ANTITRUST Archives | PYMNTS.com https://www.pymnts.com/antitrust/2024/antitrust-trial-targeting-googles-digital-ad-business-to-begin-monday/ What's next in payments and commerce Wed, 04 Sep 2024 16:25:20 +0000 en-US hourly 1 https://wordpress.org/?v=6.6.1 https://www.pymnts.com/wp-content/uploads/2022/11/cropped-PYMNTS-Icon-512x512-1.png?w=32 ANTITRUST Archives | PYMNTS.com https://www.pymnts.com/antitrust/2024/antitrust-trial-targeting-googles-digital-ad-business-to-begin-monday/ 32 32 225068944 Antitrust Trial Targeting Google’s Digital Ad Business to Begin Monday https://www.pymnts.com/antitrust/2024/antitrust-trial-targeting-googles-digital-ad-business-to-begin-monday/ https://www.pymnts.com/antitrust/2024/antitrust-trial-targeting-googles-digital-ad-business-to-begin-monday/#comments Wed, 04 Sep 2024 16:25:20 +0000 https://www.pymnts.com/?p=2081208 A month after losing a landmark antitrust case, Google will reportedly face another antitrust trial that targets its digital advertising business. In a trial set to begin Monday (Sept. 9) in Alexandria, Virginia, the Department of Justice (DOJ) and a coalition of states allege that Google keeps competitors out of advertising technology markets and harms […]

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A month after losing a landmark antitrust case, Google will reportedly face another antitrust trial that targets its digital advertising business.

In a trial set to begin Monday (Sept. 9) in Alexandria, Virginia, the Department of Justice (DOJ) and a coalition of states allege that Google keeps competitors out of advertising technology markets and harms news publishers, Reuters reported Wednesday (Sept. 4).

If the plaintiffs win this lawsuit, they could ask the judge to order a breakup of Google, according to the report.

Google has denied the plaintiffs’ claims, saying that it doesn’t have to share its technology with rivals and that its products are interoperable with those of its competitors, according to the report.

The tech giant added that the plaintiffs’ narrow focus on website ads ignores the competition it faces in the growing advertising categories of social media, streaming TV and apps, per the report.

The DOJ and eight states filed the suit in January 2023, saying Google has illegally seized control of the online ad sector and that the solution is for a court to order the breakup of the digital search giant.

“Having inserted itself into all aspects of the digital advertising marketplace, Google has used anticompetitive, exclusionary and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” the DOJ said in the suit.

Google responded to the suit by saying the government was “doubling down on a flawed” argument that would hurt small businesses and drive up advertising fees.

“Today’s lawsuit from the DOJ attempts to pick winners and losers in the highly competitive advertising technology sector,” a Google spokesperson said at the time in a statement issued to PYMNTS.

In another antitrust case that was decided Aug. 5, a judge concluded that Google’s business practices violated antitrust laws, specifically the Sherman Act, by maintaining and abusing its monopoly power in the search and search advertising markets.

The company plans to appeal that ruling, Kent Walker, president, global affairs at Google, said at the time in a statement emailed to PYMNTS.

“This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available,” Walker said.

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Report: DOJ Sends Tech Companies Subpoenas in Nvidia Antitrust Probe https://www.pymnts.com/antitrust/2024/report-doj-sends-tech-companies-subpoenas-in-nvidia-antitrust-probe/ https://www.pymnts.com/antitrust/2024/report-doj-sends-tech-companies-subpoenas-in-nvidia-antitrust-probe/#comments Wed, 04 Sep 2024 01:29:50 +0000 https://www.pymnts.com/?p=2080646 The Department of Justice (DOJ) has reportedly escalated its antitrust investigation of Nvidia. After previously sending questionnaires to the chipmaker and other tech companies, the DOJ is now sending legally binding requests for information, Bloomberg reported Tuesday (Sept. 3), citing unnamed sources. This move signals that the government has moved a step closer to making […]

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The Department of Justice (DOJ) has reportedly escalated its antitrust investigation of Nvidia.

After previously sending questionnaires to the chipmaker and other tech companies, the DOJ is now sending legally binding requests for information, Bloomberg reported Tuesday (Sept. 3), citing unnamed sources.

