Google has big stakes at stake as a federal judge considers whether the tech giant’s search empire should be broken up.
So does the rest of Silicon Valley.
A landmark antitrust case pitting Google (GOOG, GOOGL) against the Justice Department entered its final stages last week as prosecutors from the federal government and 14 states said in their closing arguments that Google had illegally monopolized the markets of online search and search advertising.
Google lawyer John Schmidtlein once again refuted a claim the company has made all along: “Google wins because it’s better,” he said.
A government victory would certainly threaten a giant share of Google’s capital. $237.8 billion profit engine. But the outcome, which will be decided by U.S. District Judge Amit Mehta In the coming weeks or months, this will also have far-reaching implications for some of the other big names in the tech world.
Indeed, Apple (AAPL), Amazon (AMZN) and Meta (META) are defending themselves against a series of other federal and state antitrust lawsuits, some of which make similar allegations, and because all three risk to lose or win. depending on the result.
In Apple’s case, U.S. lawyers alleged that the iPhone maker prevented competitors from entering the smartphone market by using a “web of contractual restrictions.”
A similar claim was made by the government in the Google case, which relies on several types of contracts that Google allegedly used to consolidate its search dominance.
“The big lessons are still a long way off, but this is clearly a very important moment where the very first of these tech cases is going to be decided,” said Douglas Ross, an antitrust professor at the University of Washington.
“I think they’re going to be interested in the scope or scope of this project. [the judge] defines the markets here,” Ross added, “and if there are lessons in what he writes, it could be applied elsewhere.”
The government claims that Google violates Section 2 of the Sherman Act by preventing competitors from entering three distinct markets: general online search, search advertising, and search text advertising.
In general, Ross said, prosecutors are inclined to craft narrower market definitions to make it easier to prove that a defendant has a monopoly.
How courts respond to these arguments will be important, he added.
Harry First, a law professor at New York University, said the impact of Google’s case also depends on the extent to which the judge accepts or rejects one of the government’s antitrust theories, which holds that class actions of Google are described as anti-competitive.
This strategy has not been successful thus far for the DOJ, including in its landmark case in the 1990s that ultimately forced Microsoft (MSFT) into a deal to open its operating system to early competitors. .
