U.S. court ruled that Google is a monopoly
Marco van Hurne
Architect of AI solutions that redefine business efficiency and client engagement.
In a historic blow to one of the biggest of big tech companies, the U.S. District Court for Washington D.C. ruled that Google is a monopoly!
U.S. District Judge Amit Mehta said the company has violated Section 2 of the Sherman Act. He declared that "Google is a monopolist, and it has acted as one to maintain its monopoly".
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At first glance, the decision has nothing to do with Android, YouTube, or any other services that have helped grow the company's market dominance over the years.
Instead, the focus is on its oldest business—search.
Alphabet paid billions to make Google the default search engine on Safari and other browsers, and now the court decided that "Google's distribution agreements are exclusive and have anticompetitive effects".
Intermezzo
In the past there have been more companies ruled as being a monopoly. Here's a short list of those, and what happened afterwards (ChatGPT):
1. Standard Oil Company (1911)
- Why: The company was found to have monopolized the petroleum industry through aggressive pricing, acquiring competitors, and using its market dominance to influence railroads and pipelines.
- Outcome: The Supreme Court ordered the dissolution of Standard Oil into 34 separate companies, which led to the creation of several major oil companies still in existence today, such as ExxonMobil and Chevron.
2. American Tobacco Company (1911)
- Why: It was determined that the company controlled over 90% of the American tobacco market through predatory pricing, acquiring competitors, and creating barriers to entry for new competitors.
- Outcome: The company was broken up into several smaller entities to restore competition in the tobacco industry.
3. AT&T (1982)
- Why: The telecommunications giant was found to have maintained a monopoly over telephone services by controlling local and long-distance phone services, as well as equipment manufacturing.
- Outcome: The company was required to divest its regional Bell operating companies, which created seven independent "Baby Bells," leading to increased competition in the telecommunications sector.
4. Microsoft (2001)
- Why: The company was found guilty of maintaining a monopoly in the PC operating systems market through anti-competitive practices, such as bundling its Internet Explorer browser with Windows and excluding rival browsers.
- Outcome: The court initially ordered Microsoft to be split into two companies, but this was later overturned. Instead, Microsoft agreed to share its application programming interfaces with third-party companies and was subject to oversight to ensure compliance with antitrust laws.
The severity of the declaration means that Google probably can't just pay its way out of this one. If you look at the fallout from the antitrust case against Microsoft's Internet Explorer strategy in 2001, as mentioned above, you've already got an idea of how this all could play out.
But it's been 23 years since then.
Google is much bigger now than Microsoft was at the turn of the millennium. And there's a good chance it's deeply embedded in your life. Here's my best guess as to what happens next and how the Google antitrust decision could affect you.
Possibly not!
While Judge Mehta's decision has been applauded by the White House as "a victory for the American people", Google has already stated that it plans to appeal.
In a statement posted to X, Google's socalled president of global affairs Kent Walker argues that its dominance is simply the natural result of its search engine's quality—conveniently ignoring the billions it paid to Apple to make sure that it was the default search option on millions of iPhones.
Hahahahaha... how dumb do you think we are, Googs...
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Instead, he focused on a snippet in Mehta's opinion that calls Google search, "the industry's highest quality search engine."
The post from Walker reads further: "This decision recognizes that Google offers the best search engine", "but concludes that we shouldn't be allowed to make it easily available". The executive says that Google "will remain focused on making products that people find helpful and easy to use" until its appeals process is completed.
This weeks ruling was all about finding the guilt.
So that means penalties are likely to be assigned during separate proceedings.
But similar to how Microsoft had to settle with the DOJ to alter its business strategy in 2001, Google is likely to walk away from this with more than a fine (although a fine will probably still be involved).
One scenario might be, once the dust has settled, that you could very well open Safari or Firefox to a screen prompting you to choose a default search engine, rather than having the browser simply choose Google for you.
If you are from Europe, you already have that option, cause the EU already enforces a similar browser-selection process on both iPhone and Android, but it's unclear what exactly the UI could look like and which alternatives might be highlighted.
