Yes, Google is Abusing Its Search Monopoly (Premium)

On Tuesday, the U.S. Department of Justice and several U.S. states launched a civil lawsuit against Google, accusing the tech giant of abusing its market power in online search monopoly to maintain that monopoly and abusing consumers, competitors, and partners while doing so.

Insiders have charged that the DOJ rushed this case to court in order to get a last-minute legal win for the current presidential administration ahead of what could be a crushing electoral defeat. But even in this reduced form—the DOJ’s investigation involved several other substantive charges as well—the government has made a compelling, even overwhelming, case for Google’s guilt. So the question isn’t whether Google is abusing its monopoly in online search, of course it is. The question is what to do about it.

Google’s response to the accusation is, if expected, still quite interesting because it ignores the reality of Google’s situation, not just as a monopolist but as an abusive monopolist. Here, the firm is literally using the same strategy that Microsoft used in its own ill-fated U.S. antitrust case of 20 years ago, alleging that its competitors behave in the same manner as it does, and that alternatives are just one click away, and pretending that its actions benefit consumers.

This is the wrong position to take, and not just for the obvious legal precedent.

For example, one of the key DOJ complaints is that Google pays Apple to be the default search engine in Safari, giving it access to Apple’s one billion-plus customers. Google’s response is that Bing and Yahoo! also pay to be featured (somewhere) in Safari, and that changing your default search engine is
easy.”

Oh, Google.

Bing and Yahoo! have tiny, minority search shares, so this behavior is both perfectly legal and sadly necessary. Only Google, with its monopoly market share in search, is paying not just to maintain that monopoly, but to be the default search engine, and just not “featured.” No one—almost literally—changes the default in this case.

The DOJ also complains that Google uses its Android licensing chokehold to force handset makers to make Google Search the default if they want access to Google’s other valuable apps and services. Google calls this arrangement a “promotional agreement,” language that suggests a temporary condition like a holiday sale. You know, something fun for everyone.

“These agreements enable us to distribute Android for free, so they directly reduce the price that people pay for phones,” Google lies, since it does not distribute Android for free: Handset makers pay for access to Google’s apps and services. “But even with these agreements, carriers and device makers often preload numerous competing apps and app stores.” They sure do. But none of them can be made the default in most app categories, thanks to Google’s “promotional agreement.”

Here, again, Google explains how “easy” it is to change your search engine in Android, when no one—almost literally—changes the default in this case either.

Google also explains that Microsoft preloads Edge in Windows 10 and that Edge uses Microsoft’s Bing search engine by default, as if this behavior clears itself of doing similarly on its own platforms. But this doesn’t help Google’s case: Despite being preloaded in Windows, Edge controls just 7.48 percent of the desktop web browser market (worldwide). And despite being preloaded in Edge, Bing controls just 13.17 percent of the desktop search market (worldwide). Here again, Google’s monopoly power assists in keeping the top choice on top.

Google also never mentions any of the small, nefarious things it does when you do switch your default search engine, or when you try to use Google services on the web with a non-Google browser. In such cases, users are endlessly cajoled into switching the Google default, because it is safer (nonsense) or better (worth discussing).

On that note, where Google does make a good case is that, despite the abuses, Google Search really is the best online search engine. “People don’t use Google because they have to, they use it because they choose to,” it correctly claims. The Microsoft example above points to this reality, and I have to wonder whether iPhone users would simply switch to Google if Bing or Yahoo! or some other search engine were the default.

But that’s the problem: I have to wonder. The entire point of this case isn’t that Google has a monopoly or whether it arrived at that monopoly legally. The issue that Google is illegally maintaining that monopoly. And it is absolutely doing so.

But this claim, from Google, is chilling in its cluelessness.

“American antitrust law is designed to promote innovation and help consumers, not tilt the playing field in favor of particular competitors or make it harder for people to get the services they want,” it says.

Right.

Google, you are tilting the playing field in favor of your own products and services through your Search business practices, and you can do so because you are the gatekeeper to the Internet for most users. And you are even making it harder for people to get to the services they want by promoting your own services over what they were really looking for. That Search itself is one Google service that consumers both want and prefer is fine. But there’s precious little reason for other companies to even try and innovate in a market that has been sewn up by one company, and that robs consumers of alternatives that never even get invented, let alone seen.

So what’s the solution?

First, I don’t believe that the U.S. government can or should break up Google, separating its Search engine from the rest of the company or from its advertising business.

But I do think the Microsoft precedent provides a viable way forward for Google, that it needs to be prevented from promoting its own services over those of competitors, and that it should be prevented from forcing Android handset makers from giving precedent to Google apps and services, and that it should not be allowed to buy its way onto iPhones or other platforms. Let the consumers decide.

Put simply, I don’t believe that Google achieved its monopoly illegally, but the government is right to step in and try and prevent it from further abusing its monopoly market power. And it has a responsibility to protect consumers and competition, and thus the innovation that lies at the heart of personal tech, which is a primary driver of our economy. And the right way to stop Google from further abuse is to enforce competitive business practices via a consent agreement or court victory with direct oversight for some several years. This type of enforcement reined in Microsoft. And it will rein in Google.