Federal judge rules Google an illegal search monopoly
A federal court ruled on Monday that Google has illegally maintained a monopoly over internet search, entering into exclusivity agreements to build and maintain its monopoly over search services.
The ruling said that Google “enjoys an 89.2% share of the market for general search services, which increases to 94.9% on mobile devices.” The judgment states that this comes in part because of the technical excellence of Google and its engineers, but also through massive exclusivity agreements where Google pays to be the default search provider at key access points.
The company paid $26 billion in 2021 to device makers, carriers, browser makers, etc. to be the default search engine. Doing so gives Google not only a much bigger share of the advertising market but a vast treasure trove of data that is used to further improve its search performance.
This is of note because Google reportedly pays a huge chunk of that to Apple to be the default search engine for Safari on iPhone and iPad. You can change the default search engine in Settings > Safari, but most users don’t–as is often the case with defaults, most aren’t even aware there are other options.
A years-long federal lawsuit, filed by the Department of Justice and nearly every state’s Attorney General, ended its closing arguments in May of this year.
The court ruled against Google in four distinct ways:
Specifically, the court holds that (1) there are relevant product markets for general search services and general search text ads; (2) Google has monopoly power in those markets;
(3) Google’s distribution agreements are exclusive and have anticompetitive effects; and (4) Google has not offered valid procompetitive justifications for those agreements. Importantly,
the court also finds that Google has exercised its monopoly power by charging supracompetitive prices for general search text ads. That conduct has allowed Google to earn monopoly profits.
In other significant ways, the court found in favor of Google:
The court holds that (1) there is a product market for search advertising but that Google lacks monopoly power in that market; (2) there is no product market for general search advertising; and (3) Google is not liable for its actions involving its advertising platform, SA360. The court also declines to sanction Google under Federal Rule of CivilProcedure 37(e) for its failure to preserve its employees’ chat messages.
No court-mandated remedies or injunctions have been ordered yet. We won’t know exactly what this will mean for the users of Apple products in the future until we have a clearer picture of exactly what the court requires.
It is likely that Google and Apple will be forbidden from entering into a default search exclusivity arrangement in the future, for which Google pays Apple billions per year. It’s quite possible that we’ll see a “choose your default search engine” interface on a future version of iOS, iPadOS, and macOS similar to the “browser ballots” where default web browsers must be chosen.
Apple may even decide that, without billions to be made selling default search access on its platforms, the time is right for the company to make (or acquire) its own privacy-minded web search tools.