A US federal judge has ruled that Google maintained an illegal monopoly on the search market and spent billions of dollars on exclusive deals to maintain that monopoly.
Amit Mehta presided over the four-year court case, calling Google a “monopolist” and finding that it had violated US antitrust law in a 286-page decision on Monday.
The US Department of Justice, which brought the case, argued that Google had paid tens of billions of dollars every year for anti-competitive deals with wireless carriers, browser developers and device manufacturers to ensure its position as the default search engine.
These payments — with Google giving special attention to Apple — totalled more than $US26 billion (around $AU40 billion) in 2021, according to court documents.
Google maintained that it faced fierce competition in the search sector and it achieved its dominant position in the market — handling more than 90 per cent of online search traffic — through the quality of its products.
US attorney-general Merrick Garland said the ruling was a “historic win”.
“No company — no matter how large or influential — is above the law.”
Jonathan Kanter, who heads the Department of Justice’s antitrust division, said it holds Gogole “accountable” and “paves the path for innovation for generations to come and protects access to information for all Americans”.
Alphabet’s president of global affairs, Kent Walker, said the company would appeal against the ruling.
The decision “recognises that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available”.
The proceedings will now enter a second phase in which the court will determine what steps Google needs to take to remedy the isuues.
The Department of Justice has not indicated which penalties it would seek, but it may focus on curbing Google’s ability to strike the deals at issue in the case.
Court documents revealed that Google had paid Apple $US20 billion ($AU30.7 billion) in 2022 alone.
Mehta said that the disparity of Google’s search volume compared to its rivals was “startling”.
The deals Google strikes “foreclose a substantial portion of the general search services market and impair rivals opportunities to compete,” said Mehta in his ruling.
“Google has no offered pro-competitive justifications for those arguments.”
He added that the deals deny competitors “scale” — the “essential raw material for building, improving and sustaining” a search engine. Mehta also said that Google benefits from a “feedback loop” in which parties “routinely renew” exclusive distribution deals with the company.
“That is the antithesis of a competitive market,” he said.
However, it is worth noting that Mehta did not find that Google had a monopoly in the search advertising market as the Department of Justice had alleged.
Mehta separately slammed the company for “the lengths to which Google goes to avoid creating a paper trail for regulators and litigants”, but did not penalise it for the behaviour, reasoning that it was not necessary to find Google guilty. Mehta noted that his decision “should not be understood as condoning Google’s failure to preserve chat evidence”.
Google made some $US175 billion in revenue from search-based advertising last year — its total revenue was $US307 billion. Bing makes around $US12 billion.
