Google convicted of search monopoly

"After investigation, the court concluded: Google is a monopoly and they took such actions to maintain their dominant position," Judge Amit P. Mehta announced on August 5.

The decision follows a 10-week trial in Washington, DC, brought by the US Department of Justice and dozens of state attorneys general since 2020. The group accused Alphabet, Google’s parent company, of spending tens of billions of dollars a year to make its search engine “unlawfully the default” globally. This is considered the first major victory for the federal government in the fight against Big Tech’s market dominance.

The ruling will also pave the way for a second trial to determine what measures to take against Alphabet, which could include breaking it up into smaller companies — a move that would shake up the online advertising landscape that Google has dominated for years.

Alphabet still has time to make adjustments and fixes, however, and the company said it plans to appeal. "This decision acknowledges that Google provides the best search engine, but concludes that we should not be allowed to make it easier and more available to users," the company said in a statement.

Meanwhile, White House spokeswoman Karine Jean-Pierre said "the ruling promoting competition is a victory for the American people". According to him, Americans "deserve a free, fair and open Internet".

According to court documents, Google now controls about 90% of the overall online search market and 95% on smartphones. The company spent $26.3 billion in 2021 alone to ensure it is the default search engine across multiple platforms, thereby maintaining its market share.

One of the biggest recipients of Google’s money is Apple. According to court documents released earlier this year, Eddy Cue, Apple’s senior vice president of services, said Google would pay the company $20 billion in 2022, or 17.5% of the iPhone company’s operating income.

Court documents byBusiness InsiderThe findings also show that since 2017, the default search engine on Safari, Firefox, and other browsers has brought in 54% of Google's search revenue each year. In 2020, Alphabet estimates that it could lose 60-80% of its search volume on Apple devices if it were replaced, equivalent to a loss of $28.2 billion to $32.7 billion. Therefore, the ruling costs both sides tens of billions of dollars.

Analysts predict that Alphabet will have to split up the company after the ruling. "Separating the search business would cut Alphabet off from its largest revenue source. Losing the ability to sign exclusive default agreements could also hurt them," Emarketer analyst Evelyn Mitchell-Wolf toldReuters.