This move signals that the government has moved a step closer to making a formal complaint against Nvidia, according to the report.

The investigation focuses on concerns that Nvidia’s acquisition of Run:AI will make it difficult for customers to switch to other chip suppliers and that Nvidia uses supply and pricing to penalize customers that don’t only buy its chips, per the release.

When asked about the probe by Bloomberg, the company said: “Nvidia wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them.”

It was reported Aug. 2 that the DOJ was looking into whether Nvidia has abused its dominant position in the market for artificial intelligence (AI) chips by charging higher prices if customers also buy chips from its rivals and whether the company pressures buyers of its chips to also buy other products like cables.

An Nvidia spokesperson said at the time that the company is happy to provide information to regulators.

“We compete based on decades of investment and innovation, scrupulously adhering to all laws, making Nvidia openly available in every cloud and on-prem for every enterprise, and ensuring that customers can choose whatever solution is best for them,” the spokesperson said.

Nvidia has been facing increasing regulatory scrutiny. The company has disclosed requests for information from regulators in the United States, South Korea, the European Union, the United Kingdom and China.

These requests relate to various aspects of its AI business, including GPU sales, supply allocation and partnerships with companies developing foundation models.

Nvidia has earned a spot among the world’s most valuable companies, driven by the wave of investor interest in AI. The company’s gains have been driven by its status as the dominant maker of chips that help power data centers that run the computing tasks needed by AI applications.

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Judge Says Plaintiffs Can File Amended Antitrust Lawsuit Against Google https://www.pymnts.com/antitrust/2024/judge-says-plaintiffs-can-file-amended-antitrust-lawsuit-against-google/ Mon, 12 Aug 2024 18:55:05 +0000 https://www.pymnts.com/?p=2051215 A federal judge in California is giving plaintiffs a chance to file an amended lawsuit after dismissing their antitrust lawsuit against Google. The lawsuit accuses the tech giant of unlawfully dominating web search on smartphones, Reuters reported Monday (Aug. 12). In a ruling delivered Friday (Aug. 9), U.S. District Judge Rita Lin said the plaintiffs […]

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A federal judge in California is giving plaintiffs a chance to file an amended lawsuit after dismissing their antitrust lawsuit against Google.

The lawsuit accuses the tech giant of unlawfully dominating web search on smartphones, Reuters reported Monday (Aug. 12).

In a ruling delivered Friday (Aug. 9), U.S. District Judge Rita Lin said the plaintiffs had not provided enough evidence showing harm from Google’s dominance of the market, according to the report.

Lin added that the plaintiffs could file an amended suit by Sept. 9, pointing to a Washington, D.C., court’s ruling in a separate lawsuit that was announced Aug. 5 and found that Google had created an illegal monopoly over search engines, the report said.

The case before the California court was filed in 2022 and alleged that Google had unlawfully become the exclusive preloaded default search engine on Apple devices, per the report.

Google has denied the allegations in both cases, per the report.

The Aug. 5 ruling by a Washington, D.C., court concluded that Google’s business practices violated antitrust laws, specifically the Sherman Act, by maintaining and abusing its monopoly power in the search and search advertising markets.

It centered on the company’s extensive and complex business practices that the plaintiffs said stifled competition and innovation. The judge’s ruling in that case outlined how Google’s practices created barriers to entry for competitors, thereby maintaining what the judge called its monopolistic status.

Google vowed to appeal the ruling. Kent Walker, president, global affairs at Google, said in a statement emailed to PYMNTS on Aug. 5: “This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available.”

The Aug. 5 ruling may also impact Apple, which has a search engine agreement with Google and may have billions of dollars and several percentage points of operating margin (and profits) hanging in the balance during the continuing court battle, PYMNTS reported Tuesday (Aug. 6).

U.S. District Judge Amit Mehta said in the ruling that default search agreements like the Apple/Google tie-up deny Google’s competitors access to search queries and user data needed to improve their products and ad platforms.

