The American digital giant has been found guilty of anti-competitive practices concerning its search engine, notably via contracts imposing it as default software on devices, according to a decision handed down Monday by a Washington judge.
According to documents seen by AFP, the judge said that “after carefully studying the testimony and evidence, the court came to this conclusion: Google is a monopoly and it has acted in such a way as to maintain this monopoly.”
A new hearing will determine the amount of the fine imposed on the company.
The Mountain View, California-based company was accused of paying tens of billions of dollars, up to $26 billion last year alone, to ensure that its search engine was the default on a number of smartphones and Internet browsers, with most of that money going to Apple.
“The distribution agreements signed by Google preempt a significant share of the search engine market and prevent its rivals from having opportunities to compete with it,” the judge justified in his decision.
Already battered by the fall in global financial markets, shares in Alphabet, Google’s parent company, have increased their losses and closed down 4.61% at the close of trading on Wall Street, at 160.64 US dollars.
In a statement, U.S. Attorney General Merrick Garland called the decision “a historic victory for the American people. No company is above the law, and the Department of Justice will continue to enforce our laws against anticompetitive practices.”
Asked by AFP, Google had not yet responded.
“Universally accessible and useful”
The US Department of Justice considered that the distribution agreements violated competition law, considering these contracts illegal, while its search tool is already ultra-dominant on the market.
During the trial, which ended in early May in Washington, the judge expressed doubts about the government’s case, but also about Google’s defense, wondering how a rival search engine would be able to pay a high price to Apple to obtain a privileged position on its devices.
Google also assured that searches carried out on Amazon, Facebook and Expedia (tour operator) were competitors to its search engine, making the tech giant’s position much less important.
For the competition authorities, the relevant market is that of general Internet searches – Google holds 80% of this in the United States.
“Harmful for Google”
According to the Statcounter website, Google’s search engine represented more than 90% of the global market at the beginning of July, and even more than 95% of searches carried out on smartphones.
The search engine is an important part of the group’s business model, since in 2023 it represented more than $175 billion in advertising revenue, out of a total turnover of $307 billion.
But it also serves as a gateway to Google’s related services and showcases videos from its YouTube platform, which add $62 billion in advertising revenue.
“Google’s loss is huge. If there were a divestment requirement, it would cut Google off from its main source of revenue. Even banning these distribution deals could be detrimental to Google,” Emarketer analyst Evelyn Mitchell-Wolf said in a commentary.
It is the first time that US competition authorities have taken on a major technology company in court since Microsoft was targeted more than two decades ago.
The lawsuit against Microsoft and the dominance of the Windows operating system helped to legally define how a technology platform illegally abuses its monopoly to punish its rivals.
This is therefore a major victory for the Department of Justice, which has launched a series of proceedings against other digital giants, starting with Amazon, Meta (Facebook, Instagram) and Microsoft, again to denounce anti-competitive practices.