If I asked everyone reading this, “How did you find this article?” I’m willing to bet that about 90% of you would answer with the same word — “Google.” It’s a company so ingrained in our lives that its very name has become synonymous with “search.” You probably use it for everything from email and navigation to watching cat videos and much more. For a company that doesn’t charge anything for most of its services, Google has improved the quality of life for almost all of its 4.9 billion users, leading most to have little to complain about regarding the tech giant.
Hence, in 2020, when the U.S. Department of Justice filed an antitrust lawsuit against Alphabet, Google’s parent company, it is easy to understand how most people’s instinctive reaction was in support of the $1.7 trillion company. However, if the judge, Amit P. Mehta, does, in fact, rule against Google, it will be a win for all consumers worldwide.
The lawsuit began in September 2023 and is the first significant anti-trust lawsuit to reach trial in the modern internet era. The case, referred to as U.S. et al. v. Google, centers on whether or not the tech giant illegally cemented its search engine’s monopoly through agreements with prominent companies, notably Apple, whom Google pays 18 to 20 billion dollars annually to ensure that Google’s search engine is the default option on all of Apple’s devices. In addition, Google also provides significant monetary payments to AT&T and Verizon for similar deals. When combined with the fact that Alphabet is also the sponsor of Android OS – the only real competitor to Apple’s IOS, it’s clear that the tech giant has ensured that Google is ubiquitous as the first-line search engine on any mobile device. In fact, Google’s search engine currently commands a staggering 90% of the market in the United States and 91% globally, indicating the company’s economic dominance nationally and globally.
While consumers can change their preferred search engine after setting up their devices, the Justice Department argues that these contract-enforced defaults discourage consumers from considering alternatives to the point that it is nearly impossible for any alternative to establish themselves in the market. With this reasoning, the Justice Department alleges that these agreements illegally stifle competition, limit consumer choice, and maintain Google’s functional monopoly.
The Justice Department seeks to address this monopolistic behavior by proposing to reform Google’s existing business structure. The contention is not over whether Google is a functional monopoly in the search engine space – that is unequivocally true – but whether the company is engaged in illegal anti-competitive agreements with device manufacturers to maintain that monopoly.
On the other hand, Google contends that its agreements with companies like Apple were far from exclusive, asserting that consumers were still allowed to modify default settings on their devices and opt for alternative search engines. Moreover, Google underscores that its search engine’s superiority over competitors is the primary cause behind its pronounced dominance rather than any anti-competitive agreements. In essence, the company’s stance is this: If there must be a default, why not Google, especially if it’s what everyone prefers?
Furthermore, Google positions itself as a pro-consumer company, claiming its ability to benefit consumers is stifled by the Justice Department’s frivolous lawsuit. This attitude is reflected in a statement by Google’s President of Global Affairs, Kent Walker, who criticized the trial: “American law should be about promoting benefits for consumers. If we move away from that and make it harder for companies to provide great goods and services for consumers, that’s going to be bad for everyone.”
This sentiment resonates with many of Google’s customers who have, for the most part, found Google to offer superior products compared to its competitors. Google’s search engine has the highest customer satisfaction index score – 80 out of 100 – compared to all other competitors. Therefore, there may not be substantive reasons to impose limitations on Google’s practices that could potentially hinder its ability to provide the services consumers prefer.
However, this perspective overlooks a much larger point. While Google may be the best option for consumers now, that doesn’t mean it always will be. We are swiftly approaching a juncture where generative AI could completely revolutionize search engines to provide more accurate, personal, and accessible search results. Microsoft-owned OpenAI’s GPT-4 outperforms Google’s PaLM 2, suggesting that Google may not be the best-positioned company to lead this upcoming era of innovation.
Moreover, Google might be reluctant to adopt generative AI search engines because they sidestep conventional search engine optimization (SEO). Currently, businesses pay substantial fees to Google to display their websites in response to specific queries. For instance, McDonald’s may bid for the terms “hamburger” or “french fries.” Generative AI search engines operate differently, utilizing their algorithms to instantly summarize and present top results tailored to the user’s specific queries and preferences, bypassing the need for company-sponsored search terms and traditional SEO. While SEO could still play a role in generative AI search engines, its impact would be diminished, potentially leading to a significant revenue loss for Google.
Thus, Google has strong incentives to limit AI’s innovations for search engines. Google may not unlock the full potential of AI for assistive search if it can sustain its dominant 90% market share in search engines through existing contracts. This dynamic would impede progress in the competitive landscape of AI technology.
Additionally, these contracts effectively create insurmountable barriers for new companies aiming to enter the search engine market and vie with Google. If, by some remarkable feat, a company manages to develop a search engine that surpasses Google, it remains virtually impossible to gain substantial market share when all consumer-purchased devices come preloaded with Google as the default, endorsed as the superior choice. This scenario hampers competition and stifles the potential for genuinely innovative alternatives to emerge.
The history of antitrust in the United States against tech conglomerates proves this precedent. When AT&T was forced to break up in 1984 after facing a similar trial, the ensuing competition fostered the perfect environment to catalyze the Internet revolution of the 1990s. Delving further into history, the 1960s breakup of IBM paved the way for other firms like Microsoft and Apple to enter the personal computing industry, spurring groundbreaking innovations. It’s evident that competition sparks creativity and innovation, yielding long-term consumer benefits.
Ultimately, while the outcome of Google’s antitrust lawsuit is likely a few years away, consumers should embrace antitrust lawsuits against large tech companies to hold tech giants accountable, promote fair competition, and ensure a future that prioritizes their interests in the ever-evolving digital landscape.
