Live Updates: What the US antitrust ruling says about Google’s monopoly over ads

SA360 is Google's search engine management tool that is used by advertisers to manage online marketing campaigns across multiple platforms in one place. In court, plaintiffs argued that on SA360, Google prioritised its own ad platform called Google Ads over Microsoft's ad platform by blocking various features on the latter such as the ability for advertisers to change their bidding strategies during ad auctions in real time. However, the court ruled in favour of Google on this charge and said that the Alphabet-owned company had "no duty to deal" with a rival.

Monday's verdict has brought the tie-up between Google and Apple in the spotlight. In order to avoid further legal action, Google may look to call off the deal it has with Apple. So far, Google has been paying Apple 36 per cent of the ad revenue it earns from search ads shown on the Safari browser. This amounts to roughly $20 billion every year, according to a Reuters report. If Google terminates the agreement, the iPhone-maker could stand to lose that $20 billion which would lead to a 4-6 per cent drop in its profit margins, Morgan Stanley analysts estimated. Alternatively, Apple could strike a similar deal with other players in the online search market such as Microsoft or work towards bringing AI features to its Safari browser and improve the product.

One of the key legal findings that have emerged from the judgment is that Google has been able to maintain its control of the online search market by making exclusive deals or distribution agreements with handset makers like Apple and Samsung, mobile carriers like Verizon, and even browser developers like Mozilla.

"Google’s distribution agreements are exclusionary contracts that violate Section 2 because they ensure that half of all GSE [general search engine] users in the United States will receive Google as the preloaded default on all Apple and Android devices, as well as cause additional anti-competitive harm. The agreements “clearly have a significant effect in preserving [Google’s] monopoly,"" the order read

Though the antitrust verdict grabbed headlines, it did not have much of an effect on stock markets as Alphabet, Google's parent company, only saw a minor drop in share prices, according to The Information. The company's stocks declined by 5 per cent during the day's trading but it had already been down before the ruling came out, the report said. Apple stocks also did not take much of a hit either due to the judgment.

During the trial, the plaintiffs argued that Google controls a dominant and durable share of the search market, adding that its position is protected by high barriers of entry. To counter this argument, Google asserted that the online search services market did not exist as a product market. Instead, it said, that search engines were part of a broader market of query responses where Google did not have monopoly as there was vigorous competition in that space.

However, the court ultimately did not buy Google's argument and sided with the plaintiffs, ruling that there is a relevant market for general search services. It further noted that Google has monopoly power within this market.

Back in 2020, the US Department of Justice and other states in the country filed an antitrust lawsuit against Google, arguing that the tech giant's monopoly in the online search market is illegal. The hearings in the case kicked off in September 2023 and went on for more than two months. It was heard by Judge Amit P Mehta of the US District Court for the District of Columbia.