It's also possible penalties could be as severe as forcing Google to break up.
But given that the courts' complaints largely focus on just one aspect of its business, that's unlikely.
While choosing a new default search engine might be set-it-and-forget-it on your end, it would be a big boon for Google alternatives. This includes Microsoft's Bing, which Mehta's opinion said only sees "roughly 6% of all search queries" in the United States despite being second place in the market. And it's also good news for the yet to be released SearchGPT AI driven search engine from OpenAI (read the article ).
It's also possible Apple might take the opportunity to build its own search engine!
How about that !
Bloomberg reporter Mark Gurman last year said the company (Apple) has been toying with this notion. While Apple has had little incentive to go through with development on that project until now, ad revenue from a homegrown search engine could help recoup money lost from its $20 billion deal with Google. This will almost certainly come to an end if Google's appeal fails. (Gurman suggests an Apple-developed search engine could bring in ad revenue rivaling the Apple Watch.)
The DOJ's case against Apple targets how it limits third-party services on its platform in favor of Apple-developed alternatives. The accusations against Google are more about collusion with competitors. Essentially, Apple is being targeted for blocking out competition across its product suite. Meanwhile, Google was targeted for how one facet of its business—search—interacts with other companies. It was when Google started paying Apple, Mozilla, and others to highlight its search engine that it drew accusations of anticompetitive behavior.
Like Apple, Google's business has ballooned beyond search into the Android operating system, physical phones, its own browser, YouTube, maps, and more. But the Court's monopoly accusation wasn't related to how many companies Google has bought or the markets it has cornered. Rather, it was about how one facet of its business—search—interacts with other companies. It was when Google started paying Apple, Mozilla, and others to highlight its search engine that it drew accusations of anticompetitive behavior.
Apple is likely to suffer by losing its annual $20 billion payout from Google. But this case alone does not set a dangerous precedent for a similar suit. Its own DOJ case is the third it has faced in 14 years. The DOJ's concerns are more similar to those coming from Europe than the ones highlighted in Judge Mehta's ruling. It remains to be seen how receptive U.S. courts are to these kinds of complaints.
Google does not need this kind of bad press right now. Its next smartphone, the Pixel 9, is set to debut in a week. You can bet it's going to be pushing Google services hard during its launch event.
That said, any fallout from yesterday's decision is unlikely to affect a launch coming so soon. Penalties still need to be decided and Google needs to be given time to appeal. Given Walker's statement, it seems the company is planning to maintain business as usual in the meantime.
And regardless of the eventual outcome, Google's own products are unlikely to suffer from the decision over the long term. Mehta's chief concerns are with the company's payments to other device makers. As Google already owns the Pixel brand, it is likely free to continue to default its owned services on the devices it makes. That goes for the Chrome browser as well—but this could change depending on how the DOJ's lawsuit against Apple plays out.
Surprisingly, the biggest victim in this decision might not be Google's search engine, but its AI efforts. That's because data it acquired through its search monopoly could then be applied to training its AI. If Google loses its search lead, it threatens what might be one of its biggest dataset contributors.
To me, it's unclear how exactly Google builds its AI training datasets.
While the company has incorporated AI into the search user experience, its privacy policy does not state the full extent of the "information" it uses to train AI. It only promises to anonymize user data before using it elsewhere. There are exceptions—for example, the company has said it only uses Workspace data to train features like spellcheck and Smart Compose. So it's hard to say how far-reaching the effects of the ruling could be.
What we do know is that marketers will be watching this case closely. In a statement emailed to press including CNN and NPR, Emarketer senior analyst Evelyn Mitchell-Wolf said Google's "ubiquity is its biggest strength, especially as competition heats up among AI-powered search alternatives."
Well, that's a wrap for today. Tomorrow, I'll have a fresh episode of TechTonic Shifts for you. If you enjoy my writing and want to support my work, feel free to buy me a coffee ??
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Signing off - Marco
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