Google loses its biggest antitrust case against the DOJ

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A federal district court ruled Monday that Google engaged in monopolistic conduct when it paid to provide an automated search engine to other mobile technology companies, in a win for the Justice Department.

Google has paid $26.3 billion to other companies, mainly Apple and Samsung, by 2021, Bloomberg reports. Those fees actually limited competitors’ abilities to succeed, the DOJ argued.

Apple, which made billions from its search engine deal with Google, saw its stock drop 6.7% on the news. Automatic search engine revenue makes up a large part of Apple’s Services business, which Apple is counting on to recover from a slump in the smartphone market.

The court has not yet decided on the penalties against Google, but this decision may be a major blow to the visibility of Google Search. Most of Google’s revenue comes from its search ads, which generate an estimated $160 billion to $175 billion annually. As such, Google stock fell 4.6% when the court’s decision was announced.

“[T]the court concluded that Google violated Section 2 of the Sherman Act by maintaining its monopoly on two product markets in the United States—traditional search services and traditional text advertising—through its exclusive distribution agreements,” district court judge Amit Mheta wrote in the letter. decision.

The Sherman Act prohibits “every contract, combination, or conspiracy in restraint of trade,” as well as any “excess monopoly, attempted monopoly, or conspiracy or combination to monopolize.”

For years courts have weighed antitrust cases on whether or not consumers were offered (often at low prices) the defendants’ actions. But courts are more willing to view alleged antitrust practices for their effects on market competition. In Google’s case, the ruling suggests that the company has used its vast wealth to block smaller search engines from gaining exposure to mobile search and search advertising markets.

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