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The case challenging Google's online search dominance 

Google commands 90% market share globally of the search engine market, which means nine out of every ten searches around the world take place in Google’s search bar. 

The next two competitors, Bing and Yahoo!, are not even close (each has about 3% market share). Google dominates search (which is why you never hear people say “Bing it” or “Yahoo! it”).

But in a current court battle, the US Justice Department is alleging that Google’s ubiquity and dominance haven’t occurred accidentally. Instead, the Justice Department is contending that Google abused its power as a monopoly to dominate the search engine business and squash competition.

This week we are doing all the searching and sourcing, so you won’t have to Google anything. We’re breaking down the biggest tech antitrust case in decades and, most importantly, what it means for the future of the internet.

// Google stands trial

Earlier this month, the trial between the US Justice Department and Google, which has been three years in the making, finally kicked off in US District Court in Washington DC.

• Shortly after the Justice Department originally filed its case against Google in 2020, 35 states also filed a nearly-identical lawsuit alleging that Google illegally throttled competition. Both lawsuits will be heard during the trial.
• 150 people have been deposed, and collectively, both sides have produced over five million pages of documents (yes, you read that right). Google has employed three separate law firms in its defense.
• Judge Amit Mehta will preside over the trial (he was randomly assigned to the case) and give the final ruling in about three months (there is no jury).

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Google commands 90% market share globally of the search engine market.

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// The case against Google

The Justice Department is attempting to prove that Google illegally suppressed competition in the search engine market.

• In the opening arguments, the prosecution claimed that Google has been paying smartphone makers like Apple and Samsung, and web-browsers like Mozilla, $10 billion annually over the last 12 years to be the default search engine on devices and browsers.
• Almost half of Google’s search traffic comes from Apple devices, and 14-21% of Apple's total profits comes from Google’s annual payment.
• The Justice Department argued that Google considered these agreements a “powerful strategic weapon” to cut out search engine competitors. It has buried the results from startups that are piloting more efficient and innovative search technologies, like vertical search.
• Rival search engines, like DuckDuckGo have complained for years that Google has intentionally suppressed links to their sites, redirecting traffic towards its own content, and blocking it from gaining further market share.

The US lawsuit follows a charge by the EU in June that Google violated Europe’s antitrust laws in its online advertising business and should be broken up. In recent years, the EU has fined Google billions of dollars over various infringements: from its Android operating system, to its shopping service, to its advertising business.

// Google's defense: we're just better

In its defense, Google has made a number of arguments to demonstrate that it is doing nothing illegal.

• Superior product: Instead of doing anything illegal, their defense has centered on the claim that they simply have a superior product. In opening arguments, a lawyer for Google claimed that Microsoft pre-loaded its search engine, Bing, onto its PC devices, but consumers often switch over to Google because it is a superior product.
• Competitive market: Google lawyers have claimed that the landscape for search is changing, with consumers using a wide range of options: from TikTok to Amazon to DoorDash (Last year, The New York Times reported on how Gen Z’s search habits are shifting from Google to TikTok).
• Freedom to switch: Google has also argued that even for consumers who use Apple products, where Google’s search is pre-loaded, they can switch their default search engine in less than five steps.

// The legacy of antitrust lawsuits

In 1998, the same year that Google was founded, the last major tech monopoly case went to trial when the US Justice Department sued Microsoft for illegally grouping its various products together in a way that stifled competition and reduced consumer choice. The Judge ruled in favor of the Justice Department, arguing that Microsoft used its 90% market share in the personal computing operating system market to deny consumers the ability to choose a competing product (at the time, consumers preferred the Netscape web-browser to Microsoft’s Internet Explorer), and the resulting lack of competition led to reduced innovation. While the stakes were high at the time, the 1998 ruling didn’t translate into an ensuing period of greater regulatory scrutiny of big tech.

This time, the court must determine if Google’s contracts with companies like Apple have increased the quality of search and enhanced innovation in the space.

Ironically, some employees at both Google and Microsoft have come to believe that the ruling against Microsoft by the Department of Justice Department in 1998 actually created a competitive market that enabled Google (a startup at the time) to become an emerging competitor. Had Microsoft been able to continue its monopolistic behavior, Google might never have become so big.

// Implications for the future of tech

Jason Kint, CEO of Digital Content Next, a trade association for digital content companies, told Project Liberty, “This is the first antitrust case of this significance in a generation and carries enormous importance for the broader tech industry. At stake is whether large tech companies can leverage their dominant position, empowering unbridled data collection and scale, to squash competition and harm consumers.”

The implications for the future of the tech space are significant.

• Increased scrutiny over big tech: While an antitrust lawsuit against big tech of this magnitude hasn’t happened since the 1998 Microsoft case, it represents a growing push to regulate big tech firms. The case against Google could set new precedent for how the government reigns in big tech. The Justice Department has filed another lawsuit against Google over its advertising technology. The Federal Trade Commission is considering moving forward with an antitrust lawsuit against Amazon. The Justice Department is also investigating monopolistic behavior by Apple.
• Enabling AI disruption: If Google wins, its enduring dominance could stymie innovation and challengers who seek to integrate AI into the online search market. A policy brief by The American Economic Liberties Project suggests that Google’s hesitancy to deploy artificial intelligence in its search business is classic behavior of a monopolist who fears technological disruption. If Google loses, it could lead to more competition and innovation from new startups looking to leverage the latest AI models in online search.
• Leveling the playing field: Whether it’s the 1998 case against Microsoft or today’s case against Google, antitrust cases are important because they level the playing field for market competition and market innovation: enabling challengers to take on incumbents and protecting consumers from being exploited (though, for many reasons, incumbents are becoming harder and harder to topple).

We can’t always rely on big tech firms to build responsible technology on their own. Building technology that centers consumer protection, enables fair competition, and polices dominant platforms will require more regulation, not less, and it will require new approaches: from decentralized technologies, to shared governance models, to transparent algorithms, to technology that unites instead of polarizes. Read more about Project Liberty’s work in these areas here.

Other notable headlines

// 📋 Half of Americans expect misinformation spread by AI to impact who wins the 2024 election, and one-third say they'll be less trusting of the results because of artificial intelligence, according to a new poll by Axios.

// 💁‍♀️ Unexpectedly, Gen Z falls for online scams more than their boomer grandparents do, according to an article by Vox on the risks of online hackers and scammers.

// 🇨🇳 Deepfakes of Chinese influencers are live-streaming 24/7, as Chinese brands realize they don’t have to ever stop selling their products, according to an article in MIT Technology Review.

// 🤔 What comes after the blockchain? A new crop of fintech startups are tackling blockchain-inspired problems without the blockchain, according to an article in Rest of the World.

// 🤖 The London School of Economics and Political Science released a report on what different news organizations are doing with AI, from use cases to best practices to strategy.

// 🌍 Africa is a new hot spot for possible bans on TikTok, as governments fear the app could promote sexual content and extremism, according to an article in The Wall Street Journal.

// 📱 Parents and public health experts have a lot to say about what adolescent girls do on their phones, but an article from The New York Times asked teens to weigh in, while a second article in The New York Times explored what it’s like to be 13 years old in today’s digital world.

// 🔥 An article in The Guardian discussed how Twitter ranks worst in climate change misinformation, according to a report by Climate Action Against Disinformation.

// 📽 An article in Noema Magazine explored how the next Netflix should be owned by screenwriters, rather than wait for a fair labor deal from Hollywood studios.

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