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A federal judge ruled on Monday that Alphabet – the parent company of tech giant Google – broke federal antitrust laws as it reinforced its dominant position over online searches and related advertising.
The ruling from U.S. District Judge Amit Mehta in the District of Columbia opens the door to a second trial to determine potential remedies to Google’s monopolization of the search market. It marks the Justice Department’s first victory over a monopoly in over 20 years.
The Justice Department sued Google over its control of roughly 90% of the online search market – an amount that rises to 95% on smartphones. Judge Mehta noted that Google paid $26.3 billion in 2021 alone to ensure that its search engine remained the default option on web browsers and smartphones to keep its dominant market share.
“The court reaches the following conclusion: Google is a monopolist, and has acted as one to maintain its monopoly,” Mehta wrote.
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The federal court’s ruling could force changes in Google’s business practices. (REUTERS/Steve Marcus/File Photo/File Photo / Reuters Photos)
Mehta’s ruling paves the way for a second trial to determine potential remedies for Google’s monopoly, like requiring the company to stop paying billions of dollars annually to smartphone makers to keep its search engine as the default option.
“The default is extremely valuable real estate… Even if a new entrant were positioned from a quality standpoint to bid for the default when an agreement expires, such a firm could compete only if it were prepared to pay partners upwards of billions of dollars in revenue share and make them whole for any revenue shortfalls resulting from the change,” Mehta wrote.
“Google, of course, recognizes that losing defaults would dramatically impact its bottom line. For instance, Google has projected that losing the Safari default would result in a significant drop in queries and billions of dollars in lost revenues,” he added.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GOOGL | ALPHABET INC. | 159.45 | +1.16 | +0.73% |
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Google pays billions of dollars annually to preserve its search functionality as the default option on web browsers and smartphones. (Photo by Thilina Kaluthotage/NurPhoto via Getty Images / Getty Images)
Google President of Global Affairs Kent Walker said in a statement provided to FOX Business: “This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available. We appreciate the Court’s finding that Google is ‘the industry’s highest quality search engine, which has earned Google the trust of hundreds of millions of daily users’, that Google ‘has…
Read More: Federal judge rules Google’s search business broke antitrust laws