By Ryan D’Orazio
Google’s dominance in the online search market, accounting for nearly 90 percent of all worldwide searches, has recently come under accusations of anti-monopoly practices. Regulators allege Google’s misuse of its marketing power and buying influence have significantly shrunk the competitors within the space.
While the dust has yet to settle, there are major implications that have yet to be ironed out. Not only will this outcome impact Google’s future, but also the competitive landscape of all search engines.
Microsoft’s Monopoly Maintenance
In the late 1990s and early 2000s, Microsoft faced a similar battle with the U.S. Department of Justice in which they were accused of anticompetitive behavior in the software market. The claim against Microsoft was that it was difficult to install competitors’ software but also difficult to uninstall their own software. The initial findings of fact validated this claim.
Microsoft was found guilty of constituting a monopoly and thus was ordered to be divested. However, the decision was appealed in the Circuit Court and the result changed in the favor of big tech; Microsoft no longer needed to be split and instead received settlement obligations.
Examining Partnerships with Reddit and Apple
Fast forward twenty years later, United States v. Google is using the Microsoft case as a precedent to build their argument against the tech giant. In the most recent trial that ended on August 5th, 2024, search engine companies testified on the stand regarding the consequences of Google’s market share dominance. Neeva, an ad-free search engine start-up, expressed how Google’s $26 billion deal in 2021 to become the default search engine on Apple products has blocked their ability to compete effectively.
Ironically, Microsoft also took the stand and stated they could not compete with Google after years of failing to get Apple to set Bing as the default search engine on their products. Microsoft claims they offered Apple more than 100 percent of the revenue or gross profit to make Bing the default, but the proposal was rejected because of Apple’s deal with Google.
This was not the only deal that Google had orchestrated to gain an advantage in the market. Just this past year, Google was paid $60 million by Reddit to have their various network of communities, known as subreddits, prioritized at the top of search results. Reddit had also blocked other search engines from “crawling” the website, meaning that Google was the only search engine allowed to show Reddit in search results.
In the following months, Google released AI Overviews which seemingly spammed Reddit communities for every search result initiated through the engine. As a result of Reddit being thrust into search results, they have reached as high as the fifth-most visited domain in the world.
Judge’s Ruling
With these facts at hand, the presiding judge overseeing this case was skeptical of Google’s claim that they operate in a fair market. In his ruling, he stated the founders of the landmark Sherman Act would be concerned regarding the ability to dislodge Google as the default search engine, and further added “the reality is that Google is the only real choice.”
The Justice Department has proposed a few remedies that clash with Google’s claim that these changes would have a ripple effect on their global technology leadership and would break a range of their products. The most impactful proposition has been for Google to sell their prized possession, the web browser Chrome, which accounts for 57 percent of its revenue.
Solutions for Google
The DOJ has also proposed alternative remedies for the web browser to either allow competitors access to the data they have collected or require Google to stop collecting it altogether. The most practical solution would be the former, which would allow other search engines, like Bing and DuckDuckGo, to tap into Google’s colossal collection of user data across their networks. The only issue with this is that the Justice Department argues this data is the heart of Google’s ability to establish a monopoly.
Aside from allowing competitors access to Google’s first-party data, another realistic proposition would be to prohibit the exclusive deals Google can make to be the default search engine with device manufacturers and web browsers. This may even require Google to cease any additional agreements and force any existing deals to be restructured or terminated. Google argues their market share dominance is directly correlated to the quality of their product, and not due to the fact they are the default.
While it’s not a likely outcome, Google may face a long road to recovery if forced to divest Chrome. Not only is it a primary source of revenue, but also a key asset in data collection that informs their advertising algorithm to serve ads. If Google were to provide competitors with access to this data, they would certainly lose their competitive advantage for targeting, but similar to ceasing the exclusive agreements, it would not debilitate the company.
Next Steps
Google has appealed the ruling with the remedy phase hearing set to begin in April 2025. Leading up to the next trial, the Department of Justice will need to argue why Google should sell Chrome, and present remedies that would be mutually beneficial.
As of today, nine out of every 10 searches are completed through Google. If Google’s data can be used on competitor search engines, it should certainly generate more competition in the market for the smaller search engines.