Unfortunately, it can’t “Google” its way out of this one.
. . .
Google was recently found guilty of violating U.S. antitrust laws. Antitrust laws are laws that prevent businesses from predatory practices. The verdict indicates that Google was attempting to monopolize the web search market by overtaking other search engines like Bing and DuckDuckGo through unfair market practices, instead of offering a superior product.
This case is the most significant antitrust action by the American Department of Justice since the late '90s. It's important to clarify that Google isn't being sued for making money or being successful and innovative; those are not illegal. Instead, antitrust law focuses on two main questions: has Google achieved a monopoly, and has it abused its position to hinder competition?
Government prosecutors had to prove that Google had a monopoly and maintained it unfairly. The case focused on defining the market: if Google showed it operates in a competitive market, it might not be a monopoly. But if the prosecution proves Google dominates and won't lose significant market share, the monopoly claim holds. According to the ruling, that claim was sustained.
The ruling states that Google “enjoys an 89.2% share of the market for general search services, which increases to 94.9% on mobile devices”. However, Google didn’t obtain this market share through fair competition. For example, since its acquisition of Android in 2005, Google's search engine was installed as the default of the operating system. In 2021, Google reportedly spent more than $26 Billion through illegal deals with companies like Apple, Samsung, and Mozilla to have Google as their default search engine. This and many other practices have made Google the most widely used search engine.
You may ask to what end is Google establishing its monopoly? The answer to that is profits. Google reportedly generated $240 billion in revenue last year from web advertisements. This revenue was collected, according to the Justice Department of the US (who sued Google), by charging artificially inflated prices for advertisers.
The punishment
While there’s no final decision, reports suggest that the American Justice Department is considering breaking up Google. This means that services owned by Google like Gmail, Android, Chrome, etc. might be forced to split into smaller independent companies. But that’s not the only option on the table. Google might be forced to share its data with competitors, potentially leveling the playing field and reducing its market dominance. Other remedies could include imposing stricter regulations on Google's business practices to ensure fair competition in the market.
What It Means For Us
In 1998, Microsoft went through a similar trial for having Internet Explorer as its default browser in its Windows operating system. The decision then forced Microsoft to share its API with third-party developers to ensure that other software could operate effectively on Windows. Additionally, Microsoft had to offer consumers more choices by allowing them to remove Internet Explorer from Windows and allowing them to install other Web Browsers. This is also the most likely outcome for Google. One change that might result from this trial is that users can be able to choose their default search engine, and Google will be prevented from making exclusionary deals with device manufacturers.
The US Government has been on a crusade against big tech companies. Although Google is the first to be found guilty of violating antitrust laws in decades, it’s not the only one currently going through trial. Amazon and Apple have also been sued for violating antitrust laws, but a ruling is yet to happen. Considering these trends, it appears big tech companies are now under a watchful eye, and the foundations of their dominance are starting to shake.
