Today, we have released a new YNH Exclusive article into Google's loss in a landmark antitrust case yesterday, with a federal judge deciding that the company has monopolized the search engine and online advertising market. Let's dive in!
Also, we have released a new Deep Dive today about vice president picks in the US Elections race. Check out the article by journalist Mihir Gupta here.
Contents:
Federal Judge Amit Mehta decided on Monday that Google has violated United States antitrust laws with its search engine in a historic case against the Department of Justice. In a 277-page ruling, he confirmed that the court's final decision was that "Google is a monopolist, and it has acted as one to maintain its monopoly."
The antitrust case was filed in 2020, during the time when Trump was in office, and sued Google for being anticompetitive in the search engine market. According to the ruling, Google spent tens of billions of dollars to monopolize the market with numerous contracts that gave the company exclusive access to become the default search engine across devices across Android and Apple. The ruling included that Google maintains an 89.2% market share for general online search services and a staggering 94.9% market share on mobile devices. According to investment firm BOND, the search engine handles around 8.5 billion queries per day worldwide. Due to its massive market share and incredible amount of daily queries, Google was then able to charge advertisers sky-high premiums due to company's complete monopoly.
What evidence do we have that Google monopolized the market? Here's one example. According to the Financial Times, Google paid a certain percentage of its revenue from search advertising to Apple to automatically lead customers to use Google Search by default-- and the payment reached an astounding $20 billion in 2022. Also, Google didn't just do this with Apple. If you take a look at the browser on your device, it is most likely that the browser will default you to Google because of their contracts with huge tech companies-- Apple's Safari, Google's Chrome, and Mozilla's Firefox all default to Google as their search engine because of the contracts detailed above.
Only Microsoft browsers like Edge and the now outdated Internet Explorer default to a different search engine-- Microsoft Bing, naturally. Microsoft is looking into creating a possible similar contract for Bing after this trial, with less exclusive rights, as Google's contract with Apple will be heavily impacted. However, since Google has better search advertising, a deal with them benefits Apple more because they get more money from the same percentage of advertising revenue. This is the exact reason why Apple has not developed a search engine of their own-- it would lead to a loss of revenue due to the massive contract they have with Google. This new ruling may motivate them to create one, though, if their contract with Google becomes unprofitable and they feel that a search engine of their own could generate more revenue.
Technically, the monopoly ruling only applies to Google's actual search engine and the text advertisements affiliated with it, as the court couldn't find conclusive evidence to prove that Google was monopolizing the entire search advertising market. Due to the fact that other search engines like Yahoo, Microsoft Bing, and DuckDuckGo were being blocked off by Google's monopolizing contracts, it boosted the company's online advertising.
The White House stated that the ruling was "a victory for the American people," as it is only the beginning of the government's crackdown on monopolies in the United States market. Google was already defeated in a different antitrust case late last year for monopolizing the app market on Android devices with their Play Store, and another antitrust case, headed by the Biden administration, is currently ongoing against the company.
Monopolization has become a serious issue in the United States today, with huge companies running monopolies in every industry from technology and internet services to oil drilling. Despite the numerous antitrust cases going on against Big Tech companies like Apple and Facebook, this is the biggest antitrust case in the technology sector since the major one against Microsoft in 2000, which was a topsy-turvy case that was really the first violation of the country's Sherman Antitrust Act. The government ended up finding Microsoft guilty of violating the act and ordered the company to split up into two parts, but Microsoft appealed the decision, won, and was ultimately given a less severe penalty.
As for Google's penalties, they could range from very severe to more easygoing. In the case of internet provider AT&T, they were forced to completely break up the company into various separate entities in 1982, but that is really a worst-case scenario type of situation. Along with some fines, Google's existing contracts with technology companies that give them exclusivity will certainly be affected, in addition to its capability to create new contracts with those companies. They will definitely be forced to give users more options-- one law professor at Vanderbilt University told CNN that one possibility would be that Google may have to add a “choice screen” that would clearly inform users that there are other available search engines apart from Google.
All in all, the biggest losers from this case are Google and Apple, while the biggest winner is Microsoft. Google was obviously benefiting tremendously from this entire monopoly in the search engine market, while Apple was profiting off of Google's exclusive contracts with them as Apple implemented Google to become Safari's go-to search engine. Meanwhile, Microsoft will now be able to grow its search advertising revenue as Google's monopolization is stopped, allowing them to make new deals with companies like Apple and Mozilla to offer Bing as a more prominent option as a default search engine. However, Google's president of global affairs, Kent Walker, has stated that the company plans to appeal the decision-- and as we have seen from the Microsoft case of 2000, it could very well end up impacting the final impacts of this decision on Google and its services.
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Great article like always. 👍🏽😊😄
Awesome job Armman!
I love everything 👌🏾