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 yo...

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