A US court in Washington ruled in August 2024 that Google illegally monopolised the search market. This gives the first win to the government in its anti-trust case against a tech giant in more than two decades.
The court referred to the $26 billion in payment to make its search engine the default option on the smartphones and web browsers. This move by Google effectively blocks any other competitor from succeeding in the market. Such monopolizing by Google has been able to raise consistently the prices of online advertising. The distribution agreements foreclose a substantial portion of the general search services market and impair the opportunities for the competitors. The default position has allowed Google to build up the most-used search engine in the world and Google could attract more than $300 billion in annual revenue largely generated by search ads.
The Justice Department will continue to enforce vigorously the anti-trust laws. Google plans to appeal the decision.
The Judge passed a harsh comment, “Google is a monopolist and it has acted as one to maintain its monopoly.”
Such a significant ruling was passed against Microsoft in the 1990s when the company bundled its browser as the default browser in Windows-based devices. It crowded out Netscape, the pioneer in browsing technology. The US authorities took notice, and a landmark decision against Microsoft was passed. Microsoft avoided the specter of breakup (since prior to this, AT&T and IBM were badly hit by breakup).
The US authorities could ask Google to share data. It can affect Google’s finances adversely. If competitors get access to similar data, advertisers will diversify ad spends across multiple platforms. It will result into a potential decline in Google’s advertising market share. Besides, there could be costs associated with sharing data. Even while sharing data, privacy cannot be compromised, and hence Google will have to work with stakeholders, regulators and privacy advocates.
There could be another remedy — divestiture or selling parts of the firm. It is a structural remedy. There could be a ban on the practice of paying billions to make Google a default search engine. A choice could be given to users. However, this is like shutting the stable after the horse has fled. Even the users can exercise choice in favour Google.