The long-awaited Sept. 2 federal ruling on Google’s internet search monopoly came as a huge surprise to insiders and analysts, given its profound implications.
While a former Google insider called the ruling a “significant victory” for the company, he also highlighted another Department of Justice (DOJ) monopoly case—with a remedies trial scheduled later this month—that he is less optimistic about. Some analysts noted that the ruling could have a positive impact on high-tech merger and acquisition activity.
The Justice Department initially filed suit against Google in 2020, marking the largest U.S. tech antitrust case since its battle against Microsoft during the 1990s. The lawsuit alleged that Google used anticompetitive tactics to maintain its dominance, securing contracts that made it the default search engine on web browsers and smartphones.
“You would think that the remedy would make some effort to eliminate the monopoly or reduce it, or try to help competitors compete better,” he told The Epoch Times.
“But that’s a really kind of tenuous solution to the problem. You know, the more direct problem is that Google is automatically installed on everyone’s phone, every browser, every desktop, etc., etc., and the judge decides not to do anything about that.”
Paparo, an advertising executive who left Google in 2010 and whose new book, “Yield: How Google Bought, Built, and Bullied Its Way to Advertising Dominance,” was released nationwide in August, further stated that the Silicon Valley technology giant has dominated the search-engine market since the introduction of Google Search in 1997. At the same time, the majority of Google’s revenues are generated through advertising, which has pushed its parent company, Alphabet Inc., to a market capitalization exceeding $2 trillion.
The company expressed concern over how the court’s mandate to share data with competitors could affect its users. At the same time, it noted that “the court did recognize that divesting Chrome and Android would have gone beyond the case’s focus on search distribution, and would have harmed consumers and our partners.”
Highlighting a broader market perspective, two top Wall Street investment experts applauded the ruling, saying it foreshadows a less stringent regulatory environment for merger and acquisitions activity in the tech sector under the Trump administration.
Erik Clark, portfolio manager for the benchmark Rational Dynamic Brand Fund, called the ruling “a collective sigh of relief for the broader, mega-cap tech industry,” which should make company executives feel better about their chances of having mergers and acquisitions (M&A) approved.
“We already expect the M&A environment to heat up into 2026, and today confirms this potential opportunity,” said Clark, whose fund holdings include leading companies and hedge funds such as Amazon, Apple, Walmart, Netflix, Blackstone, KKR, Apollo Global, and Meta.
Chris Marangi, co-chief investment officer of value at Gabelli Funds, agreed. He said the Google ruling not only brings relief for a more favorable regulatory environment, but will also foster bullish earnings and bigger mergers and acquisitions (M&A) deals.
He highlighted three multibillion-dollar deals in particular that he’s watching, including Union Pacific and Norfolk Southern, Nexstar and Tegna, and AT&T buying a significant chunk of wireless spectrum from EchoStar.
“We'll see if they get approved. But the fact that they’re announced means that investment bankers are dreaming big.”
Meanwhile, Paparo said that although the Mehta ruling was a significant victory for Google and Alphabet, the West Coast technology conglomerate could fare far worse in another DOJ monopoly case currently before U.S. District Judge Leonie Brinkema in the Eastern District of Virginia.
In April, the Department of Justice prevailed against Google when Judge Brinkema ruled in United States et al. v. Google that the company had violated antitrust law by monopolizing the open-web digital advertising market. According to Brinkema’s ruling, the company “harmed Google’s publishing customers, the competitive process, and, ultimately, consumers of information on the open web.”
“This Department of Justice will continue taking bold legal action to protect the American people from encroachments on free speech and free markets by tech companies.”
On Sept. 22, Brinkema will hold a remedies trial to consider spinning off Google’s ad tech division due to Google’s anticompetitive conduct that hamstrung or eliminated other advertising competitors.
Paparo said his new book delves into the “ad tech” case, noting that Google has garnered a monopoly across digital advertising markets by pressuring publishers and advertisers to use its products, while thwarting the ability to use competing products.
The former advertising executive said not only does Google control the digital tool that nearly every major website publisher uses to sell ads on their websites but it also operates the advertiser tool that helps millions of large and small advertisers buy ad inventory. In addition, he said, Google also controls the largest advertising exchange that runs real-time auctions to match buyers and sellers of online advertising.
“So, what the DOJ is asking for is that the exchange gets spun out first of all, and then secondly, that the publisher ad server effectively has to give up its algorithms to competitors, and then maybe get spun out in the future,” Paparo told the Epoch Times.
“And so I think some combination of those things is very possible that it will happen.”
