Google Violates Antitrust Laws, Engages in Illegal Monopoly

On August 5, 2024, U.S. District Court Judge Amit Mehta declared that Google had breached antitrust laws by establishing an illegal monopoly and attempting to become the global standard for search engines.

This ruling paves the way for a subsequent court proceeding to determine potential remedies, including the possible divestiture of Google from its parent company Alphabet, which could significantly impact the global advertising landscape.

What Violations Did Google Commit?

Judge Amit Mehta found that Google violated Section 2 of the Sherman Act, or antitrust laws, by maintaining a monopoly in search and advertising services.

"The court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly," stated Judge Amit Mehta in his ruling. The ruling also indicated that Google's dominance serves as evidence of its monopolistic behavior.

Specifically, Google controls 90% of the online search market and 95% of mobile search.

Actions Taken by Google

Kent Walker, Google’s President of Global Affairs, stated that the company will appeal the decision, noting that Judge Mehta described Google as the best search engine in the industry.

Furthermore, Judge Mehta’s ruling did not specify what penalties Google might face for violating antitrust laws.

The resolution of this case could be lengthy, with the possibility that Google will appeal to the U.S. Court of Appeals for the District of Columbia Circuit and, ultimately, the U.S. Supreme Court.

As a result of this issue, Alphabet’s stock fell by 4.5% as of August 5, 2024, amid a broader decline in technology stocks.

Arguments from the U.S. Department of Justice Attorneys vs. Google

Attorneys from the U.S. Department of Justice argue that Google's monopoly allows the company to charge excessively high prices to advertisers without investing sufficient time and resources into improving its quality, which they contend harms consumers.

Additionally, Judge Mehta’s ruling highlighted that Google spends billions of dollars annually to ensure its search engine is the default option on electronic devices and new phones.

This is supported by the fact that in 2021, Google paid $26.3 billion to maintain its dominance.

Conversely, Google insists that it only offers the best services to users compared to other search engines. Google’s attorneys argue that the contracts which make Google the default search engine on many devices do not violate antitrust laws.

They also contend that Judge Mehta should have considered the search market more broadly, including other major tech giants like Amazon and TikTok.

U.S. Attorney General Merrick Garland views the ruling as a “historic victory for the American people,” asserting that no company, regardless of its influence, should be above the law.

White House Press Secretary Karine Jean-Pierre added that the pro-competition ruling represents a victory for American citizens who are entitled to a free, fair, and open internet.