U.S. Court Rules Google Holds Illegal Search & Ad Monopoly

WASHINGTON: In a landmark antitrust decision delivered on August 5, US District Court ruled that Google illegally maintains monopoly in search engine market and text advertising. This significant judgment could spell trouble for tech giant following high-profile trial where CEO Sundar Pichai and Microsoft’s Satya Nadella testified.

Judge Amit P Mehta of US District Court for District of Columbia found that Google’s substantial market share and exclusive distribution agreements solidify its monopoly power in both general search services and text ads The ruling stems from 2020 lawsuit filed by Justice Department and several states with trial concluding in September last year after ten weeks.

Court emphasized Google’s overwhelming market dominance noting that it holds 89.2% share of search market which climbs to 94.9% on mobile devices In contrast competitors like Bing Yahoo and DuckDuckGo hold much smaller shares Google’s control of search text ads with 88% market share in 2020 was also deemed monopolistic due to high entry barriers for new competitors.

Judge Mehta’s judgment refuted Google’s argument that it lacked monopoly power. It confirmed existence of distinct market for general search engines (GSEs). The court highlighted Google's near-total control of distribution channels. This control is bolstered by deals with major players like Apple Samsung and Verizon. Such dominance significantly hinders competition.

The ruling found that Google’s preloading of its search engine on Apple and Android devices creates anticompetitive harm. By securing default search positions through substantial revenue-sharing agreements, Google effectively locks competitors out of market. This impedes their ability to invest and innovate.

Despite this court did not recognize separate market for search ads. It found no evidence of monopoly power in that sector. However, ruling concluded that Google’s actions including exclusive agreements and market control, violate Section 2 of Sherman Act.

Google has announced plans to appeal decision. It argues that ruling misunderstands its business practices. Kent Walker, Google’s President of Global Affairs, asserted that decision overlooks Google’s role in providing high-quality search services and innovations.

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