In the biggest federal monopoly trial in years, the Department of Justice’s (DOJ) case against Google is wrapping up after 10 weeks in court. For the past 3 years, the DOJ had been investigating and developing an antitrust case against Google. In October 2020, they sued Google for violating sections 1 and 2 of the Sherman Act; Section 1 focuses on prohibiting agreements that “unreasonably” restrain trade, while Section 2 prohibits the existence of monopolies, which are a single firm that control the supply in a market [1]. Beginning on September 21, 2023, Judge Amit P. Mehta of the US District Court for the Eastern District of Virginia has heard opposing arguments on whether or not Google has dominated the search engine market illegally. Throughout the trial, high profile witnesses have testified, including Microsoft’s CEO Satya Nadella, Apple’s Senior Executive of Machine Learning and AI John Giannandrea, and the CEO of Google’s parent company, Alphabet, Sundar Pichai [2].
The DOJ focused its argument on Google’s dominance in the search engine market due to paying Apple and other web companies for their spot as the default search engine, citing that 90% of search engines in the US and 91% globally are Google [1]. It’s reported that Google paid $26.3 billion in 2021 to be the default engine, with $18 billion going to Apple alone [4]. In order to maintain their dominance, the DOJ claims that Google acquires smaller companies to get rid of tech competitors and thatits deals to be the default create high barriers of entry for smaller companies [3]. Building off of this assertion, the DOJ states that Google is using their dominance to their advantage, creating less of an incentive to provide worse services, and abusing their ability to acquire ad revenue. By forcing publishers and advertisers to use its products, the DOJ claims that Google can control the price of digital tools used for advertisements and raise prices for advertisers in order to get more revenue [3].
Google’s defense argues that their actions were important business decisions in order to promote better quality and competition within the market. Referencing the overall benefit to itself, Apple and other tech companies, and all shareholders, Google claims its costly deals to be the default are important business decisions. Even as the default, they point out how users can easily change to something else if they didn’t like the default, but users don’t because they like the quality of Google. Pointing out the $40 billion spent on research and 8,000 engineers employed, Google argues how competitors simply aren’t investing in the same way to develop a better alternative. They attribute their continued dominance because they are better than other search engines, including Microsoft’s Bing and Yahoo. They even cite how Mozilla switched from Google to Yahoo’s search engine as their default to Firefox in 2014 very briefly before switching back to Google because of the decreased user experience. Furthermore, Google emphasizes its growing competition with Amazon, TikTok, ChatGPT, and other search markets to look for information [4]. This reveals another major question of what the relevant market is. The DOJ believes the market primarily consists of Google and Bing, while Google argues it’s everything that could potentially threaten its ability as a search engine. Pointing out Amazon’s 22% growth in ad revenue recently and OpenAI’s ChatGPT presenting new challenges, Google reasserts how it’s not a monopoly [2]
If Google is found to be violating the Sherman Act, the impacts will reach all across the tech world. The last time a case similar to this made its way to federal court was the 1998 antitrust case against Microsoft. Having violated antitrust laws, Microsoft was forced to end contracts with PC makers that blocked rival software makers. This allowed new start ups to enter the market, like Google itself. Additionally, the 1984 AT&T breakup is another example of the government breaking apart monopolies in the tech industry to make the market more competitive [1]. However, breaking up Google is highly unlikely because of the serious negative impacts it’ll have on the market. Instead, Judge Mehta may follow European regulations and require manufacturers to ask consumers what search engines they would like, or stop Google from making distribution agreements that would help establish their dominance [2]. This is the first of four federal major cases with the intent to curb the power of major tech giants. Other cases include one against Meta, one against Amazon, and another against Google [5]. As each one unfolds, they have the power to reshape the Internet world that we know.
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[2]https://www.theverge.com/23869483/us-v-google-search-antitrust-case-updates
[4] https://www.nytimes.com/2023/11/14/technology/google-antitrust-trial-defense.html
[5]https://www.reuters.com/legal/us-wraps-up-antitrust-case-against-google-historic-trial-2023-11-16/
[6] https://www.brookings.edu/articles/a-primer-on-some-key-issues-in-u-s-v-google/