Judge Amit Mehta’s ruling declaring Google a monopolist in search represents a significant development in the ongoing debate about Big Tech’s market dominance. This decision, stemming from a United States Department of Justice lawsuit, highlights the culmination of years of discussions and research on antitrust issues in the technology sector, particularly surrounding Google’s search practices.
The recent ruling by Judge Amit Mehta declaring Google a monopolist in search marks a significant milestone in the ongoing debate about Big Tech’s dominance in the United States (Europe and other jurisdictions reached the same conclusion years ago ). Not since Microsoft’s antitrust case in the 1990’s has a Big Tech company faced such a landmark antitrust enforcement ruling in a government case in the U.S. (though Google says it plans to appeal the decision).
Mehta’ decision, stemming from a lawsuit by the U.S. Department of Justice, underscores the need for ongoing analysis, discussion and debate about the market power and competitive conditions in the technology industry. It’s important to remind ourselves of the history of these discussions, as the evolution in economic analysis of market competition is crucial for comprehending the ruling, designing effective remedies, and understanding how these factors could impact the future of antitrust enforcement. Rulings on other DOJ antitrust lawsuits against Amazon, Apple, Meta and Google (for adtech) are yet to come, but this being the first of the five can shed light on where the others may land.
A History of Debate
After a Council of Economic Advisors report in 2016 showed increases in concentration in U.S. markets, University of Chicago Booth School of Business professors Luigi Zingales and Guy Rolnik organized a conference of academics and policymakers in 2017 to ask “whether this possible increase in concentration has translated into an increase in firms’ market power and whether this increase in market power has caused major welfare distortion.”
This event initiated the Stigler Center’s comprehensive inquiry into market concentration. Panelists reviewed the empirical evidence supporting claims of too much concentration in the U.S. economy, and began to discuss whether antitrust enforcement should be reconsidered. The event featured a wide-ranging conversation between Zingales and Judge Richard Posner, including a debate over Google’s actions. Posner is one of the most influential antitrust scholars over the last century and was a judge in the Court of Appeals for the Seventh Circuit in Chicago:
“What was the worst thing Google had done?” asked Posner.
“They diverted searches toward a business they owned directly,” replied Zingales.
“I guess that’s bad,” said Posner.
After the conference, the conversation continued on ProMarket, especially via an interview series with influential scholars. The discussions were picked up again the following year, at the 2018 Antitrust and Competition Conference specifically focused on digital platforms and how Google has “the power to manipulate opinions from the very first character that people type into the search bar.” Discussions centered on how network effects and economies of scale create monopolistic conditions, often making it difficult for new entrants to compete with established players. For example, there was extensive discussion on the dissolution of rewards to innovation and the tendency of tech giants to absorb or copy the upstarts that could become their rivals.
Discussions Go Mainstream
In 2019 the discussion surrounding antitrust and Big Tech went mainstream, with the Stigler Center’s antitrust conferences cited in the New York Times: “Discussions at those two conferences have been echoed in recent decisions by the Justice Department and 50 state attorneys general.”
And the Justice Department was not the only part of the federal government to take note. The Stigler Center published its groundbreaking “Report on Digital Platforms” in 2019. This comprehensive study, involving over 30 scholars analyzing the power of tech giants, was brought to the U.S. Senate’s Subcommittee on Antitrust by Senator Amy Klobuchar. This followed other similar conclusions by antitrust authorities around the world, initiatives that ProMarket has also covered.
Regarding Google search specifically, the Stigler Center report said, “Google search is the dominant firm in this category with high entry barriers; despite the enormous size of this market, VC investors apparently do not want to fund an entrant. By contrast, VCs are attracted to startup teams that solve a specific issue for Google (and have a chance of buyout) as opposed to funding a team that wants to compete head to head. This dynamic leads to a self-fulfilling prophecy.”
In 2020, the Justice Department filed its antitrust lawsuit against Google’s search power. Despite the Covid-19 pandemic, the discussions powered on in a series of webinars in 2020 and 2021. Indeed, an episode of the Stigler Center’s podcast Capitalisn’t explored the evolution of antitrust laws and their application to Big Tech companies, focusing on the 1998 Microsoft case and drawing parallels to concerns about Google’s market dominance.
The year 2022 brought ProMarket an opportunity to speak with the newest head of the DOJ’s antitrust division, Jonathan Kanter. Kanter indicated that he wanted to hold monopolists accountable and to more vigorously enforce antitrust through lawsuits.
A panel dedicated to Google at the 2022 conference explored the firm’s anticompetitive practices, particularly in the areas of search and digital advertising. This panel pushed forward the conversation on remedies, especially given the EU’s difficulty in producing tangible results for its enforcement efforts. Panelists suggested various forms of breaking up the company, limiting search results, and forcing certain groups to use Bing, Google’s main competitor in search.
Case Ramps Up
In autumn 2023, with the Google Search case ramping up, ProMarket published a series of articles by various experts discussing the merits and limitations of the lawsuit. Google had been making huge payments (on the order of $18 billion) to be the default search engine on Apple and Mozilla products. Among the discussions were articles on the trial’s unprecedented secrecy, and that it was emblematic of the shift in antitrust enforcers’ attitude toward the dominance of Big Tech.
At the conclusion of the trial, scholars emphasized a behavioral economics approach to analyzing the consumer nudging that led to Google’s search dominance in the first place, and what regulating this might mean for the rest of the tech industry.
One takeaway from Mehta’s ruling is that monopolists can exist, even in a zero-price market. In fact, the lack of users actually paying for search didn’t prevent Mehta from accepting the definition of the market. The ruling points out that Google “enjoys an 89.2% share of the market for general search services, which increases to 94.9% on mobile devices.”
What Happens Next
Google has promised to appeal the decision by Mehta, but before it had even been announced, scholars began discussing what an effective remedy would look like. Thus, in 2024 we saw the remedy discussion emerge to encompass a range of potential solutions for Google’s search dominance, from conduct-based remedies to structural changes.
Conduct remedies include prohibiting Google from securing default search engine status through exclusive agreements, implementing choice screens to allow users to select their preferred search engine, and mandating the sharing of click and query data with rivals. However, there were concerns that these measures may not be sufficient to overcome Google’s entrenched market position and brand recognition. Structural remedies, such as divesting Google’s web indexing capabilities or the Android operating system, were also considered as potentially more decisive solutions. Importantly, the remedies applied in this case could set a precedent for future antitrust enforcement in the tech sector.
We will not know the remedy for some months, or even longer depending on the appeal. We do know that the conversation will continue to evolve and that this ruling will undoubtedly impact the competitive landscape in the U.S.
Author Disclosure: the author reports no conflicts of interest. You can read our disclosure policy here.
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