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UK’s CMA Launches Merger Inquiry Into Amazon Partnership With Anthropic https://www.pymnts.com/antitrust/2024/united-kingdom-cma-launches-merger-inquiry-amazon-partnership-with-anthropic/ https://www.pymnts.com/antitrust/2024/united-kingdom-cma-launches-merger-inquiry-amazon-partnership-with-anthropic/#comments Thu, 08 Aug 2024 14:46:45 +0000 https://www.pymnts.com/?p=2049271 Amazon’s partnership with artificial intelligence company Anthropic is being investigated by the United Kingdom’s competition and markets regulator. The Competition and Markets Authority (CMA) launched a merger inquiry after collecting comments in April and May on whether the partnership could result in a lessening of competition in the market, according to a Thursday (Aug. 8) […]

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Amazon’s partnership with artificial intelligence company Anthropic is being investigated by the United Kingdom’s competition and markets regulator.

The Competition and Markets Authority (CMA) launched a merger inquiry after collecting comments in April and May on whether the partnership could result in a lessening of competition in the market, according to a Thursday (Aug. 8) update.

The CMA said in a commencement notice that it has sufficient information to begin an investigation to decide whether it should advance to a “phase 2 investigation.”

The regulator will announce that decision by Oct. 4, according to the notice.

An Amazon spokesperson said in a statement provided to PYMNTS that the company is “disappointed” that the CMA did not end its probe, adding that the company’s collaboration with Anthropic does not raise competition concerns and that Anthropic is working to become a viable alternative in a generative AI market that is currently dominated by one company.

“By investing in Anthropic, Amazon, along with other companies, is helping Anthropic expand choice and competition in this important technology,” the statement said.

Anthropic said in a statement provided to PYMNTS that Amazon does not have a seat on the company’s board and that Anthropic will cooperate with the CMA to provide it with a “comprehensive understanding” of the investment and the collaboration.

“We are an independent company,” the Anthropic statement said. “Our strategic partnerships and investor relationships do not diminish our corporate governance independence or our freedom to partner with others.”

Amazon said in March that it made a total investment of $4 billion in Anthropic, with an initial investment of $1.25 billion in September 2023 followed by an additional $2.75 billion investment in March.

The CMA asked for input from stakeholders in April about whether this investment and other Big Tech partnerships with AI companies should be classified as mergers.

Joel Bamford, executive director of mergers at CMA, said in an April press release that “fair and effective competition in Foundation Model markets is critical to making sure the full benefits of this transformation are realized by people and businesses in the U.K., as well as our wider economy where technology has a huge role to play in growth and productivity.”

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Google Vows to Appeal Antitrust Ruling as Tech Industry Speculates on Implications https://www.pymnts.com/antitrust/2024/google-vows-to-appeal-antitrust-ruling-as-tech-industry-speculates-on-implications/ https://www.pymnts.com/antitrust/2024/google-vows-to-appeal-antitrust-ruling-as-tech-industry-speculates-on-implications/#comments Tue, 06 Aug 2024 22:11:41 +0000 https://www.pymnts.com/?p=2024141 Day one of the post-Google antitrust ruling era kicked off with a reaction from the defendant in the case and a slew of “what ifs” about the implications of the decision for the connected economy. “This decision recognizes that Google offers the best search engine but concludes that we shouldn’t be allowed to make it […]

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Day one of the post-Google antitrust ruling era kicked off with a reaction from the defendant in the case and a slew of “what ifs” about the implications of the decision for the connected economy.

“This decision recognizes that Google offers the best search engine but concludes that we shouldn’t be allowed to make it easily available,” said Google global affairs President Kent Walker in a statement sent to PYMNTS.

“We appreciate the Court’s finding that Google is ‘the industry’s highest quality search engine, which has earned Google the trust of hundreds of millions of daily users,’ that Google ‘has long been the best search engine, particularly on mobile devices,’ ‘has continued to innovate in search’ and that ‘Apple and Mozilla occasionally assess Google’s search quality relative to its rivals and find Google’s to be superior.’ Given this, and that people are increasingly looking for information in more and more ways, we plan to appeal. As this process continues, we will remain focused on making products that people find helpful and easy to use.”

