U.S. Government Sues Google Over Monopoly in Industry

When Google was founded 25 years ago, it was just one of several possible search engines for browsing the web. After all these years, Google now controls 90 percent of the search engine market, and whether it achieved this monopolistic status through illegal means will soon be determined after a major antitrust trial begins this week. The U.S. Department of Justice has initiated the largest monopoly trial since 1998 when Bill Gates’ Microsoft empire was taken to court over allegations of illegal market competition. The lawsuit against Google was filed back in 2020 and represents the largest legal challenge regarding the influence and power of big tech companies, and if successful, the lawsuit could serve as a ‘guideline’ in the fight against monopolies in the industry.

– The trial against Google will have significant consequences for our digital world, where the outcome will determine how millions of Americans access and use the internet, said Katherine Van Dyck, senior advisor at the nonprofit American Economic Liberties Project.

The Department of Justice has accused Google of using its market power to unfairly exclude competitors and position itself as the ‘gatekeeper of the web.’ This is the first case the government has brought against Google that has reached the courts. The Department of Justice has also joined a separate case against Google initiated by attorneys general from 38 states due to concerns about advertising monopolies.

What does the Government say?

The Department of Justice’s case focuses on Google’s contracts with hardware companies like Apple, under which Google Search becomes the default option on iPhone devices as well as on other devices. The Department of Justice claims that such deals, worth billions of dollars each year, represent an illegal abuse by Google to undermine competing search engines. Thanks to contracts with companies like Apple, Samsung, and Mozilla, Google has been the default search engine for billions of web users who open a browser on their phones, tablets, and personal computers. The government claims in the lawsuit that Google’s billion-dollar payments to partners have prevented other search engines like Microsoft Bing and DuckDuckGo from accumulating a significant share of the online search market. The Department of Justice also argues that Google’s practice of installing its services on devices that illegally use its Android software has helped the internet company maintain its monopoly.

The CEO of the privacy-focused search engine DuckDuckGo stated that an Android smartphone user must take 15 steps to select DuckDuckGo as the default search engine for their phone.

However, Google argues that its contracts with other tech companies are not anti-competitive because, although it takes a few clicks, users are not prevented from choosing another default search engine.

What does Google say?

Google states that its business practices are legal and customary, and claims that agreements with other manufacturers are similar to those in retail, where a manufacturer pays extra to have its product placed in prime locations in supermarkets. The search giant has also repeatedly asserted that it has numerous successful competitors in online search, citing Amazon and TikTok, even though they are not directly related to traditional internet searching. While they do not operate general-purpose search engines, Google claims that these are rival destinations where consumers go to find products or content that completely bypass Google. Google has also stated that the government is using a flawed argument to target the company due to its popularity. The company believes it is successful because it has the best search engine. Consumers have the choice to use other search engines, it is claimed, but they choose Google because it is the most useful to them.

What must the government prove to win its case?

The government must show that Google has a monopoly over the areas of the economy in question in this case. The government will attempt to convince the judge to take a relatively strict stance on what constitutes a search engine and to dismiss Google’s argument that e-commerce sites like Amazon or social media like TikTok or Instagram are in the same market as Google’s search engine. The broader the market, the easier it is for Google to argue that it does not have monopolistic power. The government also needs to prove that Google’s commercial contracts have significantly reduced competition among search engines by denying them the opportunity to enter into similar deals with device manufacturers or gain new customers. The Department of Justice will likely also need to explain how these business practices have directly or indirectly harmed consumers, which has been a significant hurdle for judges considering antitrust cases for decades.

What to expect

During the 10 weeks of the trial, Google executives will attempt to justify their business practices, primarily CEO Sundar Pichai.

If Google loses this case, the ruling could diminish its status and influence in the tech industry, which could limit how Google can compete in the market and redistribute power in Silicon Valley. This is also a test for governments that say tech giants like Google, Apple, Amazon, Microsoft, and Meta, which owns Facebook and Instagram, have too much influence over our online lives. National antitrust laws were first written over a century ago, and this trial will show whether they can be used to rein in the rapidly evolving tech industry.