Google Loses DOJ Antirust Suit Over Search Engine on Phones

Google’s payments to make its search engine the default option on smartphone web browsers violate U.S. antitrust law, a federal judge ruled Monday, handing a key victory to the Justice Department.

Judge Amit Mehta in Washington said that the Alphabet Inc. unit’s $26 billion in payments effectively blocked any other competitor from succeeding in the market.

“Google’s distribution agreements foreclose a substantial portion of the general search services market and impair rivals’ opportunities to compete,” Mehta said in a 286-page ruling.

Alphabet shares slipped 4.6% to $160.71. Apple Inc., which depending on the remedy could stand to lose billions in payments Google makes to have its search engine be the default browser on iPhones, fell 6.7% to $204.77.

The Justice Department didn’t immediately have a comment. Google didn’t respond to a request for comment.

Antitrust enforcers alleged that Google has illegally maintained a monopoly over online search and related advertising. The government said that Google has paid Apple, Samsung Electronics Co. and others billions over decades for prime placement on smartphones and web browsers. This default position has allowed Google to build up the most-used search engine in the world, and fueled more than $300 billion in annual revenue largely generated by search ads.

The case is the first antitrust trial pitting the federal government against a US technology company in more than two decades.