Walker’s comments address some of the findings issued Monday (Aug. 5) by U.S. District Judge Amit P. Mehta, who found that Google illegally maintained monopolies in the markets for general search services and general search text advertising through its exclusive distribution agreements.

After a nine-week bench trial that concluded in November 2023, Mehta ruled that Google’s distribution agreements with mobile device manufacturers, wireless carriers, and web browser developers foreclosed rivals from key distribution channels and allowed Google to unlawfully maintain its monopoly power. Mehta’s ruling did not recommend remedies for what he called Google’s monopolistic practices, and the reality is that the appeal could stretch deep into 2025 and maybe beyond.

All of which left industry pundits and legal analysts to discuss the implications of the decision on search and the extent of the partnerships that drive the connected economy. For example, Apple Magazine speculated that Apple might develop its own search engine.

“Google may need to explore new avenues to maintain its search dominance, while Apple might consider developing its own search capabilities or forging partnerships with alternative providers,” its editors wrote.

“The decision also highlights the ongoing need for regulatory vigilance in the fast-paced tech industry. As digital ecosystems become increasingly integral to daily life, ensuring fair competition and preventing monopolistic practices becomes ever more crucial. While Google is expected to appeal the decision, potentially extending the legal battle, the mere prospect of change is already stirring innovation in the search engine market. Competitors are likely gearing up to seize this opportunity, potentially leading to a more diverse and competitive digital landscape.”

One of the most complete and informed interpretations came from the American Action Forum. Jeffrey Westling, the group’s director of technology and innovations policy, argued that Google will have a strong case upon appeal.

Westling said that while the decision is a significant win for the Department of Justice, it demonstrates that current antitrust laws are sufficient to address anticompetitive behavior in online markets. He contended that the court’s opinion follows established legal principles and that Congress need not create new legislation targeting Big Tech. He suggested that the case shows how antitrust law can be applied to online marketplaces and that size alone is not illegal if companies benefit consumers and competition.

“The court’s decision is a major win for the DOJ in its antitrust case against Google,” Westling wrote. “What’s more, the opinion highlights how current law is more than capable of addressing harm in online markets. While Google will appeal the ruling — it has some strong arguments with which to do so — Congress should allow the courts to continue examining specific conduct and evaluating whether it harms competition rather than crafting unnecessary legislation to prohibit a wide range of conduct solely due to fears that firms are too large.”

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Google Ruling May Blunt Apple’s Services Revenue and Ecosystem Growth https://www.pymnts.com/antitrust/2024/google-ruling-may-blunt-apple-services-revenue-ecosystem-growth/ https://www.pymnts.com/antitrust/2024/google-ruling-may-blunt-apple-services-revenue-ecosystem-growth/#comments Tue, 06 Aug 2024 15:28:21 +0000 https://www.pymnts.com/?p=2023056 For years, tech juggernaut Apple has been building a services-focused ecosystem designed to offset bumpy, lumpy hardware sales and bring higher-margin dollars to its revenue streams. Take, for example, its search capabilities. Google is the preset default search engine on Apple’s Safari browser via a longstanding agreement. Apple has been posting double-digit growth in services […]

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For years, tech juggernaut Apple has been building a services-focused ecosystem designed to offset bumpy, lumpy hardware sales and bring higher-margin dollars to its revenue streams.

Take, for example, its search capabilities. Google is the preset default search engine on Apple’s Safari browser via a longstanding agreement.

Apple has been posting double-digit growth in services through the past several quarters, but this momentum may be blunted by a landmark U.S. District Court ruling Monday (Aug. 5) that Google has acted as a monopolist, and by extension, its search agreement with Apple is anti-competitive.

Billions of dollars and several percentage points of Apple’s operating margin (and profits) may hang in the balance.

Among the anti-competitive findings in the opinion, U.S. District Judge Amit Mehta said default search agreements (the Apple/Google tie-up is one example here) deny Google’s competitors access to search queries and user data needed to improve their products and ad platforms.

“Most users access a general search engine through a browser (like Apple’s Safari) or a search widget that comes preloaded on a mobile device,” Mehta wrote in the ruling. “Those search access points are preset with a ‘default’ search engine. The default is extremely valuable real estate.”

