What you need to know
- A federal judge has ruled that Google's payments to other companies to make its search engine the default option on smartphone web browsers violate US antitrust law.
- The decision came on Monday afternoon in a 286-page ruling, and gives the Department of Justice a significant victory over the tech firm.
- The case is centered around $26.3 billion Google paid in 2021, which has given the company a significant edge over competitors like Microsoft with its Bing search engine.
- Notably, the ruling has only determined that Google is guilty. It doesn't include details about remedies, so how this decision will affect Google's business is currently unclear.
A federal judge has ruled that Google's payments to make its search engine the default option on smartphone web browsers like Safari were illegal. The decision came on Monday afternoon, giving the US Department of Justice (DOJ) a major victory in its case against the Alphabet Inc. subsidiary.
"After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly," reads a statement from Judge Amit Mehta in the 286-page ruling. "It has violated Section 2 of the Sherman Act."
The DOJ's suit targets Google's $26.3 billion in payments made to various different tech companies in 2021, resulting in Google being made the default search engine on smartphones. This has given the firm's business a significant and distinct advantage over competing engines, the most notable of which is arguably Microsoft's Bing.
In the ruling, Mehta went on to say that these payments have allowed Google to effectively monopolize search on mobile platforms, and that that "has enabled Google to increase text ads prices without any meaningful competitive constraint.” Google itself is — by far — the most popular search engine in the world, with the company behind it pulling in hundreds of billions of dollars in revenue.
What this decision means for Google isn't precisely clear yet, as the document that contains this first ruling only focuses on the company's guilt. Even so, any potential remedies will surely serve to bolster the position of Microsoft and other competitors in the search market.
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Analysis: A big win for Microsoft and Bing
While this is undoubtedly a huge loss for Google, it's also a gigantic win for Microsoft, which stands as the biggest competitor to Google with its Bing search engine. Though Microsoft has been more successful in its efforts to challenge Google's supremacy over the market than others, it's still struggled to significantly disrupt it. This ruling, however, has paved the way for that to possibly change in the future.
Smartphone search undoubtedly represents a colossal portion of search engine use overall, and depending on what remedies Google and its partners have to make, Microsoft could get an opportunity to capture a significant part of it with Bing. It won't be easy — Google's monopoly stretches back decades, making it the search engine to use — but the odds of Bing and other engines gaining traction are certainly a lot higher than they were yesterday.
