Alphabet’s Google lost the biggest antitrust challenge it faced this summer when a US judge found that it illegally monopolised the search market. Now it’s facing the possibility that the result will be a forced breakup of the company.
State attorneys general and the US Justice Department said they are considering asking Judge Amit Mehta to force Google to sell off parts of its business in what would mark the biggest forced breakup of a US company since AT&T was dismantled in 1984. Mehta will oversee a trial set for April 2025 on proposed remedies for illegal monopolisation.
Mehta of the US District Court for the District of Columbia ruled that US$26 billion ($34.9 billion) in payments that Google made to other companies to make its search engine the default option on smartphones and web browsers effectively blocked any other competitor from succeeding in the market. Mehta’s ruling came after a 10-week trial in 2023 — the first on monopolisation charges to pit the federal government against a US technology company in more than two decades.
The case is one of several antitrust actions against big tech companies being pursued by the administration of President Joe Biden, which has made promoting competition in commerce central to its economic policy.
What was the case against Google?
The Justice Department and attorney generals alleged that Google, whose search engine controls nearly 90% of online queries, has paid billions of dollars to maintain a monopoly over the search market via agreements with tech rivals, smartphone manufacturers and wireless providers. In exchange for a cut of advertising revenue, those companies, including Apple and Samsung Electronics Co, agreed to set Google as the default on browsers and mobile devices. The deals locked up key access points, the plaintiffs alleged, preventing rival search engines such as DuckDuckGo or Microsoft Corp’s Bing from gaining the volume of data they need to improve their products and challenge Google.
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Mehta found that Google illegally monopolised the market for general search services and search text advertising — the ads that appear at the top of the search results page. “Google’s distribution agreements foreclose a substantial portion of the general search services market and impair rivals’ opportunities to compete,” the judge said. As a result of its monopoly, Google has been able to increase prices for text advertising without constraints, he found.
What happens now?
Mehta’s decision focused solely on whether Google broke antitrust laws. The trial set for April is meant to focus on how to remedy Google’s illegal conduct.
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In an Oct 9 filing, the Justice Department said it is considering whether to propose a breakup of Google. The agency is expected to make a fuller proposal on Nov 20. The 32-page document lays out a framework of potential options for the judge to consider, including forcing Google to sell off the Android operating system and Google Play Store or Google’s web browser Chrome, requiring Google to share more data with competitors, and a ban on the exclusive contracts at the centre of the case.
The Justice Department said it is also considering measures to prevent Google from using its search dominance to gain an unfair advantage in artificial intelligence products.
The agency and states have settled on recommending that Google be forced to sell off Chrome if other efforts to improve the market aren’t successful, Bloomberg has reported. They plan to suggest that Google be required to license both its search data and results to help rivals and AI start-ups and give advertisers more information and control over where their ads appear. The browser could be worth as much as US$20 billion.
What has Google said?
Google said it plans to appeal Mehta’s ruling. The company noted that Mehta’s decision states that Google is “the best search engine in the US” and has “superior product quality” because of its investments in innovation.
While the company acknowledges that it pays for its search engine to be pre-installed on mobile phones and browsers, it says those deals are benign, likening them to deals that cereal companies make with grocery stores for prime shelf space. Google’s representatives have repeatedly said that competition is just “one click away.”
What are antitrust laws?
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They are meant to protect competition in commerce. In the US, it’s not illegal to be big and powerful; gaining a monopoly position from superior products or better management is considered a reward for success in the marketplace. However, it’s illegal for a monopoly to take predatory steps to stop rivals that might threaten its dominance. Any attempts to illegally maintain a monopoly is fair game for antitrust enforcers and could result in penalties or a forced breakup.
What other antitrust cases does Google face?
Led by Texas, 16 states plus Puerto Rico sued Google in 2020, saying it monopolises the technology underlying online advertising. A trial has been scheduled for March 2025. The Justice Department filed a separate antitrust suit against Google over its advertising technology business in January 2023. That case went to trial in September 2024 and closing arguments are set for Nov 25.
A federal jury found that Google illegally sought to maintain a monopoly over app distribution through its Google Play store on mobile devices. A judge has ordered the company to lift restrictions that prevent developers from setting up rival marketplaces and billing systems that compete with its Google Play Store. Google plans to appeal.
Three dozen state attorneys general sued Google in July 2021, saying it illegally abused its power over the sale and distribution of apps through the Google Play store on mobile devices. Google tentatively settled that case for US$700 million, but a federal judge has yet to approve the deal amid concerns it doesn’t resolve the allegedly anticompetitive conduct.
Where else are Google’s business practices under scrutiny?
Europe, mainly. Since 2010, when the European Commission received its first formal complaint against Google’s competitive practices, the company has received a trio of penalties totalling more than EUR8 billion ($11.3 billion). Google continues to fight those fines, including a landmark EUR4.34 billion penalty for how it runs its Android mobile operating system, in the courts. In June, the EU made additional charges against Google, accusing it of favouring its advertising technology business to the detriment of adtech rivals, advertisers and online publishers, and told it to divest the entire division.
In March, the EU’s Digital Markets Act went into effect on Google and other designated “gatekeepers” of the online economy. Under the act, they won’t be allowed to favour their own services over those of rivals on their platforms, will be barred from combining personal data across their different services, and will be prohibited from using data they collect from third-party merchants to compete against them. The European Commission, the EU’s executive arm, has opened a probe into whether Google is complying with the new rules in connection with its app store and search engine.
What other antitrust cases has the Biden administration pursued?
Biden’s administration has accelerated an anti-monopoly crackdown that began under then-President Donald Trump. In the final months of the Trump administration, the Justice Department filed the first lawsuit against Google, and the Federal Trade Commission (FTC) filed a suit against Facebook, accusing it of illegally maintaining a monopoly on personal social networking in part by acquiring rivals Instagram and WhatsApp; the FTC seeks the breakup of Facebook parent Meta Platforms.
Those actions, continued by Biden officials, are the biggest antitrust moves against tech giants since the US sued Microsoft in the 1990s, leading to an eventual settlement in which the company curtailed some business practices.
Last year, the FTC sued Amazon.com for monopolising online marketplace services by degrading quality for shoppers and overcharging sellers. In March, the Justice Department filed suit against Apple for blocking rivals from accessing hardware and software features on its popular devices. — Bloomberg Quicktake
