David McCabe, reporting for The New York Times:

Google acted illegally to maintain a monopoly in online search, a federal judge ruled on Monday, a landmark decision that strikes at the power of tech giants in the modern internet era and that may fundamentally alter the way they do business.

Judge Amit P. Mehta of U.S. District Court for the District of Columbia said in a 277-page ruling that Google had abused a monopoly over the search business. The Justice Department and states had sued Google, accusing it of illegally cementing its dominance, in part, by paying other companies, like Apple and Samsung, billions of dollars a year to have Google automatically handle search queries on their smartphones and web browsers.

“Google is a monopolist, and it has acted as one to maintain its monopoly,” Judge Mehta said in his ruling.

I’ve been saying since this lawsuit was filed that Google has no business paying Apple $18 billion yearly to keep Google the default search engine on Safari, and I maintain that position. Google is indisputably, without question, a monopolist — the question is, does paying Apple billions a year constitute an abuse of monopoly power? I don’t think so, because even if the deal didn’t exist, Google would still be the dominant market power in search engines. Google’s best defense is that its product is the most beloved by users, and its best evidence to support that claim is its market share among Windows PC consumers: nearly all. Microsoft Edge and Bing are the defaults on all Windows computers, yet practically every Windows user downloads Chrome and switches to Google as soon as they set up their machine. The data is there to support that.

Google’s best defense would have been to immediately terminate the contract with Apple and all other browsers, then prove to the judge that Google still has a dominant market share because it is the most loved product. That’s a great defense, and Google blew it because its legal team focused on defending the contract rather than its search monopoly. Again, I don’t think this specific contract is illegal under the Sherman Antitrust Act, but Google fell into the Justice Department’s trap of defending the contract, not the monopoly. The government had one goal it wanted to accomplish in this case: break up Google. It conveniently found a great pathway to victory in the search deal because on the outside, it appears like a conspiracy to illegally maintain a monopoly. The deal, by itself in another case, could be illegal, but Google’s monopoly over the search market isn’t.

A monopoly is illegal under the Sherman Antitrust Act when it “suppresses competition by engaging in anticompetitive conduct,” by definition of the law. Bribing the most popular smartphone maker in the United States to pre-install Google on every one of its devices, by essentially every angle, looks like a textbook case of unlawful monopolization, but that is not what Google is doing. It has no reason to pay Apple — I don’t know how much I have to press this case for the world to get it. If Google stopped paying Apple, its search monopoly wouldn’t crumble tomorrow. If all the Justice Department wants is for Google and Apple to terminate their sweetheart deal, Google will still be as powerful as it was before the lawsuit. Everyone knows this — Apple, Google, and the Justice Department — which is why the government won’t let Google off so easily.

Now that Jonathan Kanter, the leader of the Justice Department’s antitrust division, has won this case with overwhelming fanfare, he has the power to break apart Google’s monopoly. Judge Mehta didn’t just rule the contract was illegal; he said Google runs an unlawful monopoly, which is as close to a death sentence as Google can receive. It is hard to overstate how devastating that ruling is for Google, but I don’t feel bad because its legal defense focused on a bogus part of the case. The contract is now the least of Google’s problems — and always has been — because it’s officially caught up in a circa-1990s Microsoft antitrust case. Either the Justice Department levies harsh fines on the company, or it will request it be broken up in some capacity. Both scenarios are terrible for Google.

I am and will continue to be frustrated at the judge’s ruling on Monday, but I also have to admire the sheer genius of the Justice Department’s lawyers in this case. It was marvelously conducted, and the department didn’t make a single mistake. It took an irrelevant side deal, shone the spotlight on it, and used that as a catalyst to strike down Google’s monopoly for no reason. Google is a dominant player in the search engine market because it is the best product and has been for years; if Google suddenly wasn’t the default search engine on iPhones, its percentage of the market would drop by a maximum of 5 percent, and that’s being especially gracious to the company’s competitors. There is nothing the government or anyone else can do to defeat Google’s popularity — period.

Who the contract impacts the most, however, is Apple, though I predict the effects of Monday’s ruling will be short-lived at Apple Park. Apple made $85.2 billion in services revenue in the fiscal year of 2023, with about $20 billion per quarter, so yes, $18 billion less in yearly services revenue will hurt, as that’s roughly a 25 percent reduction in Apple’s second-largest moneymaker. Analysts on Wall Street, as they always do, will panic about the falling apart of this very lucrative search deal, and Apple probably won’t recover for at least a year, but I also think Apple is smart enough not to base a large part of its fiscal stability on a third-party contract that could theoretically fall apart any minute and that fluctuates depending on how much Google makes in ad sales. My point is that it’s a volatile deal that a company as successful and financially masterful as Apple wouldn’t rely on too much. The much bigger threat to Apple’s business is the Justice Department’s antitrust suit against it.