By: Sofi Shlepakov
After over a year in litigation, District Court Judge, Judge Amit Mehta, declared a judgment against Alphabet’s Google search engine, stating that it was an illegal monopoly and violated section two of the Sherman Act. On September 6, 2024, there was a secondary judgment that gave the Justice Department until December to outline what penalties Google needs to incur to restore competition to the online search engine market.
The Sherman Anti-Trust Act (“Sherman Act”) was signed in 1890 and was the first congressional measure that prohibited monopoly-style businesses. Specifically, section two of the Sherman Act makes it unlawful for anyone to monopolize any trade or commerce among states or internationally. The unlawful monopolization cannot come about through “improper means”.
Google started up with the name “Buckrub” by Larry Page and Sergey Brin while both were students at Stanford University in 1995. Since then, Alphabet, the holding company of Google, has grown immensely and is regarded to have a net worth of $2041.61B. The Department of Justice commenced litigation in September of 2023 and ended on August 5, 2023. In the decision, Judge Mehta held that econometric evidence was not necessary to prove a monopoly and made his judgment based on evidence of Google paying millions to Apple and Samsung for Google to be their default search engine.
Econometrics is a branch of economics that predicts future trends by using mathematical models to develop and test theories using data that has been acquired. This mathematically based method relies on a large amount of quantitative data to produce reliable results. The issue with using this specific method in determining whether a search engine is a monopoly is that search engines do not produce a great amount of quantitative data. Most of the available data comes from advertisement payments, which ultimately provide limited information.
Payment to Apple, Samsung, and other companies is evidence that was used to show that Google is a monopoly which stretches antitrust laws. In 2021, Google paid $26.3 billion to these companies to be the default search engine, including Apple’s Safari, the default web browser for Apple products. This is the biggest antitrust case since the Microsoft case in the 1990s, which relates to expanding antitrust laws. The difference between these cases is that the Microsoft case concerns control of an industry, while in the Google case, the main issue is about control over information. Now, rather than just looking at economic factors, dominance and control over information may be a factor determining if a technology company is a monopoly. These factors may set a precedent that expands beyond big tech. Generally, monopolies control a whole industry, whereas here, Google’s popularity does not inherently equal monopolistic control. The general public can switch search engines at their discretion.
Antitrust cases against Apple and other cases against Google have been occurring more frequently, showing that these types of cases will expand to other tech companies as the parameters of what makes a company a monopoly are being expanded. Since the judgment now includes social factors, such as popularity and dominance, alongside economic factors to determine monopolies, other tech companies may face monopoly allegations if it seems they hold dominance in a field. It will also now set a precedent for other search engines and technological platforms in how they conduct business and pay third-party companies to advance their growth. This could increase the amount of antitrust cases against other tech moguls and their practices, as it has seemingly opened up a new avenue for antitrust liability.
This judgment opens the discussion to potentially breaking Google up, although that would be unlikely and could take years. Google has already stated it will appeal the judgment, and if it wins on appeal, the power will be given to the big tech companies. If Google wins, then it will show its dominance, and partnerships, are not monopolistic but instead act as a business transaction. This could begin to be a defense for other companies that are alleged to be acting as a monopoly.
Ultimately, Google’s dominance as a search engine will not change anytime soon. Even if the Department of Justice does find a punishment, whether regulatory or financial, it will take years to come into effect — especially if Google appeals. The Department of Justice has until the end of 2024 to decide what damages Google will face. If they decide to break Google up, the repercussions would not be seen right away, as that may take years. It also shows how antitrust laws are changing by introducing new factors to analyze monopolization if the precedent is set that hard econometric evidence is not needed to prove a monopoly.
Student Bio: Sofi Shlepakov is a second-year law student at Suffolk University Law School. She is a staff writer for the Journal of High Technology Law. Sofi graduated from the University of Massachusetts Amherst (UMass) with a double major in Economics and Journalism in 2022.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.
