The Strategist

WSJ foresees serious consequences for the market due to Google's court loss to the U.S. DOJ



08/07/2024 - 04:52



Google, a subsidiary of Alphabet Inc., was defeated in court in a case filed by the U.S. Department of Justice, alleging that the company had impeded competition in the search services industry. The Wall Street Journal writes that this may have significant ramifications for not just Google, but also its biggest allies and rivals.



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Federal Judge Amit Mehta determined that by incentivizing other companies to make its search service the default option on their browsers and mobile devices, Google hindered access to the market for its rivals. The WSJ points out that these actions have been deemed illegal.

Google intends to challenge the court's ruling, and the legal process could last for years. If this endeavor fails, the search services market, traditionally controlled by a single company, could undergo significant transformation, according to the newspaper.

The outcomes of the court ruling can vary, but most will result in a decrease in the amount of search queries handled by the company's service.

Herbert Hovenkamp, a professor at the University of Pennsylvania Law School, predicts that the court will probably stop the practice of compensating companies like Apple Inc. and Samsung to use Google's search engine as the default option.

According to the expert, device manufacturers and creators of browsers will have the option to select the default search engine or provide users with a selection of choices.

In 2020, Google reported that not having its search engine as the default option on Safari browser and iOS mobile devices would result in a 60-80% decrease in searches on iPhones and iPads.

Numerous experts think that a large number of users will opt for Google as their preferred search service without the need for Google to pay companies like Apple, Samsung, etc.

Microsoft Corp, by utilizing its Bing search engine, has the potential to benefit from the shift in practices. The company once proposed giving Apple all of the ad revenue from the search service on iPhones and iPads if Bing became the default, but Apple chose to work with Google instead, according to the WSJ.

Mehta's choice may result in the world's top two mobile device manufacturers losing billions of dollars in revenue from Apple every year.

source: wsj.com