In the current court fight between Google and the U.S. Justice Department regarding whether the company broke antitrust laws, there’s a lot on the line. U.S. District Judge Amit Mehta will decide the 10-week trial’s result, which might completely alter how folks surf the web and cut down on the earnings of the company that holds the top search engine for internet users.
This civil antitrust lawsuit is the first one in a string of cases aimed at other tech giants such as Meta and Amazon. However, this specific lawsuit, filed by the Justice Department and eleven states, claims that Google unlawfully dominates search engine services—spending billions in the process—making it the go-to company for advertising companies and website publishers to buy and sell ads.
Google’s alleged monopoly and competition suppression
According to Eleanor Fox, a professor at New York University School of Law, the key issue is whether Google is solidifying its monopoly and shutting down opportunities for competitors to create a competing search engine.
“The question is whether [Google] is entrenching its monopoly and closing off avenues for competitors to try to develop a competitive search engine,” Fox said.
The Justice Department claims that Google’s agreements with multiple mobile phone companies ensure it’s the default search engine on devices, creating obstacles for rivals like Duck Duck Go and Microsoft’s Bing to gain traction in the sector.
However, Google’s stance is that they aren’t a monopoly. They argue that users opt for Google because it offers the best performance. Additionally, the company maintains that even though they pay to be the default search engine, that doesn’t automatically ensure their position as the top contender.
Eleanor Fox mentioned that while it’s possible for users to download other search engines, the issue lies in the fact that statistics indicate users seldom switch once a company becomes the default option.
“It’s true that other users can certainly download other search engines. But what is problematic is that the statistics show that when a company gets to be a default, users very rarely change,” Fox added.
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Department of Justice’s antitrust allegations against Google
Back in January, the Department of Justice took legal action against Google, alleging that the company had violated the Sherman Act, an antitrust law designed to prohibit monopolistic behaviors. The law aims to prevent any one company from dominating a specific market. In the United States versus Google case, the Justice Department contends that Google has unfairly seized control of the “ad tech stack,” a tool used by advertisers and publishers for trading ads.
The case filing indicates that Google has spent billions to secure its position as the default search engine for laptops, computers, and cellphones through deals with cellular device manufacturers and browser developers. For example, Google’s deal with Apple is estimated to cost the tech giant between $15 to $20 billion every year. This funding also guarantees that these companies won’t collaborate with Google’s rivals.
According to the court documents, this contract has enabled Google to cover nearly 95% of all search queries on mobile devices. With a valuation of approximately $1.7 trillion, Google dominates around 90% of the American search engine market. The Justice Department asserts that such practices hinder other search engine companies from having a fair opportunity to compete in the industry.
“Google is so dominant that ‘Google’ is not only a noun to identify the company and the Google search engine but also a verb that means to search the internet,” the filing complaint says.
Profit boosts and revenue gains from Google’s contracts
According to Fox, Google claims that it hasn’t monopolized the ad industry. They argue that they are merely reaping the rewards of a deal. The company’s legal team asserts that customers just prefer their search engine over other options.
Google’s argument is that, due to the vast amount of data it has from its current users, it can offer an improved experience for everyone. “It’s arguing that the default [search engine] position is pro competitive and pro efficiency and pro innovation pro giving a better product to consumers,” she explains.
Thanks to the contract, Google has raked in hundreds of billions in revenue and has also boosted the profits of cell phone manufacturers involved in these agreements.
The trial is halfway through, but it’s uncertain how Mehta will decide. Fox mentions that the Department of Justice has a solid case. The previous significant case against big tech was the 1998 lawsuit between the Department of Justice and Microsoft for bundling Internet Explorer with its Windows operating system.
The Justice Department claimed that the company was unlawfully dominating its position in the computer industry and concluded that Microsoft had breached antitrust laws.
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Potential impact of a ruling against Google
However, if Mehta does rule against Google, Fox suggests that he might determine that the contracts Google has made to secure its spot as the default search engine on mobile devices and computers are unlawful. This could mean that cellphone users would have the freedom to choose their own default search engine or that manufacturers could opt to collaborate with other competitors.
NBC News quoted David Olson, a professor at Boston College Law School, saying that the solution could lead to a rise in device prices to compensate for the loss of contracts with Google. He further noted that Google might still hold an edge over competitors if users continue to opt for its services.
However, even with the strong points in the Justice Department’s case, Fox highlights that past legal battles involving big tech have typically sided with companies such as Google.
According to Fox, the Supreme Court has addressed several antitrust cases in the past twenty years, showing its confidence in the market and understanding of the responsibility of monopoly companies to consumers. This has made it challenging for plaintiffs to secure victories, which is why this case is complex.
“The Supreme Court has ruled on a number of antitrust cases in the last two decades and has indicated that it has a lot of trust in the market and sympathy with monopoly firms to act responsibly to consumers. This has made it very hard for plaintiffs to win and that’s why this is a complicated case,” Fox said.
