Google’s Monopolist Ruling Could Bring Significant Sports Changes

In finding that Google has violated Section 2 of the Sherman Act, U.S. District Judge Amit P. Mehta held Monday that “Google is a monopolist, and it has acted as one to maintain its monopoly.” 

Although the ruling doesn’t compel Google to take any immediate action, it sets the table for potential changes that could significantly alter how consumers search for information online and how businesses reach those consumers.

That’s true of sports fans, teams, leagues, athletes, NIL influencers, sneaker businesses, media companies, marketing firms and numerous others with sizable stakes in athletics. They could all see changes in their online experience that pose economic repercussions.

U.S. v. Google centers on the Justice Department’s contention that Google wrongfully uses exclusive agreements to secure default status “on nearly all desktop and mobile devices in the United States.” Google, the DOJ maintains, is a monopoly in three markets: general search services, search advertising and general search text advertising. 

Last September, Mehta presided over a bench trial (no jury) that lasted nine weeks. The trial included dozens of witnesses, numerous experts and over 3,500 evidence exhibits. Mehta has praised the lawyering as “first-rate throughout” in a case that began when the DOJ and 14 states sued in 2020 (a group of other states filed their own lawsuit, which is incorporated into Mehta’s ruling).

Much of the case concerns Google using contracts to ensure its “out-of-the-box default search setting.” Google has signed distribution contracts with browser developers, wireless carriers and mobile device companies to obtain status and, Mehta found, suppress competition. 

For example, Google is the default search engine for Safari and Firefox browsers. The Google Search Widget, which is cumbersome to replace, is also on “all android devices,” and for all devices except Samsung, Google’s Chrome “is preloaded as the exclusive browser.” This strategy for exclusivity, Mehta reasoned, effectively blocks Google’s rivals.

Search engine data mentioned in Mehta’s 277-page opinion similarly paints a stark picture. In 2020, 89.2% of search queries and 94.9% of those made on mobile devices, went through Google. Microsoft’s Bing placed a distant second place with a meager 6%.

Mehta conceded that Google’s market dominance is partly a reflection of merit and sound judgment. He acknowledged the company’s “highly skilled engineers” as well as its consistent innovation and “shrewd business decisions” as playing instrumental roles. 

But more problematic to the judge is Google’s acquisition of “default distribution,” meaning Google’s strategy of making its search engine the default or preloaded option. Mehta noted that gaining default status is invaluable since “many users simply stick to searching with the default” rather than trying another one. Google then utilizes search data, including through users’ search histories and activities, to refine its engine to further disadvantage rivals. The company also uses its search engine dominance to secure massive revenues in advertising, with a roughly 210% increase from about $47 billion in 2014 to approximately $146 billion in 2021.

Mehta concluded Google has monopoly power over the markets for general search services and general search text ads, including charging higher-than-market prices for general search text ads. On the other hand, Mehta sided with Google that the company lacks monopoly power in the market for search advertising. He reached several other conclusions of law supportive of the company. 

Still, Mehta’s major finding is that Google violates antitrust law. The 53-year-old judge added he was “taken aback by the lengths to which Google goes to avoid creating a paper trail for regulators and litigants” and surmised Google “trained its employees, rather effectively, not to create ‘bad’ evidence.”

Mehta has ordered the parties to submit a joint status report by Sept. 4 for determination of a schedule for proceedings regarding remedies. They will appear before the D.C.-based Mehta on Sept. 6. 

Mehta could order a range of remedies that, by injunction, limit Google’s use of exclusive contracts or even require company assets be divested. The DOJ says that the “central goals of remedies” in monopoly cases “are to terminate the defendant’s unlawful conduct, prevent its recurrence, and re-establish the opportunity for competition in the affected market.”

“This victory against Google is an historic win for the American people,” U.S. Attorney General Merrick Garland said Monday. “No company—no matter how large or influential—is above the law.”

Kent Walker, Google’s president of global affairs, released a statement to media noting that Mehta’s ruling “recognizes that Google offers the best search engine,” though Walker acknowledged the judge concluded “we shouldn’t be allowed to make it easily available.” Google is expected to appeal Metha’s ruling to the U.S. Court of Appeals for the District of Columbia Circuit. With Google found to be a monopolist, the Department of Justice, states and other parties could bring additional litigation against Google. 

As Sportico has explained, a downsizing of Google’s presence could alter sports leagues’ marketing strategies and partnerships with technology companies. Ticket, apparel and sneaker companies, including those in partnership with leagues and players, pay for ads to appear on the first page of Google searches or with prominence on Google-owned YouTube. Media companies also try to “game” Google results to increase hits to stories. All these strategies could be altered with a search market where Bing or other search engines have larger presences.