For its part, Google has long argued that its dominance of search is due to a superior product — not because of any financial deals with device makers like Apple that give it an unfair advantage over rivals. Google contends that it should not be penalised for making its product easily available. The search engine giant notes that the default inclusion of rival Microsoft’s Bing on the Windows operating system has not significantly helped Bing’s market position over the years. Mehta in his ruling agreed that despite being a “monopoly”, Google has had by far the best search engine on earth and had spent a lot of money every year to keep improving it, something that monopolies are loath to do.
If you want to know what a big monopolist looks like, look no further than Google. The search behemoth with a 94% market share hands out over a whopping US$50 billion ($66 billion) every year in “traffic acquisition cost” payments to device makers like Apple and Samsung Electronics, US wireless carriers AT&T, Verizon and T-Mobile as well as browser developers such as Mozilla, Opera and UC Web — which compete with its own Chrome and Apple’s Safari — to secure default status for its eponymous search engine. Apple alone receives over US$20 billion every year to make Google the preferred search engine on its devices. The search giant also prevents counterparties from dealing with competitors because it requires placement of Google apps in prime device positions.
On Aug 5, the US District Court for the District of Columbia ruled that Google, a subsidiary of Alphabet Inc, had violated Section 2 of the 134-year-old railroad-era Sherman Act, which prohibits monopolies. In an extensive 286-page ruling, Judge Amit Mehta found that Google had used its monopoly to strengthen its position through exclusive deals with Apple and others to be the default search engine on iPhones and devices running on Google’s own mobile operating software, Android. He ruled such deals as illegal because they helped Google maintain a monopoly. Google is appealing the ruling.
