Antitrust lawsuits, which had faded from prominence for decades, are now seeing a resurgence. Though recent attempts to block mergers have largely been unsuccessful, there is growing optimism among some experts regarding the ongoing efforts of the Department of Justice (DOJ) and Federal Trade Commission (FTC) under Section 2 of the Sherman Act to curb allegedly anticompetitive behaviour by large tech companies. Nevertheless, uncertainty remains about the agencies' ability to prove that certain firms’ actions caused anticompetitive harm, and the threshold required to establish causation remains a topic of debate.
In the case of United States v. Google, LLC, the U.S. District Court for the District of Columbia ruled that Google had unlawfully maintained monopoly power in two online markets through exclusive agreements that resulted in anticompetitive harm. The ruling clarified the ambiguity surrounding the appropriate causation standard for establishing liability, selecting a lenient standard and applying it flexibly. This decision effectively broadened the DOJ’s and FTC’s capacity to regulate business practices.
Since the early 2000s, Google has dominated the market for general search services. General search refers to "the market for operating and offering a general search engine" that scans the entire internet, rather than focusing on a subset of pages or topics, to return results. For years, many attributed Google’s dominance to its talent and quality. However, antitrust agencies began questioning whether other, less benign factors were at play.
After over a year of investigation, the DOJ, joined by the attorneys general of eleven states, filed a lawsuit against Google on October 20, 2020, in the U.S. District Court for the District of Columbia. The complaint accused Google of violating Section 2 of the Sherman Act by entering into exclusive agreements to secure default distribution of its search and advertising services, thereby maintaining monopolies in three online markets.
Just two months later, on December 17, 2020, thirty-eight states filed their own lawsuit against Google, raising additional claims of monopolisation in a fourth market, as well as exclusionary conduct targeting specialised vertical providers (SVPs) and users of Google's advertising platform. On January 7, 2021, the court agreed to consolidate both cases for pretrial purposes before combining them for trial.
After a trial that ran from September to November 2023, the court largely ruled in favour of the plaintiffs. Judge Mehta declared that “Google is a monopolist, and it has acted as one to maintain its monopoly.” The court defined the relevant product markets as general search services and general search text advertising, following the market definition factors outlined in Brown Shoe Co. v. United States. I
t was determined that Google possessed monopoly power in these markets, based on both direct and indirect evidence. The court then assessed whether Google’s distribution contracts could be considered exclusive agreements, concluding that agreements with companies like Apple, Mozilla, and Android distributors constituted exclusive dealing. These agreements did not explicitly bar rivals like Bing or DuckDuckGo, but the court found that they were sufficiently exclusive in practice to foreclose competition.
The court further concluded that Google’s exclusive agreements caused anticompetitive effects. In the case of general search text advertising, the agreements were found to foreclose 45% of the market, enabling Google to increase advertising prices, lower quality, and reduce competitors’ revenue. Similarly, in the general search services market, Google was found to have foreclosed 50% of the market by query volume, citing expert testimony from Dr. Michael Whinston, who showed that “50% of all [general search engine] queries in the United States are run through the default search access points covered by the challenged distribution agreements.” This finding supported Judge Mehta’s reliance on the lenient causation standard from United States v. Microsoft Corp., which allows courts to “infer ‘causation’” when anticompetitive conduct is “reasonably capable of making a significant contribution to … maintaining monopoly power.”
The ruling in United States v. Google carries significant ramifications for the broader tech industry, particularly in terms of how antitrust enforcement may evolve in the coming years. With antitrust agencies gaining a stronger foothold in regulating monopolistic practices within the tech sector, this case sets a precedent for more aggressive scrutiny of not just Google but also other major tech players, such as Amazon, Apple, and Facebook.
The lenient causation standard established in this case could embolden regulators to challenge business practices across the digital landscape, especially those that involve exclusive agreements or market control mechanisms. This increased regulatory pressure could prompt tech companies to re-evaluate their business models, possibly leading to more transparency in their dealings, adjustments to market strategies, or even structural changes.
Moreover, as the government seeks to curtail monopolistic behaviour, the scope of antitrust investigations may expand to encompass other key areas, such as data privacy, platform dominance, and the management of digital marketplaces. The Google decision could thus spark a new wave of antitrust actions that reshape the tech sector’s regulatory landscape, influencing how large corporations navigate competitive fairness in an increasingly scrutinised industry.
The court’s decision to apply a lenient causation standard in this case has far-reaching implications. By following the Microsoft framework instead of the stricter Rambus standard, Judge Mehta has allowed for a broader interpretation of when anticompetitive harm can be inferred from exclusive agreements.
In prior cases, such as Microsoft and Rambus, courts struggled to define the appropriate standard of proof for when monopolistic conduct crosses into anticompetitive territory. In Microsoft, the D.C. Circuit recognised that enforcing a strict causation requirement could prevent the government from intervening in cases where monopolists were engaging in practices that may suppress emerging competitors. It allowed for an inference of harm when conduct was “reasonably capable of contributing significantly to a defendant’s continued monopoly power.” In contrast, Rambus involved a more stringent “but-for” standard, which required evidence that the conduct would have caused harm in a world without the defendant’s actions.
Judge Mehta’s decision in Google thus clarifies the application of these precedents, siding with the Microsoft approach. This choice expands the DOJ’s and FTC’s ability to challenge business practices under Section 2 of the Sherman Act. By relaxing the evidentiary burden for establishing causation, the ruling allows antitrust agencies to more easily block potentially anticompetitive conduct, although critics may argue that this could chill procompetitive activities.
The ruling in Google represents a shift in antitrust doctrine, where courts are now more willing to infer anticompetitive harm without requiring strict proof. Some may see this as a necessary step to rein in monopolistic behaviour in the tech industry, while others may view it as a hindrance to the growth of innovative companies. Regardless, as tech companies continue to clash with antitrust regulators, the debate over the proper standard for proving anticompetitive harm is set to continue.