The value of that metaphorical real estate runs both ways. Apple and Google entered into their current Internet Services Agreement in 2016. The ruling detailed that, per the deal, Google pays Apple a share of its search ads revenue in exchange for Apple preloading Google as the “exclusive, out-of-the-box default” search engine. The agreement is in place through 2026, and there’s an option to extend the joint efforts until 2031, via mutual agreement.

The agreement also “requires both parties to cooperate to defend the agreement, including in response to regulatory actions.”

For Apple, the impact of the agreement, and the dependence on Google, is sizable.

Mehta’s ruling detailed that “between Siri, Spotlight and Safari, Apple gets about 10 billion user queries per week. Roughly 80% of those queries are entered into Safari; Siri and Spotlight thus make up a minority of queries.”

As the default engine on Safari across all Apple devices, Google is an automatic responder to search queries unless users actively select different third-party services.

Boiling Down to Dollars and Cents

“In 2022, Google’s revenue share payment to Apple was an estimated $20 billion (worldwide queries),” the ruling said. “This is nearly double the payment made in 2020, which was then equivalent to 17.5% of Apple’s operating profit.”

According to Apple’s latest earnings report, the services segment accounted for 28% of the company’s $85.8 billion in net sales in the fiscal third quarter, growing by 14% year on year. The services segment carries gross margins of about 73% versus hardware margins of about 35%. The company offers only qualitative detail on its services-related revenues during conference calls (and in its filings).

The company’s latest annual filing with the Securities and Exchange Commission (SEC) noted that for the year that ended last September, the total services segment logged $85.2 billion in sales. If Apple loses $20 billion from its deal with Google, that would equal somewhere near a quarter of its services sales ($20 billion through the service agreement on $86 billion in services revenues), with gross margins that are rather high.

PYMNTS has reached out to Apple for comment.

The exact impact of curtailing or shuttering the Internet Services Agreement may be hard to pin down because the ruling’s impact and regulatory actions have yet to be known. But the old Wall Street saying is that it’s better to be directionally right than precisely wrong. In this case, the direction seems that there may be at least some near-term headwinds to a lucrative revenue stream that has been helping Apple move beyond hardware.

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Tech Industry Braces for Fallout From Google Antitrust Verdict https://www.pymnts.com/antitrust/2024/tech-industry-braces-for-fallout-from-google-antitrust-verdict/ https://www.pymnts.com/antitrust/2024/tech-industry-braces-for-fallout-from-google-antitrust-verdict/#comments Tue, 06 Aug 2024 02:14:55 +0000 https://www.pymnts.com/?p=2022766 By now, you know that Google lost its landmark antitrust case, pending what is sure to be a dogfight of an appeal. In the balance, there are more antitrust cases in the tech sector involving Meta and Amazon, among others. With that in mind it’s important to focus on the details in the judge’s decision, […]

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By now, you know that Google lost its landmark antitrust case, pending what is sure to be a dogfight of an appeal. In the balance, there are more antitrust cases in the tech sector involving Meta and Amazon, among others.

With that in mind it’s important to focus on the details in the judge’s decision, which concludes that Google’s business practices violated antitrust laws, specifically the Sherman Act, by maintaining and abusing its monopoly power in the search and search advertising markets.

In a statement emailed to PYMNTS, Kent Walker, Google’s President, Global Affairs, said the company plans to appeal:

“This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available. We appreciate the Court’s finding that Google is “the industry’s highest quality search engine, which has earned Google the trust of hundreds of millions of daily users”, that Google “has long been the best search engine, particularly on mobile devices”, “has continued to innovate in search” and that “Apple and Mozilla occasionally assess Google’s search quality relative to its rivals and find Google’s to be superior.”  Given this, and that people are increasingly looking for information in more and more ways, we plan to appeal.  As this process continues, we will remain focused on making products that people find helpful and easy to use.”

According to several legal opinions in the immediate aftermath of the decision, consumers will not be affected any time soon. However, before the decision, several legal firms played “what if” with the anticipated decision, including this speculation from the Lanier Law Firm — which had filed one of the many suits against Google — in January.

