‘Google is a monopolist’?
In August, U.S. District Judge Amit Mehta ruled that Google violated antitrust laws through its search business, declaring the tech giant a “monopolist.”
“After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly. It has violated Section 2 of the Sherman Act,” Mehta wrote.
The ruling pointed to Google’s immense market power, with the Department of Justice highlighting its “immense revenues and large profit margins.” Google commands an 89.2% share of the general search services market by query volume, a figure that jumps to 94.9% on mobile devices. The company has held an over 80% share since at least 2009.
The White House praised the decision.
“This pro-competition ruling is a victory for the American people,” White House press secretary Karine Jean-Pierre said in a statement. “As President Biden and Vice President Harris have long said, Americans deserve an internet that is free, fair, and open for competition.”
Google’s president of global affairs, Kent Walker, responded by announcing the company’s intention to appeal.
“As this process continues, we will remain focused on making products that people find helpful and easy to use,” Walker wrote in a post on X.
Search plays a pivotal role for both Google and its parent company, Alphabet. In 2023, "Google Search & other" generated $175 billion, representing a significant 57% of Alphabet's total revenue.
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Read MoreBreaking up Google?
The DOJ recently proposed significant remedies to curb Google’s power in the search engine market, including the possibility of breaking up the tech giant.
According to a new court filing, the DOJ is “considering behavioral and structural remedies that would prevent Google from using products such as Chrome, Play, and Android to advantage Google search and Google search-related products and features — including emerging search access points and features, such as artificial intelligence — over rivals or new entrants.”
The DOJ is also exploring measures to restrict or eliminate default search engine agreements, preinstallation deals, and revenue-sharing arrangements tied to Google’s search products. Google currently has high-profile search agreements with Apple’s iPhone and Samsung devices. One potential remedy is introducing a “choice screen,” which would allow users to choose from a range of alternative search engines.
Google’s vice president of regulatory affairs, Lee-Anne Mulholland, called the DOJ’s proposals “radical” and criticized the department for overreach.
“This case is about a set of search distribution contracts. Rather than focus on that, the government seems to be pursuing a sweeping agenda that will impact numerous industries and products, with significant unintended consequences for consumers, businesses, and American competitiveness,” Mulholland wrote in a blog post.
Mulholland emphasized that Google has invested billions of dollars into Chrome and Android, arguing that few companies would have the resources or incentive to maintain them as open-source platforms or to invest at the scale Google has. "Splitting off Chrome or Android would break them — along with many other things," she warned.
Alphabet shares initially dropped following news of the potential breakup, but the decline was short-lived. Year to date, the stock is up 19%, with a 168% gain over the past five years.
Despite the DOJ's suggestions, some experts remain skeptical about a breakup. Daniel Ives, managing director and senior equity analyst at Wedbush Securities, said that despite the antitrust scrutiny, a breakup of Google is "unlikely at this point" and that Google “will battle this in the courts for years."
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