Google Is a Monopoly: Judge Rules Against Tech Giant in Landmark Antitrust Case

AMY GOODMAN: We begin today’s show with what’s being described as the biggest antitrust case of the 21st century. On Monday, a federal judge ruled Google has illegally maintained a monopoly over the internet search market. In his ruling, Judge Amit Mehta wrote, quote, “Google is a monopolist, and it has acted as one to maintain its monopoly,” unquote.

The decision came in a lawsuit brought by the Justice Department. On Monday, Attorney General Merrick Garland said, quote, “This victory against Google is an historic win for the American people. No company — no matter how large or influential — is above the law,” unquote.

We’re now joined Matt Stoller, director of research at the American Economic Liberties Project. He’s the author of Goliath: The 100-Year War Between Monopoly Power and Democracy, also writes the monopoly-focused newsletter Big.

Matt, welcome back to Democracy Now! This is an historic moment when it comes to monopolies in this country. Can you describe the significance of this ruling?

MATT STOLLER: Yeah. Well, this is a huge deal. It’s basically a question, this whole — for the last couple years as we’ve been investigating these dominant corporations, the question has been: Who runs this country? Is it a small group of people that make choices about what we can see online, or is it the public, through competition?

And the decision of this judge to say that this $2 trillion giant, that controls the internet, controls what we see, controls our phones — or a lot of what’s on our phones — controls mapping, controls email, controls all of these ways that we talk and communicate with each other, has huge political power, that what they’ve been doing is illegal and is going to be remedied, that’s a huge deal. It’s just — and people think about this as kind of a technical question, monopolies and business and blah, blah, blah, blah, blah. This is actually the foundation of how we live as a society. And this decision is really, really good.

JUAN GONZÁLEZ: And, Matt, if you can, for people who have not followed the case, what is the essence of the judge’s ruling in terms of how — the illegality involved in Google’s actions, as opposed to just it having a superior product for searching?

MATT STOLLER: Right. Yeah, that’s a great question. That’s kind of the key to the case. So, everybody uses Google. It’s the best search engine, and everybody knows that. The question is why.

And the allegation from the government is that Google — when you make a search engine, you know, you can look for things, and a search engine will deliver you results. Every time that search engine has a user, it can see what that user does, and it tweaks the results and makes them better. So, the use of the product improves the product.

And what Google was doing is they were buying up all of the outlets for distribution — they were paying Apple, they were paying Mozilla, Verizon, everywhere you might get access to a search engine — and saying, “We’re going to give you money to preload Google as the search engine there and not put anyone else there.” And what that did is it made it so that nobody else could get enough users to make their search engine good enough to compete with Google.

So, Google is the best product. It has the best quality, but that’s because of their scheme to monopolize, to put the preset defaults everywhere. Basically, all the shelf space in the entire world for browsers — or, sorry, for search engines, Google bought it up. And the judge said, “No, you can’t do that.” And now we’re going to go to the next stage to figure out: Hey, what do we do about their monopolization scheme?

JUAN GONZÁLEZ: And didn’t the judge also rule that that monopoly allowed them to artificially inflate what they were charging advertisers, as well?

MATT STOLLER: Yeah. So, the specific harm — right? — the monopolization was in controlling the access to distribution of search engines and thwarting rivals. But what Google did with that monopoly was it raised prices for advertisers. And what that means is there’s a tax. Google is a $2 trillion company. The reason it is so valuable is because it effectively can tax every company in the economy for marketing. So, if you need to get your information out, you have to give a vig to Google. Google is one of a few companies like that. And that’s what they did. Then they kept raising prices, and that’s why they’re so valuable.

AMY GOODMAN: So, Matt, what happens now?

MATT STOLLER: Well, so, you know, the next stage is that there — this stage of the trial was to figure out if Google had violated the law. And Google has violated the law. That, we know.

The next stage — right? — which is going to be a new kind of semi-, like, sort of trial, is what’s called the remedy phase, where the government is going to say, “Here’s what we want you to do to fix the problem” — get rid of the exclusive contracts, break up the company, share the data, delete the data, whatever it is. And they’re going to argue about that for a while. And then the judge is going to make a decision in how to actually fix the problem, the remedy phase.

At the same time, or maybe before or maybe after, because, you know, these are all questions up in the air, Google is going to appeal. And the appeal will probably go all the way to the Supreme Court. So, the next couple of years, we can imagine that there’s going to be decisions about what’s going to happen to Google’s business model, and then, also, whether this decision will be upheld.