“Casual web and smartphone users, for example, will see a wider variety of search engines available for use if Google loses in these antitrust lawsuits. Instead of being directed to Google by default, many more users will search the internet using privacy-focused search engines such as DuckDuckGo,” the firm posted.

“When booking travel, looking for hotels, or searching for activities on your next vacation, Google’s loss in these antitrust cases would place vertical search websites higher in the search results. Instead of seeing services such as Google Flights or Google Hotels above the fold, you’ll begin to see more companies like Tripadvisor, Yelp or Kayak.”

The case, formally known as United States of America et al. v. Google LLC, centered on Google’s extensive and complex business practices that, according to the plaintiffs, stifled competition and innovation. The ruling, detailed in a comprehensive 286-page opinion by U.S. District Judge Amit Mehta, outlines how Google’s practices created barriers to entry for competitors, thereby maintaining what he called its monopolistic status.

The decision marks a turning point in a nearly four-year legal battle between Google and U.S. antitrust enforcers. The Department of Justice, joined by 11 states, filed the original lawsuit in October 2020, alleging that Google used anticompetitive tactics to preserve its dominance in search and search advertising. A separate lawsuit filed by a coalition of state attorneys general was later consolidated with the federal case.

After a nine-week bench trial that concluded in November 2023, Mehta ruled that Google’s distribution agreements with mobile device manufacturers, wireless carriers and web browser developers foreclosed rivals from key distribution channels and allowed Google to unlawfully maintain its monopoly power.

The court defined two relevant antitrust markets in which Google was found to have monopoly power:

1. General search services: Mehta rejected Google’s argument for a broader “query responses” market that would have included specialized vertical providers like Amazon. Instead, he concluded that general search engines like Google and Bing constitute a distinct product market.

2. General search text advertising: The court found that text ads on general search engines are a separate market from other forms of online advertising, including product listing ads and display ads.

In both markets, the court determined that Google possesses monopoly power based on its dominant market share and the existence of significant barriers to entry. The ruling notes that Google has held over 80% share of general search queries since 2009, reaching nearly 90% by 2020. In general search text advertising, Google’s market share was found to be 88%.

At the core of the case were Google’s revenue-sharing agreements that make Google the preset default search engine on Apple’s Safari browser, Mozilla’s Firefox browser and on Android mobile devices. Mehta concluded these agreements are exclusive deals that hinder rivals from critical distribution channels.

The court found the agreements produce three main anticompetitive effects:

1. Market foreclosure: The agreements were found to foreclose about 50% of general search queries and 45% of the general search text ad market from competitors.

2. Depriving rivals of scale: By locking up default search placements, the agreements deny Google’s competitors access to search queries and user data needed to improve their products and ad platforms.

3. Reduced incentives to invest and innovate: The ruling states that Google’s exclusive grip on key distribution channels has diminished incentives for both Google and its rivals to invest in search and search advertising capabilities.

Mehta rejected Google’s arguments that the agreements produce offsetting procompetitive benefits. He found that Google failed to show that deals enhance user experience, incentivize competition, or produce other benefits that justify their exclusionary effects.

Notably, the court dismissed Google’s contention that it faces robust competition for queries from specialized vertical providers and social media platforms. Mehta determined these are largely complementary services rather than substitutes for general search.

A key finding in the ruling is that Google’s monopoly power has enabled it to charge supracompetitive prices for search text ads without facing meaningful competitive constraints. The court cited evidence that Google has used various “pricing knobs” to steadily increase text ad prices over time, often seeing about 50% of price hikes stick long-term.

Mehta found Google makes these pricing decisions without regard for competitors’ pricing. He stated this ability to profitably raise prices substantially above competitive levels is clear evidence of monopoly power.

Remedies to Be Determined

While finding Google liable for monopolization, the ruling does not specify remedies at this stage. Mehta indicated the court will address relief in subsequent proceedings.

The Department of Justice had previously suggested potential remedies could include barring Google from entering into exclusionary agreements, unwinding existing deals, and potentially requiring divestitures. However, the exact scope of relief remains to be determined.

