US Judge Rules Google Holds Illegal Monopoly in Search and Advertising Markets

A federal U.S. judge has issued a ruling stating that Google has held an illegal monopoly in the areas of search and text advertising. This significant development comes as a result of a landmark case filed by the government in 2020, which alleged that Google maintained its share of the general search market by creating barriers to entry and a feedback loop that sustained its dominance. The court found that Google's actions violated Section 2 of the Sherman Act, which prohibits the existence of monopolies.

First Anti-Monopoly Decision Against a Tech Company in Decades

This ruling marks the first anti-monopoly decision against a technology company in decades. Judge Amit Mehta of the U.S. District Court for the District of Columbia, who presided over the case, wrote in the decision, "Google is a monopolist, and it has acted as one to maintain its monopoly." The court focused on Google's exclusive search arrangements on Android and Apple's iPhone and iPad devices, stating that these practices contributed to Google's anticompetitive behavior and dominance in the search markets.

The court's definition of general search services included Google's core search engine, where it traditionally competed with Yahoo. Additionally, general search text advertising refers to the text ads that accompany search results. The court ruled that Google operated as a monopoly in both of these areas. However, the ruling found that general search advertising does not constitute a separate market, therefore, there cannot be any monopoly control in this regard. Furthermore, the court did not penalize Google for failing to preserve chat messages from its employees.

The legal action against Google was initiated by the Department of Justice and a bipartisan group of attorneys general from 38 states and territories, with Colorado and Nebraska leading the way. Separate but similar antitrust suits were filed against Google in 2020. These suits were subsequently combined for pretrial purposes, including the discovery of evidence.

Impact on Alphabet and Global Stock Market

Following the ruling, Alphabet's shares experienced a decline of over 4%, reflecting a broader downtrend in stocks worldwide. The Justice Department did not provide an immediate comment on the ruling, and Google did not respond promptly to requests for comment.

This ruling marks a significant development in the ongoing legal battles faced by Google regarding its market practices. The implications of this ruling are likely to have far-reaching effects on the company's operations and its standing in the market. The case will continue to unfold as both sides respond to the court's decision and any potential appeals or further legal actions take place.