What Happens Now That Google Is Declared a Monopolist?
Yesterday, the Washington, D.C. District Court ruled that Google is a monopoly, dealing a historic blow to one of the largest technology companies. In an opinion issued Monday afternoon, U.S. District Judge Amit Mehta said the company violated Section 2 of the Sherman Act and said that “Google is a monopolist and it acted as one to maintain its monopoly.”
At first glance, this decision has nothing to do with Android, YouTube or any of the other services that have helped the company dominate the market over the years. Rather, the focus is on the oldest business of all: search. After it was revealed earlier this year that the company had paid billions to make Google the default search engine in Safari and other browsers, a court ruled that “Google’s distribution agreements are exclusive and have anti-competitive implications.”
The seriousness of the claim means Google probably won’t be able to simply pay for it. If you remember the fallout from the antitrust case against Microsoft’s Internet Explorer strategy in 2001, you already have an idea of how this could all play out.
But 23 years have passed since then, Google is now much bigger than Microsoft was at the turn of the millennium, and there’s a good chance it’s deeply embedded in your life. Here’s my best guess as to what will happen next and how Google’s antitrust decision could affect you.
Is Google’s antitrust decision final?
Probably no! While Judge Mehta’s decision was hailed by the White House as a “victory for the American people,” Google has already said it plans to appeal. In a statement posted to X (formerly Twitter), Google’s president of global affairs, Kent Walker, said the company’s dominance is simply a natural result of the quality of its search engine. millions of iPhones and instead focused on the snippet, according to Mehta, who calls Google search “the highest quality search engine in the industry.”
“This decision recognizes that Google offers a better search engine,” Walker said in a statement, “but concludes that we should not be allowed to make it readily available.” The executive says Google “will remain focused on building products that people find useful and easy to use” until the appeal process is completed.
What penalties can Google face?
Because this week’s ruling focused on determining guilt, penalties will likely be imposed in a separate trial. But just as Microsoft had to negotiate with the Department of Justice to change its business strategy in 2001 , Google will likely back out with more than a fine (though the fine will likely still apply).
Once the dust has settled, you may well open Safari or Firefox to a screen prompting you to choose a default search engine, rather than the browser simply choosing Google for you. The EU already has a similar browser selection process in place on both iPhone and Android , but it’s unclear exactly what the user interface might look like and what alternatives might be highlighted.
While the solution may be a set-it-and-forget-it solution, it would be a big boon to alternative search engines, including Microsoft’s Bing, which Mehta says sees only “roughly 6% of all searches” in the US despite the second place on the market. It’s also possible that Apple will seize the opportunity to create its own search engine , as Bloomberg reporter Mark Gurman said last year the company was toying with the idea. While Apple has so far had little incentive to continue developing the project, advertising revenue from the domestic search engine could help recoup money lost in the $20 billion Google deal that will almost certainly end if Google’s appeal fails. (Gurman suggests that an Apple-developed search engine could generate ad revenue rivaling the Apple Watch.)
Will Apple be attacked next?
Like Coca-Cola to Google’s Pepsi, it’s reasonable to assume that Apple could be the next target of trust watchdogs. The iPhone maker is currently considering a lawsuit filed in March accusing it of monopolizing the smartphone business, although the details of the case may be too different from Google’s to serve as a precedent.
The Justice Department’s case against Apple concerns how it restricts third-party services on its platform, while the case against Google was actually about its dealings with competitors. Essentially, Apple is being prosecuted for blocking competition in its product suite, while the charges against Google are more about collusion with competitors.
Like Apple, Google’s business has expanded beyond search into the Android operating system, physical phones, its own browser, YouTube, maps and more, but the court’s charge of monopoly was not related to the number of companies Google bought or the markets it she owns it. cornered. Rather, it was about how one aspect of its business—search—interacts with other companies. When Google began paying Apple, Mozilla and others to advertise its search engine, the company faced accusations of anti-competitive behavior.
Apple will likely suffer the loss of Google’s $20 billion annual payout, but the case itself does not set a dangerous precedent for a similar lawsuit. His own DOJ case is the third it has faced in 14 years, and the DOJ’s concerns are more similar to those emanating from Europe than to those highlighted in Judge Mehta’s ruling. It remains to be seen how receptive American courts are to this type of complaint.
Could this affect the launch of the Pixel 9?
Google doesn’t need that kind of bad press right now. The company’s next smartphone, the Pixel 9, is set to debut in a week , and you can bet it will heavily promote Google services during the presentation.
However, any fallout from yesterday’s decision is unlikely to impact the upcoming launch as penalties are yet to be determined and Google must be given time to appeal. Given Walker’s announcement, it appears the company plans to continue business as usual in the meantime.
And regardless of the end result, Google’s own products are unlikely to suffer from the decision in the long term, since Mehta’s main concern is the company’s payments to other device makers. Since Google already owns the Pixel brand, it will likely be able to continue running its own services by default on the devices it makes. This also applies to the Chrome browser, but the situation may change depending on how the Justice Department’s lawsuit against Apple develops.
Unexpected blow to AI
Surprisingly, the biggest casualty of this decision may not be Google’s search engine, but its artificial intelligence efforts. That’s because the data the company gained from its search monopoly could then be used to train its AI. If Google loses its lead in search, it will put one of the largest data providers at risk.
However, it’s unclear exactly how Google creates its AI training datasets. Although the company has incorporated artificial intelligence into its user discovery process , itsprivacy policy does not specify the full scope of the “information” it uses to train the artificial intelligence, only promising to anonymize user data before using it elsewhere. There are exceptions—for example, the company said it only uses Workspace data to train features like spell checking and smart typing—so it’s hard to say how far-reaching the impact of this decision might be.
What we do know is that marketers will be watching this case closely. In a statement emailed to press including CNN and NPR , Emarketer senior analyst Evelyn Mitchell-Wolf said Google’s “ubiquity is its greatest strength, especially as competition intensifies among AI-powered search alternatives.”