Google Violated Sherman Act by Maintaining Monopolies in Search Services and Ads via Exclusive Agreements, Rules US Dist. Court
- Blog|News|Competition Law|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 17 August, 2024
Case Details: United States of America v. Google LLC - [2024] 165 taxmann.com 394 (USDC)[05-01-2023]
Judiciary and Counsel Details
- Amit P. Mehta, United States District Court
- Alex Austin, Neil Barrett-Bowen, Chris Barton, Ryan Booth, Joan Braddi, Patrick Chang, Eddy Cue, Arjan Dijk, Jerry Dischler & Jennifer Fitzpatrick for the Appearing Parties. & Others.
Facts of the Case
The U.S. Department of Justice, supported by 11 States (Plaintiffs), filed lawsuits against Google in October 2020, accusing the company of violating Section 2 of the Sherman Act. The case focused on allegations that Google unlawfully maintained its monopoly in three product markets viz. general search services, search advertising, and search text advertising
After a trial that lasted over nine weeks, the Court found that Google held a dominant position in these markets, supported by significant barriers to entry and had engaged in anticompetitive practices via exclusive agreements.
Finding of US District Court of Columbia
It was noted that Section 2 of the Sherman Act makes it unlawful for a firm to ‘monopolize’. Further, the parties agreed that the US is the relevant geographic market. The Court observed that Google held a substantial market share in the ‘general search services’ market, with a dominance of 89.2%, increasing to 94.9% share on mobile devices.
The Court identified significant barriers to entry, individually and collectively, that protect Google’s market dominance in general search. These include high capital costs, control over key distribution channels, substantial brand recognition, and Google’s scale. Therefore, it was concluded that Google monopolised the ‘general search services’ market.
The Court acknowledged that Google and its advertisers recognize search text advertising as a distinct product sub-market. The Court also took note of the plaintiff’s submission, stating that Google has maintained a large and durable market share in this market, further safeguarded by significant entry barriers.
Further, the Court highlighted that the exclusive agreements Google secured for default distribution on nearly all desktop and mobile devices effectively slow the competition. Due to the lack of viable competitors, these agreements solidified Google’s monopolistic hold on the ‘general search services’ market.
Google’s monopoly in general search has shown remarkable durability over time. The company’s market share, nearly 80% in 2009, grew to approximately 90% by 2020. This historical consistency in market dominance supports the conclusion that Google’s competitive practices have effectively hindered other players from gaining a significant market presence.
Foreign Court Held
The Court held that Google had violated Section 2 of the Sherman Act by unlawfully maintaining its monopoly in general search services and general search text ads by entering into exclusive agreements to secure default distribution on nearly all desktop and mobile devices in the United States.
Further, the Court also found that Google had exercised its monopoly power by charging competitive prices for general search text ads, which has allowed Google to earn monopoly profits.
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
![](https://www.taxmann.com/post/wp-content/uploads/2021/07/logo_Taxmann-Tax-CL-of-India-for-Web_Sept18.png)
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied