The search giant Google controls about 90% of the online search market and 95% of the smartphone market, making it difficult for many competitors and limiting variety for users. US District Judge Amit Mehta said the court concluded that Google is a monopolist. In 2021 alone, Google spent 26.3 billion USD to make its search engine the default choice on smartphones and web browsers, eliminating competition and cementing its monopoly position.
The ruling paves the way for a second trial to determine potential remedies for the violations, possibly including breaking up Google’s parent company Alphabet, which would change the landscape of the online advertising world that Google has dominated for years. The remediation phase could be lengthy, with Google likely to submit appeals to the US Court of Appeals and the US Supreme Court. The legal battle could be extended to 2025, or even into 2026.
Alphabet said it would appeal Judge Mehta’s ruling. On August 5, shares of parent company Alphabet fell 4.5% amid a broader tech stock market decline. Google advertising accounted for 77% of Alphabet’s total revenue in 2023. Meanwhile, US Attorney General Merrick Garland described the ruling as a historic victory for the American people, emphasising that “no company — no matter how large or influential — is above the law.”
The two tech giants Google and Apple were not only accused of maintaining monopolies in the US but were also criticised by Japan for dominating the app market. In June, the Japanese parliament enacted a law to promote competition in the mobile app market, curbing the dominance of Apple and Google and forcing them to compete fairly with smaller rivals, which would benefit consumers and encourage innovation.
Under the new law, Apple and Google will no longer be allowed to prevent third parties from selling and operating apps on their platforms. Specifically, the law will prohibit the providers of Apple’s iOS and Google’s Android smartphone operating systems, app stores, and payment platforms from preventing the sale of apps and services that directly compete with those of the native platforms.
Violations of the new law will result in penalties of up to 20% of the domestic revenue of the service found to have breached the rules. The fine could increase to 30% if the companies fail to cease their anticompetitive practices. The new law, which is expected to come into effect by the end of 2025, is seen as similar to the antitrust rules used by the European Union (EU).
The EU previously opened an investigation into whether tech companies Apple, Google and Meta have breached the EU’s new Digital Markets Act (DMA). This is the first investigation launched under the DMA, which came into effect in early March and is aimed at preventing tech giants from controlling digital markets. The DMA is a broad set of rules targeting large tech companies that provide core platform services, which it labels as “gatekeepers”, requiring them to comply with a range of regulations. Violating the DMA rules could result in hefty fines.
Italy recently announced an investigation into Google and its parent company Alphabet over unfair commercial practices involving users’ personal data. The Italian antitrust authority alleges that Google’s method of obtaining user consent could give the company unfair access to users’ personal information, without allowing them to opt out or modify their terms.
The watchdog said that Google’s consent requests might be misleading in commercial terms. Under Italian law, companies that violate consumer rights rules can face fines ranging from 5,000 to 10 million EUR. The Turkish competition authority also recently fined Google nearly 15 million USD for violating a ban on its hotel search market. Previously, two technology giants Google and Apple were fined in the Republic of Korea for violating location data laws.
It can be seen that many countries had already “blown the whistle” or taken strong action against large technology companies before the US judge ruled that Google had violated antitrust laws. Antitrust is necessary to ensure fair competition between economies and prevent technology giants from going beyond the control of the state.
