DoJ v. Google – After the First Week of Trial, the DoJ is Still Drawing Blanks
The first week of the Department of Justice’s (DoJ) high profile trial against Google has come to an end. On Tuesday, September 12, both sides gave their opening statements and multiple witnesses, such as Hal Varian, Chief Economist at Google, took the stand. As the case continues the court is also expected to hear from Google’s CEO Sundar Pichai, Apple’s Senior Vice President of Services, Eddy Cue, and Mozilla’s CEO Mitchell Baker.
In his opening statement, Kenneth Dintzer, the lawyer for the DoJ stated that “this case is about the future of the internet and whether Google’s search engine will ever face meaningful competition.” Dintzer was right in that this case certainly might influence the future of the internet and how people search online. However, he was also wrong in a key aspect: Google does face intense competition in the search market. If the DoJ wins this case, it could set a dangerous precedent that would cause irreparable harm to competition and innovation in the search market and the tech sector as a whole.
The DoJ has made multiple claims against Google, but their case can be boiled down to two main arguments:
- Google has monopoly power in the search market, facing no or limited competition, and
- Google maintains that monopoly through allegedly illegal default agreements with different companies, in an effort to maintain Google Search’s status as the default search engine.
In the DoJ’s view, Google’s search agreements are anticompetitive and illegal since they constitute exclusionary practices that prevent Google’s competitors from entering the market and attracting new consumers. This post briefly analyzes the two arguments made by the DOJ and shows how, so far, the Government is drawing blanks in its trial against Google.
First, the DoJ claims that Google has monopoly power in the search market and has prevented competitors from properly competing or entering the market. This statement is simply false; there is a high degree of competition in the search market and users today have more search options and ways to access information online than ever before. Google doesn’t exclude or prevent new competitors from entering the market. The number of alternative search options and the introduction of new technologies such as generative AI-based search engines are clear examples of new competition and development present in the search market.
As John Schmidtlein, the lead lawyer for Google, noted in his remarks in court, Google competes with a range of specialized services when people look for information, not just broad search engines like Bing, Yahoo, and DuckDuckGo. Google competes with services such as Wayfair, Walmart, and Overstock for shopping, TripAdvisor, Booking.com, Hotels.com and Expedia for travel, and Doordash, Grubhub and Yelp for food delivery. Broad search engines, despite what the DoJ might believe, are not the only competitors Google faces in the search market.
Moreover, the DoJ claims that Google’s search agreements that set ‘Google Search’ as a default search engine in certain products are anticompetitive and exclusionary. While the DoJ is concerned when Google makes these agreements, this is a common business practice that has been used both online and offline for years and is most commonly seen in supermarkets with Slotting Fees. In fact, antitrust regulators have historically viewed these agreements for preferred placement to be legal and even procompetitive. In his opening statement to the court, Schmidtlein remarked that simply being the default in a highly dynamic and competitive market does not guarantee a high market share. Being a default service is valuable, however it does not assure the success of that service.
As noted in a previous post, more than 88% of laptop computers in the U.S. use the Windows operating system (with its default Internet Explorer or Edge web browser), yet the Windows browsers only account for a combined 13% market share of web browsers in the country.
Finally, and more worrisome, the DoJ asserts that this case is similar to the DoJ’s antitrust lawsuit against Microsoft. In response, Schmidtlein emphasized that the facts in US v. Google and the antitrust fight over Microsoft’s Internet Explorer browser “could not be more opposite and different,” arguing that people aren’t locked in to Google Search, they overwhelmingly and proactively choose it even when they’re given alternatives.
The DoJ’s arguments seem weak and will be difficult to prove as none of Google’s actions blocked consumer choice in search. Furthermore, technologies like artificial intelligence, large language models such as ChatGPT, digital assistants, and a number of other specialized search services are coming into being and challenging older search technology. U.S. antitrust laws do not protect competitors from competition, they protect consumers from harm from anticompetitive or exclusionary conduct, neither of which Google has engaged in. Right now the only thing that can be proven is that Google has created a highly valued product for consumers.