That sure is a big news drop for a random Tuesday.
A federal judge ruled that Google violated US antitrust law by maintaining a monopoly in the search and advertising markets.
“After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly,” according to the court’s ruling, which you can read in full at the bottom of this story. “It has violated Section 2 of the Sherman Act.”
↫ Lauren Feiner at The Verge
Among many other things, the judge mentions Google’s own admissions that the company can do pretty much whatever it wants with Google Search and its advertisement business, without having to worry about users opting to go elsewhere or ad buyers leaving the Google platform. Studies from inside Google itself made it very clear that Google could systematically make Search worse without it affecting user and/or usage numbers in any way, shape, or form – because users have nowhere else to realistically go. While the ability to raise prices at will without fear of losing customers is a sure sign of being a monopoly, so is being able to make a product worse without fear of losing customers, the judge argues.
Google plans to appeal, obviously, and this ruling has nothing yet to say about potential remedies, so what, exactly, is going to change is as of yet unknown. Potential remedies will be handled during the next phase of the proceedings, with the wildest and most aggressive remedy being a potential break-up of Google, Alphabet, or whatever it’s called today. My sights are definitely set on a break-up – hopefully followed by Apple, Amazon, Facebook, and Microsoft – to create some much-needed breathing room into the technology market, and pave the way for a massive number of newcomers to compete on much fairer terms.
Of note is that the judge also put yet another nail in the coffin of Google’s various exclusivity deals, most notable with Apple and, for our interests, with Mozilla. Google pays Apple well over 20 billion dollars a year to be the default search engine on iOS, and it pays about 80% of Mozilla’s revenue to be the default search engine in Firefox. According to the judge, such deals are anticompetitive.
Mehta rejected Google’s arguments that its contracts with phone and browser makers like Apple were not exclusionary and therefore shouldn’t qualify it for liability under the Sherman Act. “The prospect of losing tens of billions in guaranteed revenue from Google — which presently come at little to no cost to Apple — disincentivizes Apple from launching its own search engine when it otherwise has built the capacity to do so,” he wrote.
↫ Lauren Feiner at The Verge
If the end of these deals become part of the package of remedies, it will be a massive financial blow to Apple – 20 billion dollars a year is about 15% of Apple’s total annual operating profits, and I’m also pretty sure those Google billions are counted as part of Tim Cook’s much-vaunted services revenue, so losing it would definitely impact Apple directly where it hurts. Sure, it’s not like it’ll make Apple any less of a dangerous behemoth, but it will definitely have some explaining to do to investors.
Much more worrisome, however, is the similar deal Google has with Mozilla. About 80% of Mozilla’s total revenue comes from a search deal with Google, and if that deal were to be dissolved, the consequences for Mozilla, and thus for Firefox, would be absolutely immense. This is something I’ve been warning about for years now, and the end of this deal would be yet another worry that I’ve voiced repeatedly becoming reality, right after Mozilla becoming an advertising company and making Firefox worse in the name of quick profits.
One by one, every single concern I’ve voiced about the future of Firefox is becoming reality. Canonical, Fedora, KDE, GNOME, and many other stakeholders – ignore these developments at your own peril.
Thom Holwerda,
I concur this could be a huge financial blow to mozilla. Mozilla will probably try to make it up from other search providers, but without google’s presence, the remaining bids are likely to be far lower. This could spell more layoffs as existing deals run out.
What is particularly unfortunately for mozilla is that this ruling covers google’s search monopoly, but NOT their browser monopoly (as far as I can tell).. This means that not only is mozilla’s google search fund in jeopardy, but they might not even get any relief on google’s browser monopoly front either.
BTW you linked the wrong court filing between Elon Musk and Altman. Here’s the filing for google:
https://www.documentcloud.org/documents/25032745-045110819896
I don’t think it’s that worrisome. If Google want to keep Mozilla running (which it should, since it’s in Google’s interest as well to keep Firefox alive and kicking) then Google and Mozilla could easily find another way to formalize – now we could say legalize – the same amount of the deal in a new form that would not relate to default search in Firefox, and Mozilla could just continue to have Google search set as the default, nobody could force them to set something else as default especially when it’s not controlled by any deal or contract.
l3v1,
We do not know how they will react. However it is entirely possible, they would also play “hardball” as a tactic.
In this fight Google is currently alone. But if they drop the Mozilla bid “since they have to”, I’m pretty sure they would expect Mozilla folks to argue on their behalf.
Let’s not forget, this is just a federal court ruling, not a final one.
//(which it should, since it’s in Google’s interest as well to keep Firefox alive and kicking) //
Google has Chrome, a competitor to firefox. So … why would they want to “keep firefox alive” … is it just to avoid monopoly lawsuits, or do they just want folks who use Firefox to use google for searching? I’m guessing it’s the latter …
rockwell,
Exactly.
For today’s Google (not the “ye olde Google”), keeping Firefox alive, but not thriving is the best option.
As long as Safari stays over 15%, no sane judge would touch Chrome as a monopoly.
NaGERST,
Why not? Chrome’s marketshare of browsers is higher than apple’s marketshare of phones, which EU courts have been going after. Going after google’s browser monopoly seems justified to me. It doesn’t make it likely though.
I agree about it being unfortunate that their browser monopoly is not being examined also. Many look past the fact the reason Google Chrome became the most used browser is because they used their monopoly in search to push everyone to download Chrome right at the top of their main search page. Without doing that, I don’t think Google Chrome would be where it is today. If Microsoft got in trouble for putting explorer in Microsoft Windows, why didn’t Google get in some trouble for basically pushing people to install Chrome on their main search page.
