act
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