How much did Donald Trump being US president affect this week’s antitrust ruling against Google, which dodged a bullet after the judge didn’t accept the government’s recommendation that it be forced to sell off its Chrome browser and Android operating system.
In what amounts to a slap on the wrist for the largest search engine, Google was rebuked, but its ever-growing dominance of search was hardly halted. Last year the judge, Amit Mehta, had ruled that “Google is a monopolist, and it has acted as one to maintain its monopoly”. The department of justice had shown how Google paid Apple about $20bn a year to be the default search engine on its Safari browser, as well as paying Firefox and Samsung for the same default setting.
With all due respect to Mehta’s comment that “courts must approach the task of crafting remedies with a healthy dose of humility”, they also need a healthy dose of courage. This was a once-in-a-generation attempt to right the wrongs of how Google has become a “monopolist” and “acted as one to maintain its monopoly”. Why didn’t Mehta listen to his own words? Not surprisingly, Google parent Alphabet saw a 9% rise in its share price, giving it an extra $210bn in market value. Apple got a 3% bump in its share price, and the happy knowledge that it will earn about $20bn again this year.
Mehta also ruled that Google must provide some of its data — which was called “the oxygen” for search engines during the trial — to be handed over to some of its competitors. Yet even though he acknowledged that Chrome “undoubtedly” helped Google capture its search dominance, the judge turned down the US government’s request that it be forced to sell its browser as “a poor fit for this case”. It’s hard to follow the logic of the judgment sometimes.
Mehta said: “Here the court is asked to gaze into a crystal ball and look to the future. Not exactly a judge’s forte.” Then he did just that and concluded that the boom in AI would create greater competition. “These companies already are in a better position, both financially and technologically, to compete with Google than any traditional search company has been in decades (except perhaps Microsoft),” Mehta wrote. “The money flowing into this space, and how quickly it has arrived, is astonishing.”
This week Anthropic, another rising AI star, announced its valuation has leapt to $183bn, after it raised another $13bn in funding. Mehta added that generative AI offerings such as ChatGPT “pose a threat to the primacy of traditional internet search”. It’s just added irony that the judge’s name is Mehta — which sounds the same as Google’s chief partner-in-privacy-crime, which we all still call Facebook. It is also in the department’s crosshairs — it has sued Google for its monopoly in digital advertising.
Mehta’s weak judgment belies his own findings last year, in which he wrote: “the trial evidence firmly established that Google’s monopoly power, maintained by the exclusive distribution agreements, has enabled Google to increase text ads prices without any meaningful competitive constraint”. He added: “Unconstrained price increases have fuelled Google’s dramatic revenue growth and allowed it to maintain high and remarkably stable operating profits.”
It’s hard to see how his very passive ruling will stop those “unconstrained price increases”. Nor how his ruling will release Google’s stranglehold on search when he didn’t ban the $20bn annual payments to phone and browser makers to make it the default search engine. Last year Mehta found that 50% of searches in the US were through these exclusive arrangements: 28% with Apple, 19% with Android manufacturers and 2% with browser Mozilla.
“The prospect of losing tens of billions in guaranteed revenue from Google — which presently come at little to no cost to Apple — disincentivises Apple from launching its own search engine when it otherwise has built the capacity to do so,” Mehta wrote at the time. So where did his clear and concise understanding of Google the “monopolist” devolve into this toothless ruling?
Think-tank the American Economic Liberties Project was damning — and accurate — in its criticism, saying this “feckless remedy to the most storied case of monopolisation of the past quarter century is a complete failure… You don’t find someone guilty of robbing a bank and then sentence him to writing a thank-you note for the loot,” said executive director Nidhi Hegde. “Similarly, you don’t find Google liable for monopolisation and then write a remedy that lets it protect its monopoly.”
He added that the court found Google “liable for maintaining one of the most consequential and damaging monopolies of the internet era, yet has bizarrely decided to leave its power almost fully intact. Imposing liability in name only is pure judicial cowardice.”
Gabriel Weinberg, CEO of search engine DuckDuckGo, who testified in the case, said: “It’s a nothingburger.” DuckDuckGo has been my search engine for the past six or seven years. I’ve tried to live outside the “Google web” as Microsoft CEO Satya Nadella called the online world during the trial, but it’s virtually impossible.
Mehta just gave Google a $210bn get-out-of-jail (mostly) free card.
• Shapshak is editor-in-chief of Stuff.co.za.
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