"Google Is A Monopolist" And Other Key Points From Judge Mehta's Ruling

Karina Montoya researches and reports on broad media competition issues and data privacy at the Center for Journalism & Liberty, a program of the Open Markets Institute, in Washington, D.C.

Google holds an illegal monopoly over online search and search text advertising, United States District Court for the District of Columbia Judge Amit Mehta ruled Monday, marking a historic win for the Department of Justice (DOJ) in its first antitrust case against Google. Following a trial that ended in November last year, the case centered around the legality of Google’s exclusive agreements to secure Chrome as the default search engine and leverage that dominance to build its search ad business.

To understand the ripple effects of the ruling, here’s a breakdown of the key points in the 277-page decision:

1. Monopolists can’t buy their way to dominance

By paying other tech firms— including mobile carriers, Android phone manufacturers, and browser operators including Apple and Mozilla— tens of billions of dollars over the years, “Google has obtained a largely unseen advantage over its rivals: default distribution,” reads the ruling. Without this advantage, Google wouldn’t have been able to extract “extraordinary” volumes of personal data to build its Chrome browser, and it would not have been able to squash its rivals in search.

DuckDuckGo, an ads-free and privacy-centered search engine with 2 percent market share in the US, applauded the ruling: “Google has used its monopoly power to block meaningful competition in the search market […] even though DuckDuckGo provides something valuable that people want and Google won't provide — real privacy protection online— Google makes it difficult to use DuckDuckGo by default.”

During closing arguments presented in May this year, Google’s defense had said to the Judge that DuckDuckGo “created competitive pressure” for Google. But Judge Mehta didn’t buy that argument— the ruling notes that there is “little hope that a smaller firm” such as DuckDuckGo could compete with Google.

2. One monopoly can birth more monopolies

Another key point in the ruling is that default distribution also enabled Google to monopolize another market: search text ads, which are displayed as links on search results in response to users’ queries – the foundation of Google’s ad search business. Given that Google faced no meaningful competition from other search engines, whatever prices those ‘rivals’ offered to advertisers didn’t really affect Google’s ad prices either.

On this point, the judge delivered an important message that struck at the heart of Google’s defense: “[T]he material consideration in determining whether a monopoly exists is not that prices are raised and that competition is actually excluded but that power exists to raise prices or exclude competition when it is desired to do so.”

Evidence that this power exists was provided by Google in court: the tech giant did not dispute that it consistently and gradually increased ad prices, and did not lose any business as a result. This behavior is something “a firm without monopoly power would have been unable to do,” the ruling reads, citing the 1998 US v Microsoft case. As a result, Google has essentially overcharged advertisers for years just because it could, with the primary purpose of “driving long-term revenues.”

3. No sanctions on Google for deleting chatlogs

The DOJ had requested that the Judge sanction Google for its failure to preserve employee’s chatlogs, as it deemed Google intended to hide evidence that would have strengthen the DOJ’s case. But the Judge did not determine that the court needed to do this since it would have not affected any decision in the ruling.

But Judge Mehta was careful to clarify what this really means for Google: “The court’s decision not to sanction Google should not be understood as condoning Google’s failure to preserve chat evidence. Any company that puts the onus on its employees to identify and preserve relevant evidence does so at its own peril. Google avoided sanctions in this case. It may not be so lucky in the next one.”

4. New hearing will set the stage for remedies

This ruling did not impose immediate remedies to Google’s violations of antitrust law, as the case was bifurcated so that the parties could litigate these remedies in a separate proceeding.

In the lawsuit, the DOJ already had asked the court to enjoin Google from continuing to make these payments, so it is expected this would happen at the very least. At this point, there is room for the DOJ to propose additional remedies, including structural separations, for example, targeting Google's ownership of products that entrench its monopoly on search, such as the operating system Android.

However extensive the remedies would be, it could open up more opportunities for competitors in search and search text advertising, potentially leading to more options for consumers and better terms for advertisers.

In another court filing, Judge Mehta ordered both parties to propose a new schedule for this litigation no later than September 4. A pre-status conference to discuss what comes next will take place on September 6 at 2 p.m. ET in the US District Court in Washington, DC.

Whats’s next

The win is seen as a victory by advocates and experts who, like Judge Mehta, assessed that “Google is a monopolist, and it has acted as one to maintain its monopoly.” But the company plans to appeal, suggesting a long road ahead that may end up before the US Supreme Court in time.

Meanwhile, other antitrust lawsuits are underway, including another DOJ case against Apple and Federal Trade Commission suits targeting Meta and Amazon. In fact, Google will have to face the DOJ again at a federal court in Virginia on September 9 for a separate antitrust trial on digital advertising technologies used primarily by news publishers. Yesterday’s ruling may yet signal a new era in antitrust enforcement in the US.