The U.S. Justice Department’s landmark antitrust case against Google has wrapped up, leaving the parties to await Judge Amit Mehta’s bench-trial decision in the matter.
But based on the arguments presented and the publicly available evidence, the government has not made its case that the company committed “monopoly maintenance.”
The Justice Department’s case focuses on Google’s agreements with mobile-browser developers, device manufacturers, and wireless carriers to be the default search engine on Apple and Android mobile devices. When consumers buy an iPhone or iPad, all sorts of apps come preloaded, which consumers generally prefer.
Apple’s Safari is the preloaded default browser, and Google is Safari’s default search engine. In exchange for that default status, Google shares ad revenue with Apple. The user can, of course, change their browser or search engine, but the Justice Department contends that’s too hard. Therefore, the it says, the default agreements constitute illegal “exclusionary conduct.”
There are some puzzling aspects to the Department of Justice’s position. First, the agreements ultimately date back to 2005, long before Google was a market leader. There’s no plausible argument that they were originally designed to make Google a monopoly, and the Justice Department doesn’t dispute that.
Instead, they say Google should have adjusted its practices when it realized it had become a monopolist. It’s true that a monopolist can harm competition with conduct that would be innocuous from a small player. But there’s something fundamentally odd about the Justice Department’s position that conduct that was not designed to acquire or maintain a monopoly became illegal at some unspecified time and that, from that point forward, Google had an affirmative duty to change its ways.
Moreover, what is Apple’s responsibility in all of this? Apple has a huge installed base of iPhone and iPad users. It receives money from Google. And Microsoft testified, for the Department of Justice, that Apple had used them as a bargaining chip. So why isn’t Apple a defendant, whether on its own or jointly? Is Apple, which is much larger than Google, really Google’s pawn?
Third, is Microsoft’s Bing really locked out of the market because of Google’s default status in Safari browsers opened on iPhones? Microsoft is also larger than Google, not exactly a plucky little start-up. Why doesn’t Microsoft outbid Google for the default status? Presumably, the answer is because it’s not worth it to them, but why not?
The Department of Justice argues that Google’s share of the search market gives it an insurmountable advantage in data and in certain advertising markets, which is how searches are monetized. Everyone agrees that there are advantages to scale in data applications.
But that’s where things get tricky. Microsoft obviously has access to large and varied datasets, and it could always buy more.
And while the scale, scope and quality of data matter, they are subject to diminishing returns; and data are just one input among many. Innovative applications are key, and no one could dispute that Google has been an innovator in designing and developing its search engine.
For its part, Bing is also engaged in innovation, and has been an early leader in making use of AI large language models.
Following a 2018 decision by the European Commission, Android devices in Europe were required to offer a choice screen. There is no single default: users see a half-dozen choices on startup.
But Google’s share of general search on European mobile phones is still reported to be about 96%. Similarly, even though Microsoft preloads the Edge browser and Bing search engine as defaults on computers with the Windows operating system, Bing still trails way behind Google for general search on U.S. desktops.
That seems to suggest two things: first, that it’s possible for users to choose their preferred search engine; and second, that users prefer Google enough to gravitate to it, regardless of whether it’s the default. Maybe quality is the key issue for both default value and market share.
There’s much more to the case, but what the government has failed to demonstrate is how users who prefer an alternate search engine to Google, such as Bing or Duck-Duck-Go, are hindered from using one – or, for that matter, how the majority of consumers, who would actively choose Google in any case, would be better off if that choice were made less convenient.
In antitrust, there are always two questions: the conduct and the remedy.
If Google is found liable, what is the court supposed to do about it? Would consumers be better off without defaults? With a European-style choice screen? Would they be better off if Bing were the default browser? If not, what is the court supposed to do?