Google, and its parent company Alphabet, have been called monopolies in the past. But as of 2023, there are a variety of antitrust lawsuits — most notably by the United States Department of Justice — stating that Google’s hold over the Internet is just too powerful.
These lawsuits state that Google is engaging in anticompetitive behavior and thus, harming consumers. Depending on the final ruling, these court cases could change how Google operates and greatly affect the tech giant’s market prominence. In this article, we will break down antitrust law and the exact charges against Google — and what all of this means for Google’s hold over the Internet.
What Are the Current Antitrust Lawsuits Against Google in the United States?
Google is not a stranger to antitrust lawsuits or litigation in general. There’s quite a long list of court cases, both in the United States and abroad, which have been filed with varying success against Alphabet, Google, and Android. Currently, there are a variety of high-profile cases being brought against Google in the United States.
One is an antitrust case brought by the Attorney General of Texas, in collaboration with ten other states, which claims that Google has a monopoly over digital advertising. Another lawsuit by Colorado and thirty-seven other states, claims that Google has engaged in anticompetitive practices against other search engine companies such as Yelp or Kayak.
But the most important antitrust lawsuit against Google was filed by the Department of Justice in 2020 and is scheduled to go to trial in 2023. Originally, this lawsuit had roots in an extensive 16-month bipartisan investigation into the anticompetitive behaviors of Big Tech Companies by Congress.
The Department of Justice (DOJ) Antitrust Lawsuit Against Google.
In 2020, the Department of Justice sued Google, claiming that Google is engaging in anticompetitive behavior by prioritizing Google Search results to the detriment of its competitors.
The case states that “Google has unlawfully maintained monopolies in search and search advertising” by doing the following:
- Forcing companies, including phones which use Android operating systems, to make Google Search the default search engine, and making this search engine choice undeletable.
- Forcing Apple to use Google Search as its default search engine on Safari.
- Using company profits to buy preferential treatment for Google Search on a variety of devices, essentially forcing out other competitors from the search engine market.
The filing even goes as far as to claim that Google is acting as the “gatekeeper of the internet.” To determine the likelihood of this antitrust lawsuit being successful, it’s important to have an understanding of how antitrust lawsuits work and how they are narrowly defined in the United States.
What Are the Antitrust Laws in the United States, and When Does an Antitrust Lawsuit Happen?
Antitrust laws in the United States originated in the late 1800s after Congress began to take measures against railroad, oil, and other companies that were creating monopoly structures to benefit themselves over consumers. As such, antitrust lawsuits in the U.S. generally occur against monopolies – and what a monopoly is has a strict definition.
What Constitutes a Monopoly in the United States?
A monopoly refers to a market structure where a company controls the vast majority of, or in some cases all, of a market. Because there is very little or no competition in a monopolized market, consumers cannot seek out other options, such as higher quality or lower cost products, as alternatives.
Are Monopolies ******* in the United States?
Contrary to popular belief, no. In fact, in some cases, monopolies are created because monopolizing a market keeps costs down and helps consumers in certain situations. Monopolies are only unreasonable and risk becoming ******* and unlawful in the United States when they hurt consumers. This is where antitrust laws come in.
The Three Main Antitrust Laws in the United States.
The United States’ main antitrust laws are designed to criminalize and break up monopolies that are harming consumers – and specifically target companies that are actively working in unreasonable manners to restrict competition.
- The Clayton Act — Prohibits mergers that would result in unreasonable monopolies.
- The Federal Trade Commission Act — Forbids anticompetition practices specifically when it comes to state commerce. However, if violated, this law does not carry criminal penalties.
- The Sherman Act — Outlaws all “contracts, combinations and conspiracies that unreasonably restrain interstate and foreign trade”. Sherman Act violations are considered criminal felonies. This act is the cornerstone of antitrust law in the United States because it provides a specific definition around when an antitrust lawsuit can be brought — only when an unlawful monopoly exists. The Sherman Act specifically states that “an unlawful monopoly exists when only one firm controls the market for a product or service, and it has obtained that market power, not because its product or service is superior to others, but by suppressing competition with anticompetitive conduct.”
