The online search industry could be significantly altered by a federal ruling which found Google illegally monopolized the search engine and advertising business, as the decision may prevent the browser from being defaulted and dominating the ad market.
Monday’s outcome of the pivotal antitrust lawsuit the Justice Department brought against Google marks the most significant ruling condemning a major technology giant in more than two decades. In his 286-page decision, U.S. District Judge Amit P. Mehta said the company abused its dominance in the search market by paying companies like Apple and Samsung billions of dollars a year to install Google as the default search engine on smartphones and web browsers, throttling competition and harming consumers. According to court documents, Google owes much of its more than $300 billion in annual revenue to search ads.
This case has been reported to be the most distinct victory for the Justice Department in a monopoly case in decades. “Not since Microsoft lost in the 1990s have we seen a case of this magnitude,” Notre Dame Law School professor Roger Alford, who served in the Justice Department’s antitrust division, told USA Today.
Monday’s decision did not include remedies, which will be decided separately, likely after an appeal. One possible remedy could result in Google losing its ability to strike device deals that have played a significant role in allowing the search engine to be so widely used.
If maintained, this ruling is expected got be a “major boost” for other antitrust cases pending against Google as well as other major tech giants such as Amazon, Apple, and Meta, said Loyola University Chicago School of Law professor Spencer Weber Waller in a statement to USA Today. Devising the right remedy is critical to restoring competition in the marketplace, he added.
The trial’s outcome may also shift the pull of the search engine business slightly in Microsoft’s favor, challenging the “Google Web” that the company’s unchecked dominance created, as said by Microsoft CEO Satya Nadella during his testimony.
However, Baird Equity Research senior analyst Colin Sebastian pointed to tactics used by Microsoft to grow market share of its Bing search engine over the years in a research note Monday, from paying users to use its search engine to embedding it in Office.
Chamber of Progress CEO Adam Kovacevich told USA Today that Monday’s ruling hands Microsoft an unearned boost, as Bing has previously fallen short to Google despite the companies using similar strategies.
Since Mehta’s ruling, shares in Google parent company Alphabet have considerably slipped as part of a broader tech stock selloff. This company losing its default position coupled with the possibility of Google losing its position as a default browser could cost the tech giant billions.
