In a consequential case, the federal government sued Google and won. This victory, if not overturned on appeal, may lead to the Big tech giant being broken up by antitrust crusaders. The question to be determined is whether this will be a good decision for consumers.
The Justice Department and state attorney’s general sued Google on antitrust grounds, arguing that it was dominating the search engine market through anticompetitive practices.
The federal government took issue with agreements that the company entered into with various companies such as Apple, Mozilla, and wireless companies to feature its search engine as the default search engine.
According to industry experts, these agreements do not prevent consumers from accessing other search engines (i.e., limiting competition), but are comparable to food companies paying to have their products higher up on store shelves at the grocery store.
Google blasted the case as “backward-looking” at “a time of unprecedented innovation.” They wrote:
This lawsuit simply ignores how intensely competitive and dynamic the technology industry is today. Just look at the rapid AI advances across the industry (including Microsoft’s investment in AI in search, Amazon and Apple’s growing success in digital ads, or the ever-growing number of apps people use to find information like ChatGPT, TikTok and Wikipedia). Meanwhile, we’re not standing still: We invest billions of dollars in R&D and make thousands of quality improvements to Search every year to ensure we’re delivering the most helpful results. This competition benefits consumers by giving them better, more innovative services.
The court agreed with Google’s innovation and value to society but still ruled against it in a stunning blow. In the court’s opinion, US District Judge Amit Mehta wrote
After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly.
…
[Google] enjoys an 89.2% share of the market for general search services, which increases to 94.9% on mobile devices.
The decision did take into account the dynamic nature of the search market as well as how consumers search for information today. Google is not the only search engine on the market. Users can easily DuckDuckGo, Bing, and Yahoo! And even set them as defaults on their computers and devices.
Google is the leader among search websites, but interestingly, it is not the number one method consumers use to find out information. Social media is overwhelmingly the first place that users go to for sources of information. Eight of ten (82%) individuals surveyed prefer to use social media for searches rather than traditional search engines, according to one survey in 2021.
Attorney General Merrick Garland on behalf of the Biden Administration called the court’s decision “an historic win for the American people,” adding that “No company — no matter how large or influential — is above the law.” Google defended its business and promised to appeal.
What the Decision Means
This landmark decision not only has implications for Google but for other Big Tech companies with pending cases or that could be targets of antitrust cases in the future. The court is sending the message that innovation and consumer benefit are not enough to protect big companies from the antitrust hammer.
It’s hard to understand how the court ruled against a successful company that delivers an astounding amount of value to consumers and spurs market competition. In the lengthy 277-page decision, the court acknowledged that Google was innovative and heavily invested in its business in ways that propelled it above and beyond its competitors. Ironically, as Google’s Global Affairs president noted on X.com:
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.’
As a result, the user experience has improved, as has the quality of search results. Consumers benefit from better products and services, often at no cost.
Granted, many conservatives are frustrated with how search results may seem to be manipulated for political reasons. Remember this summer when the company had to explain and fix its auto-complete function, which didn’t populate President Donald Trump’s name? Others are also rightly concerned about artificial intelligence tools being programmed with disturbing biases such as Google Gemini depicting our Founding Fathers as racial minorities.
On balance, consumers and society are immensely more advanced and better off. If there is a silver lining to this case, one could argue it’s that the federal government has proven new antitrust legislation is not needed to police so-called big, bad actors. Regulatory enforcement still works. This is the point Will Rinehart of the American Enterprise Institute made in The Dispatch, writing:
Regardless of the name, advocates and policymakers alike have been pressing for stricter antitrust laws. But this decision undermines at least one of the central arguments for change in the law: that existing antitrust enforcement can’t be successful against big tech companies.
Although not everyone is quite so optimistic. Industry association NetChoice argued that this decision emboldens federal agencies:
The DOJ’s approach could further increase government overreach into the private sector by using judicial remedies to dictate how companies operate, effectively legislating from the bench. This troubling precedent bypasses the democratic process, as courts, not policymakers, would determine regulatory decisions—not the legislature. Regulatory policy should be crafted by elected representatives to avoid undermining innovation, the tech industry, and America’s global competitiveness.
What’s Next
The next step is for the federal government to present options to the court on how to remedy the Court’s issue with Google’s business.
As the Wall Street Journal explained, this decision could upend and reshape the search and mobile industries. At the extreme, some antitrust activists advocate that the government force Google to sell its Chrome browser or Android mobile software businesses. This would end Google’s ability to integrate its search engine into devices and browsers. Others argue that the court is likely to end Google’s practice of paying to be the default search engine on devices and browsers for companies.
Bottom Line
Google’s search court loss is a monumental decision that is certain to shake up the industry and impact how Americans search for information. We worry that the outcome could be for the worse of the consumers, which is the opposite of what antitrust enforcement is meant to do.