On Monday, August 5th, federal judge Amit Mehta ruled that Google is a monopolist in violation of U.S. antitrust law.
It was a huge win for the U.S. Department of Justice (DOJ), which has filed several tech monopoly lawsuits in recent years (Amazon, Meta, and Apple are also on the chopping block).
Mehta claimed that Google violated Section 2 of the Sherman Act, a law that prohibits restricting competition in the marketplace.
What was the court’s proof?
Their main area of focus was Google’s billion-dollar exclusivity deals with web browsers and smartphone manufacturers.
The court also agreed with the DOJ that Google has a monopoly on search text advertising, and that the company artificially raises ad auction prices due to no ‘competitive constraint.’
Okay, now that we’ve covered the basics, let’s address the elephant in the room.
What does this mean for SEO?
It’s unclear at the moment since the ruling dealt with Google’s liability and not remedies. A second trial will take place that will propose potential fixes to the problem, which may mean the dissolution of Alphabet (Google’s parent company).
However, the ‘remedy’ phase may not take place until next year (or even 2026).
In the meantime, Google plans to appeal Judge Mehta’s ruling. They feel that they haven’t maintained a monopoly and that their massive popularity is because they offer the best product on the market.
What’s next? Will Google pull out a ‘get out of jail free’ card?
Stay tuned to learn more.
Trust Busting is Back in Style: An Overview of Google’s Trial
The court’s ruling comes after a 10-week trial that took place last fall.
Throughout the trial, Google remained adamant that its actions were not anti-competitive. They also disputed the court’s comparison to other players in the search engine market, such as DuckDuckGo and Bing.
To Google, they should be compared with major players where search is a major component, even if they don’t index the web. The example they provided is Amazon since the e-commerce giant has a robust search engine.
Ironically, Amazon has a pending antitrust lawsuit with the DOJ, too, claiming it’s maintained a monopoly over the e-commerce market.
Currently, Google accounts for 91.04% of the search engine market share, with its closest competitor (Bing) only maintaining a mere 3.86%.
Mobile is even worse, with Google holding 95% of the market share.
Such numbers don’t bode well when making the case that Google ISN’T a monopoly, which is something Mehta took notice of.
He commented, “If there is genuine competition in the market for general search, it has not manifested itself in familiar ways, such as fluid market shares, lost business, or new entrants.”
He also noted that Google’s monopoly has been ‘remarkably durable’ since its grip on the market grew from 80% in 2009 to 90% in 2020.
As stated before, this ruling only deals with Google’s liabilities, as the remedy phase has yet to take place. However, Google’s next antitrust trial with the DOJ begins on September 9th, and deals with its ad tech business.
The Specifics: Billion Dollar Exclusivity Deals and Inflated Ad Auction Prices
For a company to violate Section 2 of the Sherman Act, it must take intentional steps to eliminate competition within its respective markets.
In the case of Google, Judge Mehta honed in on its billion-dollar exclusivity deals with major smartphone manufacturers and web browsers.
How does this restrict competition?
The court claims it does because these deals make Google the default search engine on these wildly popular platforms, and the price tags are too large for anyone else to compete.
For example, it was revealed in the case that Google pays Apple $20 billion each year to maintain its search engine as the default on iPhones and other Apple products.
That’s not to mention Google’s exclusive deals with Samsung and popular web browsers like Mozilla Firefox.
Not only do these deals ensure Google is the default search engine on popular devices, but they also keep competitors out due to Google’s deep pockets.
For instance, let’s say you’re a newcomer in the search engine market, and you want to gain traction by striking an exclusivity deal with a phone manufacturer. Well, if you want your search engine to appear on Android or Apple phones, you’ll need about $30 billion (or more).
That’s not exactly feasible for new entrants in the market, which is why the case came about in the first place.
Mehta noted in his ruling that, “the default is extremely valuable real estate,” and that new players can only compete if they are willing to, “pay partners upwards of billions of dollars in revenue share.”
As far as text-based search ads, the court claimed Google’s exclusivity details provided it with a noticeable lack of competition. As a result, the company was free to artificially inflate ad auction prices since advertisers had no other options.
Google attempted to rebuke this claim by providing evidence that their ad auction pricing has decreased over time, but Mehta said the evidence was ‘weak.’
He also notes that, “This evidence does not reflect a principled practice of quality-adjusted pricing, but rather shows Google creating higher-priced auctions with the primary purpose of driving long-term revenues.”
Actions Digital Marketers Should Take Next
While the ruling paves the way for more trials down the line (i.e., the remedy phase), the future remains uncertain.
Google will almost certainly appeal the court’s ruling, and it’s unclear what the results may be.
Still, there’s no harm in getting prepared.
If you haven’t already, consider expanding your SEO strategy to include Bing.
This is because it will likely see a large uptick in market share if the remedy phase leads to the dissolution of Google’s parent company, Alphabet (which is a real possibility).
In the meantime, Google SEO best practices still remain in place, and there’s much traffic to be generated before the next trial, so there’s no need to change anything just yet.
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