After the US Justice Department started to pursue an anti-trust case against Google in court, the judge agreed that Google is a monopolist after 4 years.
👉 Background: Google first started back in 1998 under the name BackRub. Although Google has launched a hundreds of products like Google Maps, Gmail and Google Drive, its Search division is still the most lucrative.
👉 What happened: In 2020, the US Justice Department started to pursue an anti-trust case against Google in court. They claimed that Google suppressed competition in the Search space by paying $26 billion USD to companies like Apple (and others) to be their default search engine. It also claimed that these payments effectively blocked any competitor from succeeding in the Search market.
👉 What else: After 4 years, the judge agreed that Google is a monopolist and found that these payments meant Google could increase ad prices without any meaningful competitive constraint. Next minute: Google’s owner Alphabet saw its shares drop 4.5%, sending a very strong signal of what is to come.
💡One small step for the Department of Justice, one giant leap for antitrust cases.
💡Google may be a monopoly, but it was almost too big to prosecute against. Get this: Google generated $175bn in revenue from its search-based advertising last year alone and it does 90% of the world’s internet searches.
💡But, this win for the Department of Justice puts other big tech companies on notice — Amazon, Apple, and Meta all face their own monopoly lawsuits from the US government as well and to make matters worse, Google will go to trial against the DOJ a second time.
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