On Tuesday, the judge ruled that Google would not be required to sell its Chrome browser or Android operating system, a decision that shields the tech giant from the most severe penalties the US government has pursued. This same judge previously sided with US prosecutors nearly a year ago, determining that Google has established and continued an illegal monopoly over its namesake search engine.
Critics of Google’s dominance in the internet search and online advertising arena are outraged. They contend that the judges failed to implement significant reforms in an industry that has been stifled under the immense pressures of leading competitors. Conversely, groups within the tech industry and investors are feeling optimistic. Since Tuesday afternoon, shares of Google’s parent company Alphabet have surged by 9%.
Judge Amit Mehta mandated that Google share data with its competitors and its various search engines. Furthermore, he ordered the company to establish or sustain exclusive agreements for the distribution of its products, such as Chrome, Google Assistant, and the Gemini app. This penalty does not inhibit payment to distributors like Apple or Mozilla, which utilize Google as their default search engine. Google is also facing another hearing later this year regarding its monopoly in online advertising technology.
The Department of Justice heralded the ruling on Tuesday in a press release, calling Mehta’s suggested remedy “crucial.”
“Today, the court’s decision acknowledges the necessity for a remedy to rejuvenate the market for popular search services that has remained stagnant for over a decade,” the statement indicated.
Free market advocates argue, however, that the measures are insufficient.
Critics argue the judge granted Google a lenient victory
Mehta’s verdict has prompted substantial backlash from leading technology critics who have been observing antitrust laws for years. Many organizations and advocacy groups have long advocated for breaking up Google’s exclusive tactics, asserting that robust measures are essential to restoring genuine competition.
Instead of fostering an open online search industry, critics argue that while removing some of Google’s advantages, Big Tech sets a precedent indicating that serious repercussions for legal violations are not to be feared.
“For years, Google has been competing across all facets of the digital economy, overpowering its rivals, stalling innovation, and denying Americans their rights to read, view, and purchase without manipulation by one of the most potent corporations in history,” stated Barry Lynn, executive director of the Open Markets Institute ThinkTank. “The Mehta Order requiring Google to share its search data with competitors and cease exclusive agreements will do little to rectify those issues. It seems that even serious legal violations result in mere wrist slaps.”
Some organizations and analysts have reservations about Mehta’s ruling that Google maintained an illegal monopoly, suggesting that a more favorable decision may be filed this week.
“I would ask him to send a thank-you note to the robbers after finding someone guilty of robbing a bank,” remarked Nidhi Hegde, executive director of the nonprofit American Economic Freedom Project.
Several prominent tech leaders, including Yelp, DuckDuckGo, and Epic Games’ CEOs, criticized the decision, claiming it fails to level the playing field for their competitors. Both Yelp and Epic Games are engaged in legal actions against Google concerning antitrust issues, while DuckDuckGo’s CEO testified during the government’s antitrust trial against the search giant.
“It appears that the accused have committed a string of bank robberies, and the court’s decision has found them guilty and placed them on probation, allowing them to continue robbing banks but requiring them to share data on how the robbery works,” remarked Tim Sweeney, CEO of Epic Games, drawing on the bank robbery analogy.
Democrats advocating for stricter regulations on big tech companies have similarly condemned the ruling, with some calling for the Department of Justice to appeal the decision.
“The court previously determined that Google’s search operations constituted an illegal monopoly, but now the judge’s remedies do not hold Google accountable for violating the law,” stated Massachusetts Senator Elizabeth Warren in a statement. “Instead of reinstating competition and curtailing Google’s dominance, this ruling serves as a mere wrist slap for illegal behavior that ensures this tech giant remains intact.”
The chairs of the Monopoly Busters Caucus—US Representatives Chris Deluzio, Pramila Jayapal, Pat Ryan, and Angie Craig—issued a statement condemning the ruling as a “wrist slap,” arguing it undermines bipartisan efforts to tackle tech monopolies.
“This ruling effectively permits Google to retain its monopoly. Despite Google’s illegal actions regarding its search monopoly, the courts are allowing it to keep Chrome and Android, which are essential tools for Google’s market control,” the Caucus asserted.
Human rights organization Amnesty International also expressed outrage at the decision, highlighting that Google’s business model is fundamentally flawed. They emphasized that Chrome is a critical tool utilized for collecting personal data from Google users.
After the newsletter promotion
“Google’s infringement on the search industry and the imposition of a sale on Chrome could have signaled the initial step toward a digital landscape that respects our rights,” stated Agnès Callamard, executive director of Amnesty International.
Silicon Valley and Wall Street celebrate
The tech sector rejoiced while antitrust advocates lamented the verdict. Industry groups stated that Mehta’s ruling prevented a potential disaster for Silicon Valley. The Developers’ Alliance, a high-tech industry group, praised the judge for rejecting the severe structural relief sought by the Justice Department.
“The sale of Chrome and Android would have had catastrophic implications for web and app developers and the broader digital ecosystem,” the group stated. “Developers are relieved that this trial’s political theatrics have reached a conclusion.”
Another industry organization, the Consumer Choice Center, supported Google’s claim that its products are superior, justifying its market control. Stephen Kent, the group’s media director, likened the Justice Department’s “politicized incident” to a larger player enjoying popularity due to offering superior products rather than competing apps and services.
Many of these organizations referenced Mehta’s assertion that, over the years, Google has given rise to technically viable competitors within Chrome. “This new reality illustrates that if a strong competitor arises, Google should not be expected to outweigh them in distribution,” the judge’s ruling indicated.
“The debate around search engine market shares is particularly relevant in light of the dramatic and significant advancements in AI that are reshaping the landscape,” remarked the Developer Alliance.
Jennifer Huddleston, a senior fellow at the Libertarian Think Tank The Cato Institute, advised careful consideration, emphasizing that “innovation often remains our best competitive strategy.”
“The month between the initial ruling and the remedial decision underscores the rapid changes occurring in the tech industry,” Huddleston noted. “This is especially true considering the transformative nature of AI technologies in search. As Judge Mehta points out, courts must not only analyze historical facts but also forecast the future in a swiftly evolving market.”
Apple also experienced a boost, with Google’s stock rebounding following Mehta’s ruling. Historically, the iPhone manufacturer has received billions from Google annually, as Google serves as the default search engine for its devices. The arrangements between the two companies account for approximately 15% of Apple’s operating profits. Shares have risen nearly 4% since Tuesday.
“We’ve been eager to get started,” wrote Gene Munster, managing partner at Deepwater Asset Management, on X.
Critics of the ruling are not surprised that Wall Street has responded positively to Mehta’s decision. “There’s a reason Google stock skyrocketed following this ruling,” stated Christo Wilson, a professor of Computer Science at Northeastern University, who led a team that studied Google’s monopolistic practices in search. “This represents a historic failure to address the significant evidence that Google is an online search monopoly.”
Source: www.theguardian.com
