Judge Rules Google Illegally Monopolized Search Market

A federal judge has ruled that Google illegally monopolized the search market through exclusive deals.

In a major win for the Department of Justice, Judge Amit P. Mehta of the United States District Court for the District of Columbia determined that Alphabet's payments of $26 billion to Apple and others to make Google the default search engine blocked competitors from succeeding in the market.

The judge notes that measured by query volume, Google enjoys an 89.2% share of the market for general search services, which increases to 94.9% on mobile devices. This overwhelms Bing's share of 5.5% on all queries and 1.3% on mobile, as well as Yahoo's and DDG's shares, which are under 3% regardless of device type.


Google's distribution agreements are designed to maintain that dominance.

"Google's distribution agreements are exclusionary contracts that violate Section 2 because they ensure that half of all GSE users in the United States will receive Google as the preloaded default on all Apple and Android devices, as well as cause additional anticompetitive harm," writes Judge Mehta.

"When the distribution agreements have created an ecosystem that has a 'strong incentive' to do 'nothing,' is 'resistant to change,' and is 'basically [frozen] in place,' there is no genuine 'competition for the contract' in search."

Here's a summary of the findings in the case...


The judge's ruling in the case against Google concluded that:

1. Google's Monopoly Power: Google holds monopoly power in the markets for general search services and general search text advertisements. The evidence showed that Google has maintained a dominant market share in these markets, often exceeding 90%.
2. Anticompetitive Conduct: Google's use of exclusive agreements with browser developers, mobile device manufacturers, and wireless carriers was found to be anticompetitive. These agreements set Google as the default search engine, significantly limiting the ability of rival search engines to compete. This was further exacerbated by the fact that most users do not change default settings.
3. Foreclosure of Competition: The court found that Google's exclusive agreements foreclosed a substantial share of the market to its rivals, depriving them of scale, which is crucial for improving and innovating in search services.
4. Supracompetitive Pricing: Google's control over the market enabled it to charge supracompetitive prices for general search text ads, which contributed to its substantial profits.
5. Lack of Procompetitive Justifications: Google did not provide valid procompetitive justifications for its exclusive agreements that outweighed the anticompetitive effects.


The court ruled in favor of Google on several key points, where the Department of Justice (DOJ) failed to prove their case:

1. Search Advertising Market: The court found that while there is a product market for search advertising, Google does not possess monopoly power in this market.
2. General Search Advertising Market: The DOJ failed to establish a distinct product market for general search advertising.
3. SA360 and Microsoft's Ad Features: The court determined that Google had no duty to provide feature parity for Microsoft's Ads on SA360. The DOJ did not prove that Google's conduct had anticompetitive effects in this context, as there was insufficient evidence showing that the lack of certain features, like auction time bidding (ATB), significantly harmed competitors or advertisers.
4. Sanctions for Document Preservation: The court declined to impose sanctions on Google for failing to preserve chat messages, noting that this failure did not significantly impact the overall assessment of Google's liability.


You can read the full ruling here. Google plans to appeal the decision.