Google loses antitrust case in search business, stock price drops more than 4.4%
Google lost the antitrust case in the search business, with its stock price falling more than 4.4%. A U.S. judge ruled that Google's maintenance of a monopoly in online search is illegal. Google was accused of exercising monopoly power through exclusive distribution agreements and super-competitive pricing. This ruling may have an impact on Apple. Both Google and Apple's stocks fell further, with Alphabet closing down more than 4.4% and Apple down 4.8%. Google plans to appeal the ruling, while Apple has not commented. The Attorney General stated that this is a historic victory for the American people, and the Department of Justice will continue to enforce antitrust laws
According to the financial news app Zhitong Finance, on Monday, a federal judge in the United States ruled that Google's (GOOG.US, GOOGL.US) maintenance of a monopoly in online search is illegal. This decision strikes at the power of large tech companies and could fundamentally change their business practices.
Judge Amit P. Mehta of the District Court for the District of Columbia wrote in his nearly 300-page ruling, "Google is a monopolist and acts to maintain its monopoly position." The judge pointed out that Google maintains its monopoly position in two major markets (general search services and general text advertising) through exclusive distribution agreements with browser developers, smartphone manufacturers, and wireless carriers.
According to court documents, Google's business partners typically receive a portion of advertising revenue from searches conducted through the default access points of browsers or devices. Mehta wrote, "Google's distribution agreements are exclusive and have anti-competitive effects, with Google exercising its monopoly power by charging super-competitive prices for general search text ads. This behavior allows Google to obtain monopoly profits."
This ruling may also impact Apple (AAPL.US) as Apple receives a share by setting Google as the default search engine on iPhones.
Against the backdrop of a global stock market plunge, shares of Alphabet and Apple fell on Monday, with both experiencing further declines after the ruling was announced. Alphabet closed down over 4.4%, while Apple dropped 4.8%. Google has stated its plans to appeal the ruling, while Apple has not immediately commented on the ruling.
U.S. Attorney General Merrick Garland stated in a post-ruling declaration, "This victory against Google is a historic victory for the American people, as no company - regardless of its size or influence - can stand above the law. The Department of Justice will continue to actively enforce our antitrust laws."