Thus, antitrust lawsuits in the U.S. must not only demonstrate that competition is being suppressed, but also that one firm controls the market. This is particularly difficult with regards to Big Tech — there are often disagreements about what a market is, and what services might hold a monopoly over said market.
Will the Department of Justice’s Antitrust Lawsuit Against Google Be Successful?
Because antitrust laws in the United States are centered around market dominance, monopolies, and ******* monopolies, the DOJ will have to prove multiple claims to be successful. For one, it must prove that Google is a monopoly. For another, they must show that Google is using its power in a way that is pushing competitors out of the market and, harming consumers as a result. The DOJ case is specifically targeting Google Search and Android, which fall under the offerings of Google LLC.
The Distinctions Between Alphabet, Google, and Android.
One key component of whether or not the DOJ’s arguments will hold up in court is specifically which of Google’s services, and which parts of the company structure, are supposedly violating antitrust law. This also will affect what, if any, repercussions that Google will suffer from if the tech giant loses in court.
As a refresher:
- Alphabet is a multinational holding company, which was created through a restructuring in 2015. Alphabet is the parent company of Google.
- Google, specifically Google LLC, is a multinational technology company that was founded in 1998 and offers a variety of services including Google Search, Gmail, Chrome, Youtube, and Android. Many of these services have extremely large market shares — such as Google Search, which has over 90% of the market share for search engines worldwide.
- Android is Google’s operating system for mobile phones. Android is the dominant OS for most of the world, (the United States being the notable exception). In some countries like India, Android makes up nearly 95% of the market share.
Because each of the above companies and services are part of different markets and have different market shares, the arguments to prove that they are monopolies will be different.
So Is Google an ******* Monopoly?
Eric Schmidt admitted that Google is “in a monopoly area” when he testified in front of Congress.
Some evidence that supports this claim is that around 90% of all web searches take place through Google Search. And since Google is not a search engine, but an advertising platform, it is making quite a bit of profit off of these searches. The word “google” has become synonymous, in many ways, with searching the internet – and it is even included in the dictionary as such.
However, Alphabet claims Google Search is not a monopoly, and their reasoning may hold up in court. Antitrust lawsuits against Big Tech in the United States have been tricky to win in part because the definition of an ******* monopoly is very rigid, and the definition of a market is vague.
Are Consumers Choosing to Use Google Search Because It’s the Best Option?
First of all, Google claims that consumers are choosing to use Google Search over other search options because Google is the best choice. The reason that there isn’t high competition in the market, Google claims, is because consumers have the option to use other search engines, but choose not to. Hence, Google says, they are not engaging in anticompetitive behavior – consumers simply prefer Google Search over other search engines.
This argument holds up, in part because, as this article by Tim Brennan argues, U.S. antitrust law hinges on “competition in the market, not competition for the market.” Because innovations in tech happen so fast, new markets are being created, and old ones are dying out, much much faster than they did in other industries in the past.
If the law was changed, as Brennan argues, it could be possible to demonstrate that Google is essentially gatekeeping the search engine market and preventing other companies from gaining a foothold at all — thus demonstrating Google is an ******* monopoly.
While this argument may be plausible when referring to Google Search, it is tougher to make in other situations, such as lawsuits that target Google’s hold over the Android Operating System — where Google Search is the default and it is extremely difficult for consumers to uninstall it and choose a different method of searching the web.
Google Search Is a Free Service and Cannot Harm Consumers.
Another level of defense is that Google Search is a free service offered to consumers. Because antitrust lawsuits in the United States have to prove that a consumer is being harmed, it is considerably more difficult to do so if the service is offered for free.
It Hasn’t Been Legally Proven that Google Is a Monopoly.
