Court: Google Has Search Monopoly

Google has acted unlawfully to maintain its monopoly in the search market, according to a US court ruling. Whether it will face any practical consequences remains to be seen.

The ruling was in a case brought by the Department of Justice alleging violations of the Sherman Act. That makes it a felony to intentionally act or conspire to have or maintain a monopoly in a particular market. Previous cases have established that this isn't simply about market share but rather the ability to exploit monopoly power. The judge in the case did not mince his words, stating that "Google is a monopolist, and it has acted as one to maintain its monopoly."

90 Percent Share

This case specifically centered on Google's dominance of the online search market where its share has been estimated at 90 percent. This includes both the sheer number of searches and the ability to monetize the searches such as selling advertising on results pages or using data about searches.

The main allegations was about Google paying tech companies to be a default search engine in an operating system or web browser. Prosecutors said Google paid a total of more than $10 billion a year to companies including Apple, Mozilla and Samsung. (Source: bbc.co.uk)

They argued that this created a vicious circle (and unfair monopoly power) by which Google's dominance gave it the money to spend this way and in turn maintain the dominance.

Google countered that the primary reason it is used for so many searches is that consumers prefer its service and the usefulness of its results. It also argued that not only can consumers easily switch to other search engines, but that the market is too narrowly defined. It believes that the calculations of market share should also take into account people looking for information of dedicated websites and apps, for example those that find flights or restaurant bookings. (Source: searchengineland.com)

Break Up Possible

The judge has yet to decide the consequences of the ruling, which may be delayed by a likely appeal. The government has said a fine would not be sufficient and instead asked for "structural relief." That could mean anything from a ban on paying to be a default search engine to a breakup of Google's business.

It's also possible any court orders may depend on the outcome of a separate case which begins in September alleging an unlawful Google monopoly in the online advertising market.

What's Your Opinion?

Do you back this verdict? How would you define the search market? How much of Google's success in search is down to the quality of its results vs its market dominance?