The US government’s explosive lawsuit against Google is an antitrust suit that questions whether Google has been using its power in the search engine market to monopolise the industry. As the market stands, Google controls at least 90% of the market share for search engines in the US and is worth a respectable $1.7 trillion. It’s the first of its kind in a few decades, the last being the government’s suit against Microsoft in the 1990s. It’s certainly the first in the internet’s new age. The US Department of Justice argues that Google has orchestrated its business dealings – primarily when it comes to default settings in smartphones – to ensure that no other competitor gets quite the same chances they do. The case was first filed in October 2020 and finally saw trial on 12 September this year, almost a full three years later.
Google, for its part, states that its outperformance of everyone in terms of market share is simply due to its outstanding product features. The basis of the argument is that people gravitate towards Google because they prefer a superior product, not because they are forced to. The fact that Google is the default search engine application also does not mean that consumers are not allowed to switch over to a different one. It is important to bear in mind that the last such antitrust lawsuit against Microsoft was ruled in favour of the Department of Justice. The trial bears a haunting familiarity to this one: that particular trial claimed that Microsoft grouped their products in a manner that suffocated the use of other products and compelled consumers to stick to their brand family. The trial will be on everyone’s mind, including the judge’s, as Google’s trial proceeds: the trial is not expected to reach a verdict until next year.
Google too is building a sense of exclusivity around its brand, albeit not quite in the same way that Microsoft did. In Google’s case, the company is involved in a number of deals for exclusive agreements with a number of smartphone manufacturers and operating systems developers in order to ensure that theirs is the default search engine on their products. The Department argues that this amounts to deliberate actions that seek to monopolise the market by imposing heavy barriers to entry for smaller market players. CEOs of several big tech companies have been called to a trial that is closed to the public, but have nevertheless made their ideas clear in various other communications. The CEO of DuckDuckGo, a search engine option that most consumers may never even have heard of due to Google’s suffocating influence made her stance clear in an email.
“Google has used its monopoly power to block meaningful competition in the search market by putting a stranglehold on major distribution points for more than a decade; so even though DuckDuckGo provides something extremely valuable that people want and Google won’t provide — real privacy — Google makes it unduly difficult to use DuckDuckGo by default.”
The verdict of the case ultimately rests on two main points: whether the market share achieved by Google is the result of monopolisation and whether Google has abused its position as the market leader to interfere with the competitive process. Establishing these points, however, may not be as quite so straightforward as it seems. Despite its hold of 90% of the US market share, Google only has to argue that this holding is still subject to market forces and may be lost to them at any point to win their case on the first point. For Google to lose, the Department of Justice has to convince the courts that Google is in fact above market forces, and cannot be displaced from their position through market competition.
On the other hand, that Google has used its position to leverage the market against its rivals is a relatively easier argument to make, considering its actions in securing the loyalty of device manufacturers and product developers. On this point, Google is likely to argue that product defaults are inserted to make for a more seamless user experience for the consumer. Arguably, the setting of a default application does not amount to a violation of antitrust and market competition laws. A payment to obtain this default option also does not amount to an anti-competitive act, given that many other products on the consumer market, from retail goods to other software products pay to have their products more prominently placed on market platforms. Besides – consumers are always allowed to opt out of the default setting and select the search engine of their choice on app stores.
The first of these two points presents a very difficult case to oppose and the second necessitates proving that the default contracts are too restrictive for free market competition and that choosing a different option to the system’s defaults is a sufficient barrier to entry to warrant the monopoly allegation. This will in turn have to hinge on the fact that default settings effectively limit consumer choice as the decision on system settings are considered at the point of purchase, and rarely if ever, later. In such a situation, Google’s default contracts effectively ensure that rival search engines are never even allowed to be considered as a serious option for consumers. Google has many such contracts with many other brands such as Apple, Android, Verizon, and the like, almost all of whom are direct competitors to each other in some shape or form.
Google’s contract with Apple alone is expected to garner a lot of attention in the courts due to its extremely dubious nature. Apple has a contract with Alphabet, Google’s parent company, to ensure that their products offer Google as their default search engine. While this in itself is not a new phenomenon, what is interesting is that Google has agreed to pay Apple in proportion to the searches Google gets from Apple products. The contract therefore provides Apple with a direct incentive to push Google, and not others, as the search engine of choice in their family of products. The money involved is exorbitant – it’s estimated that for 2022 year alone, Google paid $10 billion, just for its contract for the iPhone.
Another element to emerge as a result of the trial is the ‘veil of secrecy’ that Google is attempting over the case by closing almost all aspects of the lawsuit to the public. This secrecy has caused significant and righteous outrage among transparency experts and industry experts. Katherine Van Dyck, senior legal counsel at the American Economic Liberties Project, which is a not-for-profit that advocates for corporate accountability, was vocal in her concerns to the media.
“People are right to be concerned about the lack of transparency in this trial. We aren’t seeing the most basic evidence in this case and it’s a serious problem”.
Ensuring that the public is made aware of the information and the revelations occasioned solely due to this trial has, therefore, become the task of the news reporters, activists, and observers physically present in the courtroom, for the sake of public benefit.
(Theruni Liyanage)