A few other notable elements of Mehta’s decision:

• The court rejected a proposed market for “general search advertising” that would have included both text ads and product listing ads. It found insufficient evidence to support this as a relevant antitrust market.

• Mehta dismissed claims related to Google’s search advertising tool SA360, finding Google had no duty to provide feature parity between its own ad platform and Microsoft’s.

• The ruling declined to impose sanctions on Google for failing to preserve certain employee chat messages, though it criticized the company’s practices around document retention.

• While focused on competitive effects rather than intent, the judge expressed concern over “the lengths to which Google goes to avoid creating a paper trail for regulators and litigants.”

Google is expected to appeal the decision, potentially setting up years of additional litigation. The company has maintained that its success stems from building a superior product rather than anticompetitive conduct.

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Report: Nvidia Faces US Antitrust Probe, Says It ‘Wins on Merit’ https://www.pymnts.com/antitrust/2024/nvidia-faces-united-states-antitrust-probe-says-it-wins-on-merit/ Fri, 02 Aug 2024 16:22:26 +0000 https://www.pymnts.com/?p=2021191 Nvidia is reportedly the focus of a Justice Department antitrust investigation looking into whether the firm has abused its dominant position in the market for artificial intelligence chips. The Justice Department is investigating complaints that Nvidia charges higher prices if customers also buy chips from its rivals and that the company pressures buyers of its […]

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Nvidia is reportedly the focus of a Justice Department antitrust investigation looking into whether the firm has abused its dominant position in the market for artificial intelligence chips.

The Justice Department is investigating complaints that Nvidia charges higher prices if customers also buy chips from its rivals and that the company pressures buyers of its chips to also buy other products like cables, CNBC reported Friday (Aug. 2), citing a paywalled article by The Information.

A spokesperson for Nvidia said the company “wins on merit” and is happy to provide information to regulators, according to the report.

“We compete based on decades of investment and innovation, scrupulously adhering to all laws, making Nvidia openly available in every cloud and on-prem for every enterprise, and ensuring that customers can choose whatever solution is best for them,” the spokesperson said, per the report.

Sen. Elizabeth Warren Massachusetts is among those who have called on the Justice Department to investigate Nvidia, citing competition concerns, Reuters reported Friday.

In addition, French antitrust enforcers are preparing to bring charges against Nvidia, targeting the company’s bundling of its products, according to the report.

It was reported in July that the surge in demand for Nvidia’s chips used in AI and computer graphics has prompted regulatory scrutiny.

In a regulatory filing last year, the company said that regulators from the European Union, the United States and China had requested information regarding its graphics cards.

In a 10-Q filing, Nvidia said: “Our position in markets relating to AI has led to increased interest in our business from regulators worldwide, including the European Union, the United States and China.”

It was reported in June that Nvidia has a market share of greater than 80% in AI chips.

Nvidia CEO Jensen Huang said during a company shareholder meeting in June that Nvidia has taken several steps to maintain its dominant position in the market, including transforming from a gaming-focused company to a data center-focused one; partnering with computer makers and cloud providers to create new markets for its AI; and offering chips whose performance and operating costs make them a better value than others that may be cheaper to buy.

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Google-Anthropic Partnership Catches Eye of UK Watchdog https://www.pymnts.com/antitrust/2024/google-anthropic-partnership-catches-eye-of-uk-watchdog/ Tue, 30 Jul 2024 15:08:06 +0000 https://www.pymnts.com/?p=2019090 Great Britain’s competition regulator is examining Google’s partnership with artificial intelligence (AI) startup Anthropic. The Competition and Markets Authority (CMA) said Tuesday (July 30) it is “considering whether it is or may be the case that this partnership has resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002.” If so, the CMA said […]

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Great Britain’s competition regulator is examining Google’s partnership with artificial intelligence (AI) startup Anthropic.

The Competition and Markets Authority (CMA) said Tuesday (July 30) it is “considering whether it is or may be the case that this partnership has resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002.”

If so, the CMA said in its announcement, the regulator will look into “whether the creation of that relevant merger situation has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

The CMA is giving interested parties until Aug. 13 to comment on the situation.

