A U.S. judge ruled Monday that Google violated antitrust laws by spending billions of dollars to build an illegal monopoly and become the world’s default search engine, the first major victory for market dominance.
The ruling clears the way for the Second Circuit to rule on changes that could include the collapse of Google’s parent company and change the landscape of the world of online advertising.
It’s also a green light for aggressive U.S. antitrust regulators to prosecute the big tech sector, which has drawn criticism across political lines.
Judge Amit Mehta said in Washington, D.C.: “The court has concluded: Google is a monopoly and has acted as a monopolist to maintain its monopoly.” Google controls about 90 percent of the online search market and 95 percent of smartphones.
The “healing period” can be lengthy and is followed by appeals to the United States Court of Appeals, the District of Columbia Circuit, and the United States Supreme Court. The legal battle could last into next year or even 2026.
Alphabet shares fell 4.5% on Monday as the overall stock market plunged on fears of a recession and technology stocks fell sharply. Google ads will account for 77% of Alphabet’s total revenue in 2023.
Alphabet said it would appeal Mehta’s ruling. “This decision shows that Google offers the best search engine, but we have concluded that we should not make it so readily available,” Google said in a statement.
U.S. Attorney General Merrick Garland called the ruling “a historic victory for the American people” and said, “No company, regardless of size or influence, is above the law.”
“The pro-competition ruling is a victory for the American people,” said White House spokeswoman Karin Jean-Pierre.
Mehta pointed out that Google paid $26.3 billion (around Rs 2,274.8 crore) in 2021 alone to make its search engine standard on smartphones and browsers and maintain its dominant market share.
“The default involves very valuable real estate,” Mehta wrote. “Even if a new company is in a position to default on quality at the end of the contract term, such a company is willing to pay billions of dollars or more in revenue shares to its partners and receive all of the revenue.”
He added: Of course, Google knows that a standard outage will have a huge impact on its bottom line. Google, for example, has realized that losing Safari’s default settings will lead to a sharp drop in requests and, as a result, billions of dollars in revenue. “We expect a loss in sales.”
The ruling is the first major verdict in a series of lawsuits over Big Tech’s monopoly claims. The lawsuit was filed by the Trump administration and was heard by judges between September and November last year.
“A forced sale of the search business could cut off Alphabet’s largest source of revenue,” said Evelyn Mitchell Wolf, senior analyst at eMarketer. If legal action is necessary, the immediate impact on consumers may be delayed.
Over the past four years, federal antitrust regulators have sued MetaPlatforms, Amazon.com and Apple for illegally maintaining monopolies.
Bhupendra Singh Chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur Kiran, his insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.