Key Points:
- Federal Judge Amit Mehta has instructed the U.S. Justice Department to propose penalties for Google by the end of the year.
- Google is accused of violating the Sherman Antitrust Act by maintaining dominance in the search engine market.
- Prosecutors are considering severe penalties, including a possible breakup or banning payment agreements with device manufacturers.
A federal judge has ruled that Google’s control over the search engine market constitutes an illegal monopoly, with potential penalties—such as a company breakup—expected to be decided by next summer.
On September 6, Judge Amit P. Mehta of the U.S. District Court for the District of Columbia ordered the Justice Department to submit proposed penalties for Google by the end of this year. An evidentiary hearing has been scheduled for March or April 2024, with the court expected to finalize penalties by August 2025.
Google’s attorney, John Schmidtlein, emphasized the need for a detailed proposal from prosecutors to prepare a defense. Should Judge Mehta’s timeline remain on track, a decision on Google’s penalties will follow nearly five years after the lawsuit was initially filed in 2020.
The case, U.S. et al v. Google, marks a significant antitrust trial that began during the Trump administration and has continued into the Biden administration, representing one of the most substantial actions against a major tech company in recent years.
On August 5, Judge Mehta found that Alphabet, Google’s parent company, violated the Sherman Antitrust Act by engaging in practices aimed at maintaining its search engine dominance.
Google’s Violation of the Sherman Antitrust Act
The Sherman Antitrust Act, enacted in 1890, prohibits monopolistic practices that restrict competition. It aims to maintain a competitive market environment by preventing businesses from engaging in practices that unfairly limit competition or control prices.
Prosecutors accuse Google of securing deals with device manufacturers to ensure its search engine remains the default option on nearly all smartphones sold in the U.S., including Apple’s iPhones. This strategy allegedly allowed Google to dominate the market, with a near 90% share, driving business toward its advertising and other services.
While the Justice Department has not yet outlined specific penalties, the case has led to discussions about significant reforms to Google’s operations.
Colorado Attorney General Phil Weiser, a leading force in the multi-state antitrust lawsuit against Google, has hinted at two possible outcomes: either breaking up Google or prohibiting the company from paying device manufacturers to pre-install its search engine. The aim is to collaborate with prosecutors to develop a unified approach to addressing Google’s anti-competitive practices.
In addition to this case, Google faces ongoing antitrust challenges, including a European Union investigation and a lawsuit from online review platform Yelp.
