Who Is Google Actually Hurting?
The Department of Justice has taken Google to court, in the most significant antitrust lawsuit to hit in decades. It’s arguing that Google unlawfully struck billion-dollar deals to be the default search engine on smartphone browsers, with executives of Apple expected to testify about the company’s cozy partnership. If the trial moves in favor of the DOJ, Google could be forced to break up its various businesses (like Android and YouTube) into separate entities.
But, the search giant is arguing, people love Google! They choose to use it because it’s simply the superior option. So what exactly is the problem?
The DOJ and antitrust law experts would say there are actually many problems. Here’s a look at the groups arguably being put at a disadvantage by Google’s business practices, and how it affects them.
Big and small businesses use Google as a critical bridge to reach consumers, relying heavily on the company’s search algorithms to place them in the best possible position. That’s because Google is usually the first stop on a consumer’s path to making a decision, whether it’s to consider a new restaurant, headphones, or a car. And since there really isn’t any other comparable search engine, advertisers really need Google to place them in a high-up position, within the first page or two of search results. This also means Google wields a lot of power in establishing what price it’ll charge advertisers for these coveted positions, which is one of the DOJ’s main arguments that it holds a monopoly on search (about 90 percent of Google’s revenue comes from general search advertising).
“Advertisers are locked into dealing with Google and maybe they could get better deals on other search engines, but they’re not able to do that,” explained Michael Carrier, law professor at Rutgers University. That’s because there isn’t a competitive market for search currently, which results in advertisers having no choice but to work with Google when they could otherwise be negotiating with others and securing better terms.
“The fact that Google does have a significant percentage, maybe 90 percent of a relevant market, means that they don’t have to have flexibility and Google is in the driver’s seat,” said Carrier.
Small businesses in particular say they’re being squeezed by Google, with limited marketing budgets that must compete with larger corporations for the same keywords. That’s on top of Google eliminating its free G Suite, apps for Docs, Calendar, and email, that included limited features for businesses. In order to keep their access, businesses would have to pay a monthly fee.
Google is free to use, but it collects millions of pages worth of data per user every single day that it then uses to fuel its advertising services. That data is worth tens of billions of dollars, so really consumers are “paying Google by our attention to the advertising that they book,” said James Speta, law professor at Northwestern University. However, consumers have grown disillusioned with Google in recent years. A Brookings Institution survey found confidence in Facebook, Amazon, and Google dropped between 2018 and 2021, likely because of how consumer data is used.
If there were more search options beyond Google, the DOJ argues, the company would be motivated to offer better consumer protection policies and higher quality search results and algorithms. Instead, consumers basically have to just accept whatever Google puts out there. The company is so ubiquitous as the default search engine on Apple and Android smartphones that users might not realize they can seek out a different one—and that dominance means competitors don’t have a real shot at entering the market.
Consider DuckDuckGo, a private search engine that prides itself on offering greater consumer protection than Google or Facebook by identifying and blocking online trackers. It launched in 2008 but only holds 2 percent of U.S. market share. “Given the number of people that seem to care about privacy, you would think that their market share would be higher than it is, and the fact that it isn’t maybe says something about their ability to break into the market,” said Carrier.
There’s also Microsoft’s Bing and Yahoo Search, but none of these companies have secured exclusivity deals like Google has with Apple and Android. That may be because Google is just so dominant, fueled by 16 times more data on average than Bing, which has created an impossibly high barrier to entry. If the search market were more fair, as Slate’s Nitish Pahwa put it, all of this consumer data could be shared among competitors, allowing each of them the opportunity to improve their software accordingly.
In fact, the European Union previously charged Google with violating antitrust laws, including its deal to require that Google-owned apps—YouTube, Google Play and Google Maps—be pre-installed on all Android phones. Microsoft ran into the same exact problem 20 years ago when it bundled its Internet Explorer app into its Windows operating system. The DOJ sued and restricted how Microsoft could impose its Windows operating system on manufacturers that distributed Windows.
Some argue that Google’s iron grip on search could harm the future of the entire tech industry. Consider artificial intelligence, and how Google already has the upper hand, given the vast amounts of consumer data at its disposal. “The question is: What could be harmed in the future in a way that we’re barely noticing now?” explained Carrier. “A.I. is the wave of the present and future. Does Google’s ability to control search mean that they’ll have a leg up in dealing with A.I. issues?”
Speta also pointed out that “Google searches reveal when there are flu outbreaks faster than the public health authorities know it.” That’s rich, real-time data, especially in a post COVID-19 world, and it could become a relevant input as A.I. takes off. And, once again, that would mean just one company owns the majority of that data and has an outsized influence on new technologies. “That may be a good thing, that may be a bad thing,” said Speta.
Google being the dominant search engine also makes it more likely that it could fall into complacency, becoming less motivated to foster innovation that brings consumers better information, faster, and through safer methods. Competitors that might innovate stronger search options simply wouldn’t get to see the light of day, hurting the overall tech industry.