RIP Mozilla. I’m all for healthy competition. I’ve been thinking about this since 2002 or so when my favorite search engines were crushed by google. Google for all of the bad things it does, has given a lot as well. But it also will kill any product at any time that its not interested in. Mozilla isn’t even their company. If the court’s actions is to try and reduce their search monopoly, I think this is probably the first one that they’d agree to.
Bill Shooter of Bul,
I really wish regulators would take preventative measures to curb anti-competitive practices with a light touch early on. Instead we see dominant companies that put consumers through decades of abuse and when regulators finally get involved it’s years after the problems started and they’re forced to contend with far more extreme remedies than could have been used earlier. Regardless of the outcome, the market damage is already done.
Sure, I see their value too. However I liked them better when they were nimble and competing over users rather than at the top and being complacent. We see this same pattern with monopolies over and over again. The business strategy shifts from making the best products & services possible to preventing the competition from having access to the market. Whether it’s apple, microsoft, google, facebook, etc they’re all guilty of it and it really sucks.
Alfman,
I usually phrase it like: “people wanted to be on Google products, now they have to be”
GMail BETA was a prime example. People were selling invited on eBay.
How many consumers, today, would pre-order a Google product with enthusiasm?
“I really wish regulators would take preventative measures to curb anti-competitive practices with a light touch early on.”
Sadly, just as with laws which are written after the fact, regulators aren’t gonna regulate when the market is 65% and 35% or similar things.
Lennie,
IIRC antitrust prosecution doesn’t require a monopoly. Duopolies and even oligopolies can violate antitrust provisions. But I think the decisions to actually prosecute end up being more political than anything. Many view US corporate dominance as a good thing because even though competition suffers, foreign competition suffers too. Not only are big businesses cherished in the political and financial spheres, but most people with retirement portfolios have some stake in the dominant tech companies including google.
There is not much incentive to go after abusive practices unless the imbalances are so obvious and egregious that they cannot be ignored. The entire process is rigged to favor big business. So for better or worse I predict big businesses and conglomerates will continue to get red carpet treatment while the days of healthy competition between smaller players are well and truly gone.
Google search is a monopoly, but also a Verb. And this is the fundamental issue here. You can make changes to Google, but anything short of forcing a name change will mean the majority of users will continue to use it.
My mother still enters Google.com and searches for BBC.com. No matter how many times I point out she doesn’t need to go to Google first, for her (and many) “that’s how the Internet works”.
The other thing to consider is the alternatives. Bing (Microsoft) and OpenAI (Microsoft ish) with all the other engines being more or less white labels on top of Bing. Maybe Yahoo might make a comeback?
What I expect will happen is the Internet will become walled gardens again, returning to the AOL model as its easier for a smaller engine to buy some brands (like reddit) rather than trying to get anywhere near Google ubiquity
I’m sure Mozilla could get by with much less money if they just focused on developing the browser and not on CEO salaries and toxic political shit
The potential loss of most of Mozillas’ income, and all this Google stuff (with Chrome/Edge) has me thinking a lot about my old browser project from back in the day.
The premise was that the browser blob would be the bare minimum required to offer an engine, focusing effort on maintaining a plugin system. Basic navigation? Plugin. Cookie management? Plugin. Bookmarks? Plugin. Plugins all the way down until you hit the API. Build that on a repo system so users, companies, or vendors could select where they source the plugins from, and it would take a huge amount of control away from the developer, who would only really control the default profile of their distribution. By removing a lot of temptation (or opportunity) to abuse the manifest format or bundle-in unwanted features (because the dev themselves rely on that manifest) it would lead to a more “honest” browser because it would be easy to dump the developer if they started pulling crap. It’s hard to do crap like 3rd-party cookies or a ‘privacy sandbox’ if users can just yank it or vendors can disable it.
I kick myself for not sticking it out and finishing what I started. I wasn’t as experienced as I am today, and I built on the shifting sand of trendy tech. Some of the ideas are still pretty solid though; I still have some outlines that hold up, like extensions to the Mozilla manifest that would enable ‘service’ plugins and more comprehensive button registry. It’s also becoming very feasible to build the browser using something like Electron alone, something that is crossing my mind a lot these days.
… But before people complain about the Webkit/Blink monosystem, I’m going to turn around and put the full blame on Mozilla. It’s MOZILLAs fault. The morons running that show decided maintaining embeddability wasn’t a “priority” and opted-out of being a major player, before shooting themselves in the other foot by abandoning their escape-hatch Servo in a half-finished state. It’s why every Gecko browser looks like Firefox, because Mozilla couldn’t be bothered with stabilizing an API, so the thing is built like 90’s Windows where everything is integrated and can’t be separated… I can’t even consider Servo again because it’s unusable as a development tool, because the developers are too busy playing catch-up after years of rot.
Anyway, Mozilla is going to have to figure something out because their continued existence means compromising on a good decision. If Mozilla folds, or winds up under the Linux foundation or something, IMHO they’ve done it to themselves.
Yeah, I agree embeddability wasn’t a priority was a mistake, but I do think in part this was because of how they were trying to change things (especially performance, security, compatibility, etc, front) to stay relevant. Remember they had a lot of issues at certain points in their existence, lots of legacy code that needed to be rewritten, etc. If they made the engine embeddable to early they would be stuck with an API connected to their legacy code that they wanted to get rid off.
Maybe their biggest legacy (in the other sense) is the Rust and even Javascript programming languages. And a lot of W3C/IETF standards.