DOJ, states win Google search antitrust case

The Justice Department and several dozen state attorneys general won a sweeping victory against Google Monday as a federal judge ruled that the search giant illegally monopolized the online search and advertising markets over the past decade.

In a 286-page ruling , U.S. District Judge Amit Mehta in Washington, D.C., ruled that Google locked up some 90 percent of the internet search market through a partnership with Apple to be the default search provider in its Safari web browser, alongside similar agreements with handset makers and mobile carriers such Samsung and Verizon. Mehta also found that Google disadvantaged Microsoft in the market for ads displayed next to search results, allowing it to illegally dominate that market as well.

“Google is a monopolist, and it has acted as one to maintain its monopoly,” Judge Mehta wrote.

Google's head of global affairs Kent Walker said the company plans to appeal.

“This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available,” he said in a statement.

“This victory against Google is a historic win for the American people,” said Attorney General Merrick Garland. “No company — no matter how large or influential — is above the law. The Justice Department will continue to vigorously enforce our antitrust laws.”

The ruling, which follows a 10-week bench trial that wrapped up in November, is a major vindication for the bipartisan fight against the dominance of a handful of large tech companies — a battle that started in the Trump administration and has continued even more forcefully under President Joe Biden.

Filed in October 2020, in the waning days of the Trump administration, it was the first major antitrust case against a large tech company since the federal government sued Microsoft in the late 1990s. The ruling is a boon to a series of lawsuits filed in the ensuing years against Meta, Amazon, and Apple as well a second one aimed at Google.

The ruling “provides a historic boost to the antitrust authorities' endeavor to rein in the abuse of market power by Google and other dominant tech companies and will have a similar landmark effect as the government's challenge to Microsoft more than 20 years ago,” said Florian Ederer, a Boston University professor who teaches antitrust and economics. “The win also signals that the antitrust laws that were created over a hundred years ago can still work today.”

Mehta’s ruling, which focused solely on whether Google broke the law, now sets up the thornier question of how to fix the problem. A separate trial will now take place on a remedy.

The DOJ has been mum about what it wants, saying it is focused on the initial phase and any requests will be tailored to the court’s opinion. Antitrust chief Jonathan Kanter however has repeatedly expressed support for so-called structural remedies, which typically means a break up of some kind. The DOJ also wants any fixes to limit anticompetitive conduct in developing technologies, particularly artificial intelligence.

“This landmark decision holds Google accountable. It paves the path for innovation for generations to come and protects access to information for all Americans,” Kanter said in a statement.

The yearslong case centers on a series of revenue-sharing agreements, worth tens of billions of dollars annually, that Google has with Apple, Mozilla, Samsung and others. Those make Google the default search engine on web browsers and mobile phones, giving it control of the ads that populate search results, and giving it data that helps it improve search quality.

Google does not disclose the exact value of the deals, but information made public through the trial puts that figure at more than $26 billion in 2021 alone, much of which went to Apple. The DOJ says these contracts have hindered the ability of rivals to compete and deprived consumers of the benefits of high-quality, innovative services that only competition can foster.

Walker focused on Mehta's conclusion that Google had developed "the industry's highest quality search engine" while ignoring the accusation that it built it via "exclusionary contracts" that foreclosed competition, denied rivals of scale and raised high barriers to entry.

"As this process continues, we will remain focused on making products that people find helpful and easy to use," he said.

Mehta, appointed by former President Barack Obama, also sharply criticized Google’s approach to preserving its internal communications. He pointed to a policy of having internal chat messages deleted after 24 hours unless an employee turns on a setting to save them. “The court is taken aback by the lengths to which Google goes to avoid creating a paper trail for regulators and litigants,” the judge wrote, also referencing a Google “Communicate with Care” initiative to designate many communications as legally privileged.

Mehta said Google failed to take steps to keep its relevant chat messages until the suit at issue had been underway for two years. He ultimately declined a request from the federal and state governments to punish the company, saying the lost messages wouldn’t have impacted his analysis, but he gave the firm and its lawyers a tongue lashing. “Any company that puts the onus on its employees to identify and preserve relevant evidence does so at its own peril. Google avoided sanctions in this case. It may not be so lucky in the next one,” he wrote.

The ruling is a vindication for Kanter, the attack-dog attorney whom President Joe Biden installed as the head of the DOJ’s antitrust division. Kanter helped build the case, initially filed under former President Donald Trump's administration, from his position as a private lawyer working outside the government.

Further, the DOJ is succeeding where the Obama administration declined to sue in 2013, when enforcers considered evidence that Google was becoming a digital behemoth.

The case is far from over. In addition to remedy proceedings, Google’s appeals will likely add years to the case. However the company cannot automatically appeal the current ruling unless given permission to do so by the court.

Josh Gerstein and John Hendel contributed to this report.