Finally, as Schmidt claimed in his testimony to Congress, there has yet to be a legal proceeding or ruling as of 2023 that outright states that Google is a monopoly. This may seem like semantics, but it could have a bearing in court.
Because the DOJ is specifically looking at Google Search and Android, their arguments are limited to just those products and markets. This is why antitrust lawsuits and fines against Android have tended to be more successful in other countries. Elsewhere, antitrust laws can easily demonstrate that Android — a paid-for operating service that comes with one’s smartphone — has been trying to squash the competition.
Why European Antitrust Lawsuits Have Been More Successful Than Ones in the United States.
In contrast to the United States, the European Union has been able to win antitrust lawsuits against Google on several occasions. So far, Google has lost the following antitrust cases in Europe:
What constitutes an unlawful monopoly in the European Union has a different definition than it does in the United States, specifically that the threshold of what a monopoly is lower to cross, and therefore easier to argue in court.
The arguments in the European Union against Google hinge on the fact that Google is misusing its data and harming consumers. It’s not about the size of Google or defining what exactly the market is, it’s merely just that the data Google does have is being utilized in an anti-competitive way.
However, the European Union can only impose fines, not criminal penalties, against unlawful monopolies, although it is possible for member states of the EU to bring criminal charges. So even though the European Court of Justice has been winning against Google in court, the fines that it has been able to impose — even though they are in the billions — are only a small percentage of Alphabet’s massive value. And it wouldn’t force the company to break up, as a successful lawsuit in the United States would.
What Other Options Could Be Used to Reign in Google’s Market Dominance?
While it remains to be seen whether or not the DOJ can successfully make a case against Google in court, there are some other options that could be used to reign in Google’s power. US Congress has introduced two pieces of legislation that appear to target Google, and wouldn’t require a court to enforce them.
The first is the Open App Market Act. This legislation forbids companies that operate app stores with more than 50 million US users from engaging in anticompetitive behaviors, including unreasonably preferencing the app store company’s search results. Although Google and Apple are not explicitly named in this act, they would be the main companies that would be forced to comply if the law was passed.
The second act is the American Innovation and Choice Online Act, which is an increasingly important and substantial piece of legislation that is the result of a nearly 16-month investigation into tech company habits.
As this article from Bloomberg outlines, the act would forbid companies from designing algorithms that favor their own products and not allow companies to limit users’ access to other platforms. It would also require companies to make it easier for users to select other options besides the default pre-installed applications that favor one tech company over the other.
As a result, legislation against tech companies may ultimately be more effective than antitrust lawsuits in the United States. However, in some cases, measures against Google have been more effective when action has been taken abroad.
If Antitrust Lawsuits Against Google Are Successful, How Will This Impact SEO?
If Google is forced by the Department of Justice to break up as the result of a successful antitrust lawsuit, it could have a large impact on SEO. It’s important to remember that SEO practices shaped the Google search algorithm, and vice versa. SEO as we know it is normally optimized for Google and not other search engines.
If an antitrust lawsuit was successful, Google Search wouldn’t change overnight. However, if the search engine market was to become increasingly diverse, common SEO strategies, including how to best optimize to appear in the SERPs, link building strategies, on-page optimization, and other SEO methods, would have to adjust to these changes to become more accommodating of other search engines.
Whether or not the antitrust lawsuits will be successful and actually lead to a breakup of big tech remains to be seen. In any case, this case, and any that follow Google or other Big Tech company should be closely followed. The results will directly impact how consumers and internet users interact with the world wide web.
As of January 24th, 2023, the DOJ has announced yet another antitrust lawsuit against Google, this time claiming that the tech giant’s digital advertising policies result in substantially higher rates for consumers, including the U.S. Government. While the outcome of the case remains to be seen, prosecutors specifically requested that “ a federal judge (force) Google to break up its advertising segment from the rest of the company” – meaning that, if successful, this antitrust case could result in a significant restructuring of Google.
