The Department of Justice (DOJ) and 11 states have recently sued Google, alleging violations of antitrust law for stifling competition to maintain its dominance in search and search advertising. The suit claims the search engine giant took action to harm competition and prevent rivals from growing market share.
Google By the Numbers
There’s no disputing that Google is the market leader in search and search advertising. Google has an estimated 86% share of the worldwide search market and 73% market share in search advertising.
The complaint targets several actions Google has taken in recent years as using its monopoly power to thwart competition, including:
- Negotiating exclusivity agreements to prevent the pre-installation of competing search engines on other platforms
- Agreements that require the pre-installation of Google search on mobile devices. Sometimes, the Google app is not able to be deleted by consumers
- Paying Apple and other browsers for exclusive rights to provide search browsers by default
In a statement, the DOJ said Google used its “monopoly profits to buy preferential treatment for its search engine on devices, web browsers, and other search access points, creating a continuous and self-reinforcing cycle of monopolization.”
Google Responds to the Antitrust Lawsuit
Google responded to the charges on its blog. SVP of Global Affairs and Chief Legal Officer Kent Walker said that case is deeply flawed. “People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives,” he said.
Walker also writes that the lawsuit ignores that Google competes with more than search engines. It links to a report from Seeking Alpha that 60% of shoppers start their search on Amazon versus 26% on Google. “People find information in lots of ways: They look for news on Twitter, flights on Kayak and Expedia, restaurants on OpenTable, recommendations on Instagram and Pinterest,” he said.
He compared paying to be the default search engine on smartphones as being no different than when a cereal brand pays a supermarket to showcase its products at eye level or on an end cap.
It’s not the first time the DOJ has gone after tech companies for antitrust concerns.
The Microsoft Antitrust Lawsuit
In the late ‘90s, the DOJ and a coalition of Attorneys General also sued Microsoft for violating federal antitrust laws. It charged Microsoft over tactics it used to protect its operating system and Internet Explorer browser. The government claimed the tech company used its market dominance to prevent rival Netscape from getting a hold in the browser market.
The concern was that if Microsoft dominated the browser market, it would dominate as the internet evolved.
The government won the case after a protracted battle. Microsoft said it would damage innovation but that proved to be wrong. With a cautious Microsoft operating with limitations, other browsers emerged, including Google Chrome which is now the most popular browser in the world.
Interestingly, the companies that perhaps benefit the most from the antitrust suit against Microsoft were Google, Facebook, and Amazon – now the subject of antitrust scrutiny.