Google loses major anti-trust case over its search dominance

Decision represents a major setback for Google and its parent company Alphabet

Google's search engine processes an estimated 8.5 billion queries a day worldwide. AP

A judge on Monday ruled that Google's search engine has been illegally exploiting its dominance to stifle competition and innovation, in a decision that could shake up the internet and hobble one of the world's best-known companies.

The highly anticipated decision by District Judge Amit Mehta comes nearly a year after the start of a trial pitting the Justice Department against Google in the country's biggest anti-trust showdown in a quarter century.

After reviewing evidence that included testimony from top executives at Google, Microsoft and Apple during last year's 10-week trial, Mr Mehta issued his decision three months after the two sides presented their closing arguments in early May.

It represents a major setback for Google and its parent, Alphabet, which had argued that its popularity came from that fact that it was so good.

Google's search engine processes an estimated 8.5 billion queries a day worldwide, nearly doubling its daily volume from 12 years ago, according to a recent study released by the investment firm Bond.

Google will almost certainly appeal against the decision in a process that may land in the US Supreme Court.

For now, the decision vindicates anti-trust regulators at the Justice Department, which filed its lawsuit nearly four years ago while Donald Trump was still president.

It has been increasing its efforts to rein in Big Tech’s during President Joe Biden’s administration.

The case showed Google as a bully that methodically thwarted competition to protect a search engine that has become the centrepiece of a digital advertising machine, which generated nearly $240 billion in revenue last year.

Justice Department lawyers said that Google's monopoly enabled it to charge advertisers high prices while enjoying the luxury of having to invest more time and money into improving the quality of its search engine – an approach that hurt consumers.

Google responded that consumers have historically changed search engines when they become disillusioned with the results they were getting.

For instance, Yahoo – now a minor player on the internet – was the most popular search engine during the 1990s before Google.

Mr Mehta's conclusion that Google has been running an illegal monopoly sets up another phase to determine what types of changes or penalties should be imposed to reverse the damage done and restore a more competitive landscape.

The outcome could result in a wide-ranging order requiring Google to dismantle parts of its internet empire or stop it paying more than $20 billion annually to ensure its search engine automatically answers queries on the iPhone and other internet-connected devices.

After the next phase, the judge could conclude only modest changes are required to level the playing field.