US District Court Judge's Ruling Against Google Could Have Cascading Effect, Say Experts

US District Court Judge Amit Mehta's ruling that Google's exclusivity agreements to make its search engine the default has violated anti-trust laws could have a cascading effect, according to Dr AK Garg, director and head of digital technology and law at Anand and Anand.

On Aug. 5, Judge Mehta ruled that Google had violated Section 2 of the Sherman Act (An antitrust law published in 1980) by maintaining its unfettered dominance in two product markets in the United States. The search giant had breached law by using exclusivity agreements to maintain a monopoly on general search services and general text advertising.

"Google is a monopolist, and it has acted as one to maintain its monopoly," Judge Mehta noted in the ruling. While Google's market share in 2009 was nearly 80% in the search engine, it had only increased further to 90% by 2020, the judge noted. By comparison, its closest competitors, Bing and Yahoo, hold less than 6% and 2.5% market share, respectively. There's also privacy browser Duck Duck Go, which currently holds a market share of just 2.1%.

Google plans to appeal the ruling.

"We appreciate the court’s finding that Google is 'the industry’s highest quality search engine, which has earned Google the trust of hundreds of millions of daily users,' that Google 'has long been the best search engine, particularly on mobile devices,' 'has continued to innovate in search' and that 'Apple and Mozilla occasionally assess Google’s search quality relative to its rivals and find Google’s to be superior'. Given this, and that people are increasingly looking for information in more and more ways, we plan to appeal," said a statement released by the company's President of Global Affairs Kent Walker on X, formerly Twitter.

"Other competition commissions will take note and that will be the way they will be ruling, at least in the case of Google," said Garg.

Google has had run-ins with the Competition Commission of India in the past.

Back in 2022, the CCI had penalised Google Rs 1,337 crore relating to anticompetitive practices regarding Android devices. Google then appealed the judgement to the National Company Law Appellate Tribunal. While the company has paid the fine, related litigation is still ongoing across different forums in India.

"The US judge's ruling made yesterday dealt with issues that are similar to some issues dealt by the CCI in earlier rulings, like in the Android OS case," said Deepro Guha, senior manager, The Quantum Hub. He mentioned an older case from 2009 filed by Bharat Matrimony against Google regarding its use of copyrighted words in its AdWords Policy. Litigation in that case is also ongoing.

Based on the US ruling, the CCI is unlikely to take suo moto cognizance of Google's anticompetitive practices in India. "If someone chooses to go to the court with respect to the search engine issue or the ad issue, it can be looked at, but its not like it hasn't been looked at before," Guha said.

Garg points out that Google's public advocacy team in India is very weak when it comes to challenging similar issues. "It will not be a very rosy situation for the company in India," he said.

The appeals process is likely to be lengthy, and could take as long as five years, according to a report from the Associated Press.

But if Mehta's ruling survives the appeals process, the company might have to make very material changes. "They have to break it up into a multitude of businesses, that's the only way," Garg said.

This could potentially mean that Google's search engine, Play Store and Google Ads, might all have to become brands. "In India, the company's anticompetitive practices were dealt with by a financial penalty and an order to Google to stop tying its Android devices with its search engine," according to Guha.

This is perhaps the first big win for anti-trust regulators in the US against Big Tech. The US Justice Department's antitrust division has been going after Meta, Apple, Google and Amazon for maintaining monopolistic practices.