In a broader context, though, tomorrow, everyone in Silicon Valley is going to start saying — including people at Apple, are going to say, “All right, we can no longer have these agreements with Google where we get money.” I mean, Apple is getting $20-$30 billion a year from Google. That agreement, they’re going to have to plan to not get that money anymore, so they’re going to probably create their own search engine. So, this is going to start — and venture capitalists, investors, entrepreneurs are going to say, “All right, this is a different moment. We’re going to start to innovate.”

And more broadly, these kind of arrangements that Google has had with all these companies in buying up all the shelf space, they are now considered illegal, [inaudible] orchestrated by big companies across the economy. So every big business CEO is going to get a memo saying, “Hey, this Google thing happened. Are we doing anything similar to Google? And if we are, maybe we should sort of pull back, for fear of being sued for monopolization.” So, it’s going to have huge effects across the internet for Google, and then also across the economy in the way big business operates.

JUAN GONZÁLEZ: And, Matt, Google is not the only company the Biden administration’s antitrust division has gone after. They also have cases pending against Amazon, Meta, Apple. Could you talk about this effort by the Biden administration to really clamp down on the tech sector especially?

MATT STOLLER: Yeah. Yeah, so, also they’re suing Ticketmaster, which I think is the most fun lawsuit. But they have lawsuits against, you know, the biggest companies in the world, which are companies in the tech sector. They also have cases against — in meatpacking, rent fixing, seeds and chemicals, across the — healthcare, across the board. But the big ones are the ones you mentioned, which are the multitrillion-dollar companies. And the idea there is that you have a series of gatekeepers, of chokepoints, who control the most important part of our economic order, or these are the pacesetters for our economic order, which are the tech companies.

And what the Biden administration is trying to do is they’re trying to say, “No, look, the internet has to be an open place where we can actually communicate with one another and sell goods and ideas to one another, without these corrupt, monopolistic intermediaries. And to break their control, what we’re going to do is we’re going to force allowing competitors to come into the market and push aside these middlemen by saying not, you know, ‘You guys can’t do business anymore,’ but ‘You can’t engage in coercive behavior to thwart rivals.’” And this Google decision is the first major decision in a government case saying, “Yes, Big Tech comes under the antitrust laws. They can’t do what they’ve been doing.” And we’re going to see cases against Facebook, Amazon, Apple, and then also more cases against Google, as well.

AMY GOODMAN: Matt, in our last minute, can you also talk about the recent attacks on Lina Khan, the commissioner of the Fair Trade Commission? Several billionaire Democratic Party donors, including LinkedIn co-founder Reid Hoffman and Barry Diller, have publicly pushed Kamala Harris to fire Khan, who has led Biden’s antitrust efforts. Hoffman sits on the board of Microsoft, which was sued by the FTC.

MATT STOLLER: Yeah. So, the big — one of the big risks to these cases is the next administration. So, Trump actually originally brought the Google case, but he has sort of turned away from his — whatever economic populism he had in 2016 in this campaign. And Kamala Harris is known to be close to Big Tech oligarchs in Silicon Valley, including Reid Hoffman, founder of LinkedIn, board of Microsoft, under investigation, and, you know, a bunch of others. And so, the risk here is that we don’t know who’s going to win, but whoever does win, they might want to settle this case on the cheap. And honestly, I’m very worried about that.

I mean, there are reasons to think that that won’t happen, but I don’t think there’s any evidence at all that Kamala Harris is behind these cases or is behind constraining big business. I think she’s very clearly friendly to big business. The campaign is doing fundraising events with these billionaires. They’re not saying anything.

And the signpost of it is that Lina Khan, who’s the chair of the Federal Trade Commission, is kind of the most famous representative of this new framework of addressing concentrated corporate power, a new trade regime, a new way of saying, “You know, business really should underlie productive activities; it shouldn’t just be extractive.” You know, Lina Khan is the symbol of that new framework. And Kamala Harris’s backers and her close advisers really don’t like Lina Khan, and they don’t like this whole framework. And so, that’s going to be a really big fight, assuming that Kamala Harris wins, which we don’t know. But it’s going to be a fight, regardless of who wins, to maintain and expand this effort to really restore democracy in the commercial sector.

AMY GOODMAN: I want to thank you, Matt Stoller, so much for being with us, director of research at the American Economic Liberties Project, author of the book Goliath: The 100-Year War Between Monopoly Power and Democracy.

Coming up, we go to Bangladesh. The Parliament has been dissolved the day after the prime minister resigned and fled to India following weeks of student-led protests and the killing of hundreds of students. Stay with us.