In October 2020, the United States Department of Justice (DOJ) and 11 states filed a landmark lawsuit against Google, arguing that it used revenue to unfairly maintain a dominant position in search and search advertising, and block out competitors. According the DOJ, the U.S. government is finally stepping in to protect access to a free market for customers and Google’s competitors.
Is Google Guilty?
The Department of Justice’s case argues that Google’s anti-competitive practices are harming three groups:
- American consumers who are forced to accept often-controversial privacy practices from Google
- Advertisers who have to pay a fee to Google to reach their customers
- Competing tech companies who can’t succeed amongst Google’s overbearing search shadow
It’s not a secret that Google strives to be the top search engine in the world. Like most companies, one of the top goals is to beat out competitors in your industry. Google search comes preloaded on devices using their Android operating system; and Google pays billions of dollars to competitors Apple, LG, and AT&T every year to be the default browser on their devices.
The Sherman Antitrust Act (1890) outlaws companies from every contract, combination or conspiracy to monopolize.
The DOJ also claims that Google uses exclusive business contracts to limit rival companies’ ability to put their products on Google’s Android devices, which the DOJ argues to violate the Sherman Antitrust Act.
Google’s Response to the Lawsuit
Legal representatives of Google have rebutted the basis the lawsuit and have argued that consumers can easily use other products. Google and other major tech companies have been targeted by the the US government in recent years; President Trump even signed an executive order to bring social media companies to heel.
“Like countless other businesses, we pay to promote our services, just like a cereal brand might pay a supermarket to stock its products at the end of a row or on a shelf at eye level,” stated Google in response to the DOJ complaint.
How This Might Affect Search
If the DOJ’s lawsuit gets traction and Google has to change it’s business strategy, the result could create a different search experience for consumers. If Google has to change its advertising strategies, it might mean an increase in advertising fees for companies.
If a judge rules against Google and they have to split up their company and/or change how the system is operated, it could mean big opportunities to search rivals like Microsoft (Bing), Yahoo, DuckDuckGo, and Ecosia. Instead of default searches going to Google on your mobile devices, consumers could see different search options.
This is the first time the DOJ has pushed a lawsuit against a large tech company. In a 1998 DOJ lawsuit against Microsoft, a judge ruled that Microsoft violated parts of the Sherman Antitrust Act and the corporation had to divide the company in half and create two separate entities: one for the operating system and the other for the software.
Sources
https://www.vox.com/recode/21524710/google-antitrust-lawsuit-doj-search-trump-bill-barr
https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/antitrust-laws
