A United States district judge ruled Monday that Google illegally used its market power to create a monopoly over online search, a decision with far-ranging ramifications including in travel, where the four biggest online travel agencies spent a combined $16.8 billion on sales and marketing last year — much of it going to Google.
Travel companies have been complaining for years about Google’s digital search and advertising dominance. During the 10-week antitrust trial last year in Washington, D.C., a 2019 letter to Google from Expedia Group chairman Barry Diller surfaced in which he expressed his frustration with search results.
“I must say I’m on the edge of revolt now that Google’s actions are so punitive, not just for Expedia but also for … all the players that depend upon something of a level playing field,” Diller wrote.
His words proved prophetic. As U.S. District Judge Amit Mehta wrote in his 277-page ruling, “Google is a monopolist, and it has acted as one to maintain its monopoly.”
The judge found that Google violated Section 2 of the Sherman Antitrust Act, illegally securing its dominance in the search market by paying billions of dollars to smartphone carriers like Apple and Samsung to make Google the automatic search engine for their phones.
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“This landmark decision holds Google accountable,” Justice Department antitrust official Jonathan Kanter said in a statement. “It paves the path for innovation for generations to come and protects access to information for all Americans.”
Google said it will appeal the ruling.
“This decision recognizes that Google offers the best search engine but concludes that we shouldn’t be allowed to make it easily available,” Kent Walker, Google’s president for global affairs, said in a statement.
The ruling concerned only whether Google violated antitrust laws. The judge will decide what steps should be taken to address Google’s monopoly in a separate proceeding. They could range from specific orders regarding the company’s business practices or even a directive that Google sell of parts off its business.
A separate federal trial is scheduled in September over allegations from the Justice Department that Google’s advertising technology represents an illegal monopoly.
While the full impact on travel companies won’t be immediately clear, it could lead to lower advertising costs, said Brennan Bliss, CEO of digital travel marketing agency Propellic.
“Today’s antitrust ruling against Google could significantly impact travel companies that depend on Google for bookings – mostly for the better,” Bliss told PhocusWire in an email response, adding, “We might see lower advertising costs and new opportunities on different platforms – Bing, DuckDuckGo, and more.”
The U.S. Justice Department first brought the antitrust suit in 2020. The government argued that by paying billions of dollars to be the automatic search engine, Google denied competitors the chance to compete with its search engine. With the data Google collected from consumers, it made its search engine even better.
Its dominance also allowed the company to raise advertising prices, practically at will, the judge found.
“The only apparent constraint on Google’s pricing decisions are potential advertiser outcry and bad publicity,” he wrote.
Travel companies were making noise about Google’s behavior before the suit was filed.
In May 2020, Expedia Group’s then CEO Peter Kern said the company had been “over-reliant” on Google. Also that year, Tripadvisor’s then-CEO Steve Kaufer complained that the company’s earnings had suffered “as Google continues to siphon off high-quality traffic that would otherwise have visited Tripadvisor.”
With the filing of the suit that October, Viator founder Rod Cuthbert predicted trouble for Google.
“While up until now Google has been cavalier in placing its own offerings first in search results, thus abusing its monopoly power, sometime in the not too distant future it will start to ask itself how well such actions are perceived by the world at large, including the Justice Department and its end-users,” Cuthbert said, adding, “Once Google has to fight for users on even ground, it will lose its enthusiasm for competing with its advertising customers.”
*PhocusWire senior reporter Morgan Hines contributed to this report.
