A US federal judge has ruled on an antitrust lawsuit against Google, finding it guilty of illegally monopolizing the search engine market, Bloomberg reports. It is the first major antitrust case against the tech giant in two decades.
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Washington Judge Amit Mehta said Google’s multibillion-dollar deals with Apple and other companies to make Google’s search engine the default search on smartphones and Web browsers effectively block competition in the market. Built-in search has allowed Google to make its search engine the most used in the world and generates more than $300 billion in annual revenue, mostly from advertising.
However, Mehta notes that Google does not have a monopoly on the general search advertising market, noting that competitors such as Amazon, Walmart and other large online platforms have begun offering search-related advertising on their own sites.
«Google’s distribution agreements cover a significant portion of the search market and limit competitors’ opportunities,” the judge said in the 286-page decision. Mehta also noted that Google’s monopoly has allowed the company to continually raise prices for online advertising without any consequences.
The market immediately reacted to the situation. After the decision was announced, shares of Alphabet, Google’s parent company, fell 4.5% to $159.13. Shares of Apple, which could lose billions of dollars from payments to Google for setting the default search engine on the iPhone, fell 5.8% to $207.14.
The judge plans to hold a separate hearing to determine sanctions against the company. The US Department of Justice has not yet said what changes it will seek, but possible options include separating Alphabet’s search business from other products such as Android or Chrome. The decision could be the largest forced breakup of a US company since the identical dissolution of US multinational telecommunications conglomerate AT&T in 1984.
The US Department of Justice has not yet commented on the court’s decision, and Google did not respond to Bloomberg’s request for comment.