Almost a quarter-century after an antitrust ruling against Microsoft reshaped the business landscape of tech industry, a landmark judgment by the U.S. District Court for the District of Columbia against Google over its anti-competitive practices could now lead to a new precedent on how Big Tech firms conduct their business affairs. The roughly three-year-long legal process — which began with the discovery procedure in January 2021 after the court consolidated two lawsuits, United States vs Google and Colorado vs Google, that led to a nine-week bench trial in September 2023 — concluded on August 5. U.S. District Judge for the District of Columbia, Amit P. Mehta, wrote that “Google is a monopolist” and that it has violated Section 2 of the Sherman Antitrust Act by stifling competition to protect its monopoly position. The search giant was accused of using its dominant position in the online search market by cutting exclusive deals with smartphone makers such as Apple and Samsung so that they can pre-load Google search on their handsets as a default search engine.
While Google plans to appeal the ruling, the U.S. Department of Justice has not yet indicated what remedy it will ask for. Both parties have been called to discuss and find a remedy ahead of their meeting with Judge Mehta on September 6. The remedy could range anywhere from breaking up Google to eliminating exclusive agreements between the search giant and handset makers. The former will fundamentally change the structure and nature of digital businesses as Google is linked to a range of digital services. The latter, on the other hand, could immediately wipe out a revenue stream for handset makers; particularly Apple could end up losing billions of dollars if Google is ordered to terminate its exclusive deal with the iPhone maker. This hefty annual payment disincentivises firms such as Apple and Samsung from building their own rival search engines. Separately, terminating such deals can help consumers find alternative search engines as opposed to getting one pre-loaded in their smartphones. The effectiveness of these alternative search engines can only be assessed over time, as scale and the amount of data that goes into them will play a key role in optimising them for richer user experiences. Lastly, these changes could make Google build a better product that is focused on user privacy. Regardless of the directions the remedies take, this ruling will have a huge impact on a series of antitrust cases that are underway against Big Tech firms such as Meta, Amazon, and Apple for their monopolistic business practices.
