In finding that Google violated Section 2 of the Sherman Act, US District Judge Amit P. Mehta said on Monday that “Google is a monopoly and it has acted to preserve its monopoly.”
While the ruling doesn’t force Google to take any immediate action, it sets the table for potential changes that could fundamentally change how consumers search for information online and how businesses reach those consumers.
This is true of sports fans, teams, leagues, athletes, NIL influencers, sneaker businesses, media companies, marketing firms, and many others with significant stakes in athletics. All of them could see changes in their online experience that have economic consequences.
US vs. Google focuses on the Justice Department’s claims that Google wrongfully uses exclusivity agreements to ensure default status on “virtually every desktop and mobile device in the US.” Google, according to the DOJ, is a monopoly in three markets: general search services, search advertising, and general search text advertising.
Last September, Mehta presided over a bench trial (without a jury) that lasted nine weeks. The trial involved dozens of witnesses, numerous experts and more than 3,500 pieces of evidence. Mehta praised the advocacy as “first rate” in the case, which began when the DOJ and 14 states sued in 2020 (a bunch of other states filed their own lawsuit, which is included in Mehta’s decision).
Much of the case concerns Google’s use of contracts to provide its “necessary search settings.” Google signed distribution deals with browser developers, wireless carriers and mobile device companies to gain status and, as Mehta found, stifle competition.
For example, Google is the default search engine for Safari and Firefox browsers. The hard-to-replace Google Search Widget is also present on “all android devices,” and for all devices except Samsung, Google Chrome “comes preloaded as an exclusive browser.” This strategy of exclusivity, Mehta reasoned, effectively locks out Google’s competitors.
The search engine data cited in Mehta’s 277-page opinion paints a similarly vivid picture. In 2020, 89.2% of search queries and 94.9% of mobile searches came through Google. Microsoft’s Bing is a distant second at a paltry 6%.
Mehta acknowledged that Google’s market dominance is partly a reflection of merit and common sense. He credited the company’s “highly skilled engineers” as well as its consistent innovation and “savvy business decisions” as instrumental.
But more problematic for the judge is Google’s acquisition of “default distribution,” meaning Google’s strategy of making its search engine the default or preloaded version. Mehta noted that getting default status is invaluable because “many users just stick with default searches” rather than try a different one. Google then uses search data, including user search histories and actions, to improve its engine to further disadvantage competitors. The company is also leveraging its search engine dominance to drive massive advertising revenue, growing roughly 210% from about $47 billion in 2014 to roughly $146 billion in 2021.
Mehta concluded that Google has monopoly power in the aggregate search services and aggregate search text advertising markets, including charging above-market prices for aggregate search text advertising. Mehta, on the other hand, sided with Google that the company does not have monopoly power in the search advertising market. He reached several other legal conclusions in support of the company.
However, Mehta’s main finding is that Google is violating antitrust law. The 53-year-old judge added that he was “appalled by the lengths to which Google goes to avoid creating a paper trail for regulators and litigants” and suggested that Google had “pretty effectively trained its employees to ‘bad’ not to produce evidence. »
Mehta directed the parties to file a joint status report by September 4 to determine the timeline for the remedies proceedings. They will appear before DC-based Mehta on September 6.
Mehta could order a series of measures that would injunctively limit Google’s use of exclusive contracts or even require the divestment of the company’s assets. The DOJ says that in antitrust cases, “the central goals of remedies are to stop the defendant’s wrongful conduct, prevent its recurrence, and restore competition in the affected market.”
“This victory against Google is a historic victory for the American people,” US Attorney General Merrick Garland said Monday. “No company, no matter how big or powerful, is above the law.”
Kent Walker, Google’s president of global affairs, issued a statement to the media saying that Mehta’s ruling “recognizes that Google offers the best search engine,” although Walker acknowledged that the judge concluded that “we shouldn’t be allowed to make it easily accessible.” Google is expected to appeal Metha’s decision in the US District Court of Appeals for the District of Columbia. Because Google is considered a monopoly, the Department of Justice, states, and other parties may bring additional lawsuits against Google.
how Sportico explained that reducing Google’s presence could change sports leagues’ marketing strategies and partnerships with technology companies. Ticket, apparel and sneaker companies, including league and player affiliate companies, pay to appear on the first page of Google searches or on Google-owned YouTube. Media companies are also trying to “game” Google results to increase story views. All of these strategies can be modified by the search market where Bing or other search engines have a greater presence.