Google was found guilty of anti-competitive practices and abuse of its monopolistic position in the United States, following its antitrust trial. Justice risks forcing the company to separate from Chrome…
It’s a real bolt from the blue that hits Google! In 2020, the Department of Justice – the body that handles antitrust cases alongside the Federal Trade Commission (FTC) – filed a complaint against the company, accusing it of spending billions of dollars to maintain the monopoly of Google Search and prevent competition from emerging. The trial was held from September to November 2023, with the Mountain View firm striving to prove that its strategy was legitimate, while the US Department of Justice claimed that it had caused damage to competing search engines and to consumers.
Finally, as reported CNBCthe American court ruled on August 5, 2024 that the Internet giant had indeed illegally maintained its positions, by spending billions of dollars to be the default search engine on several web browsers, on computers and on smartphones. This is called a monopoly situation. Another practice denounced: the monopolization of advertisements appearing in search results, sold to companies via Google Ads.
Google has therefore indeed violated article 2 of the Sherman Act, the text legislating on anti-competition in the United States. And, for that, the Department of Justice would intend to simply request the transfer of Chrome, according to information collected by Bloomberg. A decision that would be historic! Finally, Donald Trump was perhaps not entirely wrong in asserting that Google was “close to closing”…
Google antitrust lawsuit: billions of dollars to guarantee its monopoly
Proving that Google abused its dominant position was no easy task. But the Department of Justice was ultimately able to demonstrate that the company had restricted the ability of competitors to take a fair chance. The various agreements signed, described as “anti-competitive practices”limit the opportunities of other search engines to penetrate the market, thus consolidating the monopoly of the Mountain View firm. “Google is a monopoly, and the company has acted as such to maintain its monopoly”wrote the judge in his decision.
Following this conviction, the Internet giant will be fined, the amount of which will be determined at a future hearing. Justice could also require Google to restructure, or even sell entire activities – or dismantle –, as with Microsoft more than twenty years ago. And it’s good to see she seems to be heading.
As a reminder, the antitrust trial against the Redmond firm took place at the end of the 1990s and focused on the domination of the Windows operating system. In 2000, the company was finally found guilty of anticompetitive practices and was ordered to be dismantled. Justice then asked Microsoft to split into two separate companies, namely one which would produce the operating systems (Windows) and another the software (Word, Excel, etc.). The company appealed and escaped this sentence in 2001, after the rejection of the dismantling sanction by the court of appeal, which nevertheless upheld the accusation of monopoly.
Google antitrust trial: the sale of Chrome seriously considered
The US government will ask a judge to force Google to sell its Chrome browser, the world’s most widely used web browser, because it is a major access point to the search engine, seriously reducing the chances of potential competitors. In addition, the authorities also want the company to be forced to license the results and data generated by Google Search, that is, to allow other companies or services to access them for a fee, rather than keeping them exclusive, so they can improve their search results and allow them to become legitimate competitors.
American justice would also like websites to have more options to block the use of their content by Google’s AI. Because if publishers can indeed ask not to give their content to AI bots that roam the Internet, many artificial intelligences actually ignore this. In addition, the Government also wants to act on the research results formulated by generative AI, the famous AI Overviews, which directly provide an answer to users’ questions, who then no longer have to click on links. Many sites complain of a drop in traffic because of this system, while Google’s competitors in online search believe that this new format leaves them no chance of emerging.
Google antitrust trial: the dismantling of several services?
According to sources close to the matter, American justice would also target the Android mobile operating system, which should be dissociated from the Google Search search engine and the Play Store. In fact, these two services are provided together to manufacturers who want to integrate the most complete version of Android. The company would also be prohibited from signing exclusivity agreements to be the default search engine in operating systems. Finally, in addition to this split, the Mountain View firm could be forced to sell Google Ads, its advertising sales platform. Less restrictive measures are also being considered.
For its part, Google announced on August 7 that it would appeal its conviction. The group claims that searches carried out on Amazon, Facebook and Expedia constitute competition to its search engine and that its distribution agreements are beneficial for consumers and compliant with antitrust laws. For them, Internet users do not use Google because they have to, but because they want to. The company also points to the ease of the process for changing your default search engine.
“[Le ministère de la Justice] continues to advance a radical agenda that goes far beyond the legal issues raised in this case.”deplores Lee-Anne Mulholland, vice president of public affairs at Google. “Having government influence in this way would harm consumers, developers, and America’s technology leadership, precisely when it is needed most.”.
The judge will hold a two-week hearing next April to determine what changes Google will have to make. Its final decision should be known in August 2025. In any case, the consequences for the company may not be visible for several years.
Google antitrust lawsuit: Mozilla and Firefox in turmoil
The judgment of the trial could well have repercussions on other digital players, and in particular on Google’s partners, who benefit from significant revenues through this means. According to the New York Timesthe contract between Apple and Google reaches 20 billion dollars. If Google will indeed have to stop its payments, Apple will then have to cope without this financial windfall. We are not too worried about the Cupertino company, which should absorb this loss without too many problems. But this is not the case for everyone.
Indeed, the Mozilla Foundation, which oversees the development of the Firefox web browser, could well take the hit. It has had an agreement with Google since 2017 to make its search engine the default access to the Web on the browser. And for this, the digital giant pays hundreds of millions of dollars to Mozilla, to the point of representing its main source of income. According to figures given by the foundation in its annual reportof the 593 million dollars released in 2022, 510 million comes from “the integration of its clients’ search engines by default or as an option in the Firefox web browser”and more particularly from Google.
Also, if Firefox were to separate permanently from Google, this financial hole could well cause its definitive downfall, while the Web browser is already struggling to survive against Chrome and Edge, which between them have nearly 90% share. market. According to StatcounterFirefox is satisfied with only 2.74%. Requested by FortuneMozilla simply stated that the foundation “has always championed online competition and choice, particularly in search. We are carefully reviewing the court’s decision, taking into account its potential impact on Mozilla and how we can positively influence the next steps”.
Google lawsuit: how effective are US antitrust laws?
However, a question arises: why take up this matter only now? However, Google’s practices and its monopoly have persisted for several decades. Are US antitrust laws really effective? The problem seems to come from the role of the FTC. Indeed, since the 1980s, judges have confined themselves to wondering whether or not the behavior of the company accused of anticompetitive practices led to an increase in prices for consumers. It is only if prices actually increase that they then impose sanctions. However, in the case of Google – but also many other digital giants – the products and services are free. As a result, there is no notion of price strictly speaking. This is why no digital giant has ever been convicted of anti-competitive practices, with the exception of Microsoft.
And even in this case, as we have seen, the dismantling option is unlikely to succeed, and it is also doubtful that this will be the case here. Indeed, Google is far too important an American digital player on a global scale. It is unlikely that in the midst of a standoff with China, the United States will choose to dismantle the spearhead of its companies. Geopolitical considerations risk taking precedence over competition issues… We could instead have the judge claim damages and prohibit new agreements, as was the case for Microsoft. But, who knows, we are never safe from a surprise! Especially with the election of Donald Trump, the latter having a serious grudge against the Mountain View firm, which he often accuses of algorithmic manipulation.
For its part, the European Union has adopted another strategy. It preferred to put in place a series of regulations, such as the GDPR, the DMA and the DSA, with the aim of regulating, upstream, the digital giants. It is about ensuring that these companies adopt, in a preventive manner, good behavior, before the damage is done. The consequences are already visible, including on the side of Google, since smartphones and computers must now ask users to choose their default web browser and search engine. But the impact of these measures remains limited, because the use of Google Search has become a reflex after years of monopoly. Justice arrives too late on the issue…