Federal Judge's ruling could redefine online search
One man, a US Federal Judge, may have just changed the future of online search for decades.
Judge Amit Mehta from the US District Court for the District of Columbia ruled last week that Google acted illegally to maintain a monopoly in online search. “Google is a monopolist,” Mehta said. “And it has acted as one to maintain its monopoly.”
The ruling has the potential to shake-up the landscape of online search—a domain that Google has dominated for years—while also returning more power and choice back into the hands of users about how they search for information on the internet.
In this week’s newsletter, we explore the implications of this ruling, if it could usher in a new era of expanded government regulation over big tech, and how online search might change (and stay the same) in the future.
// The ruling
Last Monday, in a 277-page ruling, Federal Judge Amit Mehta found that Google acted illegally to maintain a monopoly in online search.
- The US Justice Department sued Google in 2020 (along with 35 US states). The lawsuits claimed the tech giant engaged in monopolistic practices to maintain its search engine dominance.
- Google commands a 90% market share of the global search engine market. The lawsuit alleged that such market share was possible because Google made average annual payments of around $10 billion over the last 12 years to firms like Apple, Samsung, and Mozilla to be their default search engine on devices and browsers. According to reporting by The New York Times, Google paid Apple $18 billion in 2021 to keep Google as the default search engine on iPhones, disincentivizing Apple from creating its own competing search engine.
- Almost half of Google’s search traffic comes from Apple devices, and Google’s annual payment made up 18% of Apple’s profit in 2023.
- Upstart search engines, like DuckDuckGo, have complained that Google intentionally suppressed links to their sites and blocked them from gaining further market share.
In Mehta’s decision, he argued that Google was a monopolist for three reasons:
- Its 90% market share is so dominant that it gives Google an unfair advantage in profiting from advertisers.
- The dominance of Google’s particular business model of harvesting user data to sell ads prevents rival search engines that prioritize user privacy from gaining traction, forcing consumers to use a search engine that doesn’t protect their data.
- Google’s payments to other tech companies like Apple amount to buying off of potential competitors and stifling innovation.
But the case is not cut and dry. As The Wall Street Journal Editorial Board argued in an op-ed, the standard for violating antitrust laws for 40 years has been harming consumers, and there isn’t clear evidence that consumers have been harmed, or even would prefer a different product.
Google has vowed to appeal. Kent Walker, Google’s President of Global Affairs, found inconsistencies in Mehta’s logic: “This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available.”
//
“This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available.”
//
// The implications
While Mehta has found Google guilty of monopolistic behavior, he has yet to select a punishment. It’s possible that Mehta will force Google to end contracts with firms like Apple. However, that might have little impact: Apple might still decide on its own to make Google the default browser on its devices.
But the ruling has other implications:
- A new era of regulating big tech: This is far from the only antitrust case against big tech, but the success in this case by the Justice Department might pave the way for more cases in the future. Bill Kovacic, an antitrust law professor at George Washington University and a former chair of the Federal Trade Commission, said the win by the Justice Department could lay the groundwork for future lawsuits. “It's a crucial foundation for the government's current effort to prosecute misconduct by dominant tech companies,” he said.
- Tech firms need to partner wisely: The ruling might lead tech companies to think carefully about partnering together. Herbert Hovenkamp, an antitrust scholar at the University of Pennsylvania, said, “What it signals is that if you’ve got a dominant product, you’ve got to be very careful to make sure that your licensing and contract agreements are open, because making them exclusive can be dangerous.”
- More consumer choice: For those who believe that consumers should have more power and choice over their online experiences, the ruling might lead to fewer default settings and more individual choice. But would more choice lead users to frequent different search engines? There are clues in the EU; It ruled in 2018 that Google needed to provide Android phone users a choice about which search engine to use as their device’s default. European consumers faced with more options ultimately selected brands they already knew—Google’s market share in Europe hasn't changed.
// Changing the competitive landscape of tech
In 1998, the same year that Google was founded, the US Justice Department sued Microsoft for illegally grouping its various products together in a way that stifled competition and reduced consumer choice. The Judge ruled in favor of the Justice Department, and some employees at Google and Microsoft believe that the 1998 ruling against Microsoft actually created a competitive market that enabled Google to become an emerging competitor.
How might this ruling create the conditions for future competition or alter the playing field? Online search is already experiencing a tectonic shift with the rise of AI-powered search.
It’s unclear if AI-powered search is better for consumers, more respectful of their privacy, or even if they’ll prefer it. Perplexity has faced accusations of building its search engine by stealing other people’s work.
// Innovation at the structural level of the internet
The internet is being deconstructed and reconstructed every day. However, there’s a risk that despite changes, the status quo may persist, particularly when innovation doesn’t extend to protocols, governance, and data ownership.
Mehta’s ruling against Google may change the landscape of how people find answers on the internet, but it’s unclear if what will emerge will give users a voice, a choice, and a stake in the future of the internet.
This is the north star driving Project Liberty’s work across our three initiatives: Project Liberty Labs, Project Liberty Institute, and the Project Liberty Alliance. To learn more about our innovations at the structural level of the internet, check out DSNP.
.jpg?upscale=true&width=1160&upscale=true&name=PL_REGULATION%20(1).jpg)