Google last year invested $500 million into Anthropic, with the promise of significantly greater investments still to come. Similar AI-focused partnerships, such as the one between Microsoft and OpenAI, have also drawn scrutiny from regulators.

And last week, antitrust bodies from the U.S., U.K. and the European Union (EU) issued a rare joint statement outlining their concerns about market concentration and anti-competitive practices in the field of generative AI — the technology governing popular chatbots such as OpenAI’s ChatGPT.

“There are risks that firms may attempt to restrict key inputs for the development of AI technologies,” the watchdogs warned, stressing the need for action in a rapidly evolving field.

The regulators pointed to three key risks: control of critical resources, market power entrenchment and harmful partnerships, saying they were especially worried about how existing digital market leaders might leverage their positions.

The statement argued that “the AI ecosystem will be better off the more that firms engage in fair dealing,” underlying principles of interoperability and choice.

“While the authorities can’t create unified regulations, their alignment suggests a coordinated approach to oversight,” PYMNTS wrote. “In the coming months, this could mean a closer examination of AI-related mergers, partnerships and business practices.”

Meanwhile, PYMNTS wrote Tuesday about the burgeoning field of AI ethics, which asks a critical question: How do we make sure intelligent machines serve humanity’s best interests? This field grapples with the moral implications of an increasingly automated world, from job displacement to existential risks.

“AI ethics encompasses a wide range of concerns, including privacy, bias, transparency, accountability, and the long-term societal impacts of artificial intelligence,” that report said. “As AI systems become more sophisticated and autonomous, the ethical questions surrounding their development and deployment grow increasingly complex and urgent.”

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Report: Meta Facing EU Fine for Linking Facebook and Marketplace https://www.pymnts.com/antitrust/2024/report-meta-facing-eu-fine-for-linking-facebook-and-marketplace/ Thu, 25 Jul 2024 18:55:38 +0000 https://www.pymnts.com/?p=2016845 Meta Platforms is reportedly facing its first antitrust fine in the European Union (EU). That fine could be handed down in a few weeks in response to the company connecting its  classified ad service Marketplace with the Facebook social network, Reuters reported Thursday (July 25), citing sources with direct knowledge of the matter. The fine would come from the European Commission (EC), […]

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Meta Platforms is reportedly facing its first antitrust fine in the European Union (EU).

That fine could be handed down in a few weeks in response to the company connecting its  classified ad service Marketplace with the Facebook social network, Reuters reported Thursday (July 25), citing sources with direct knowledge of the matter.

The fine would come from the European Commission (EC), which in late 2022 accused Meta of giving Marketplace an unfair edge by tying it to Facebook. The EC also said Meta took advantage of its dominance by imposing unfair trading conditions on competing online classified ads services that advertise on Facebook or Instagram.

Last year, Meta said it would challenge the EU’s antitrust allegations, calling them baseless and affirming its commitment to working with regulatory bodies.

Reuters notes that Meta could face a fine of up to $13.4 billion — or 10% of its 2023 global revenue — though EU sanctions are typically much lower than that cap. Sources told the news outlet that the EC will likely issue its decision in September or October before EU competition chief Margrethe Vestager leaves office in November.

Meanwhile, Meta this week raised concerns about the EU’s approach to regulating artificial intelligence (AI). Rob Sherman, the company’s deputy privacy officer and vice president of policy, warned in a Financial Times interview that regulatory efforts could potentially isolate Europe from access to cutting-edge AI services.

Sherman confirmed that Meta had gotten a request from the EU’s privacy watchdog to halt AI model training using European data voluntarily. The company is complying with this request, but is concerned about the growing “gap in technologies available in Europe versus the rest of the world,” he said.

“This situation highlights the delicate balance between fostering innovation and ensuring responsible AI development. As tech companies race to commercialize AI products, they face constraints from the EU’s digital rules, including data protection regulations like GDPR,” PYMNTS wrote earlier this week, noting that Meta had already held off debuting its AI assistant in Europe due to regulatory concerns.

“As the AI landscape evolves, the tech industry and EU regulators must find common ground to ensure Europe remains competitive in the global AI market while safeguarding user privacy and safety,” that report said.

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