“The Google of today is a monopoly gatekeeper for the internet,” according to the U.S. Department of Justice’s (DOJ) recently filed lawsuit against the tech giant. The case is America’s largest antitrust suit in roughly two decades and was filed jointly with 11 attorneys general, including Georgia’s.
If they’re victorious, then such a ruling would have far-reaching implications, which could theoretically lead to the separation of some of Google’s assets, among other outcomes. However, the suit seems flimsy, and given that it was filed a couple weeks before the election, it may be little more than an act of political theater.
Nevertheless, according to the DOJ, Google has become a monopoly that is illegally protecting its status by entering into exclusive agreements with other companies to promote the Google search engine. The DOJ is correct that Google has morphed into a massively successful company. In fact, “Google effectively owns or controls search distribution channels accounting for roughly 80 percent of the general search queries in the United States,” the lawsuit reads.
But last I checked, Google’s search engine (desktop or mobile) doesn’t enjoy a monopoly—at least according to the common understanding of the term: “the exclusive possession or control of the supply of or trade in a commodity or service.” Rather, there are a host of other successful general search engines, including Bing, Yahoo, DuckDuckGo, etc., and very popular vertical search engines, like Amazon, Expedia, and Yelp!, that wield considerable influence and compete with Google.
Instead of relying on the broadly accepted definition of a monopoly, the government, on the other hand, defines monopolies so amorphously that myriad successful companies could conceivably come under government scrutiny, which evidently gives the DOJ latitude to target Google. The crux of the DOJ complaint centers around Google’s agreements with mobile device manufacturers, wireless providers, and browser developers in which they have agreed to pre-load Google as the free default search engine on many mobile devices.
So, how is this problematic? According to the DOJ, it gives Google an unfair advantage over their competitors because while their service is free to consumers, Google generates revenue by selling digital advertisements. The agreements with mobile companies, means Google will likely garner more users, and the more search engine users that they have, the more companies will want to buy Google ads.
In a nutshell, this is the case against Google, but there are some serious problems with it. First, I’d wager that most Americans appreciate having a search engine already installed on their cell phone. After all, they can just turn on their phone and immediately start surfing the web, but the truth is that mobile phone owners don’t have to use any search engine to use their device if they don’t want to.
Further, if they don’t care for Google, then they can quickly and easily install any other search engine that they please. There are many to choose from too. In fact, I decided to test this out on my cell phone. While I was drafting this column, I effortlessly installed Bing within a matter of seconds.
Finally, there was nothing stopping other companies from attempting to secure exclusive deals with mobile device manufacturers or wireless providers. Rather, they probably sought out this business but might have undervalued it, unlike Google.
In the end, Google’s agreements simply provide for exclusive pre-installation agreements and guaranteed prominent product placement, but this isn’t predatory or an unusual business practice. Take the food industry for instance. Grocery stores enter into agreements whereby their partners can create prominent product displays in their shops. Of course, you don’t have to buy these products if you don’t want to. If you prefer a different maker, then you may just have to walk a little further.
Restaurants even go a step beyond Google’s tactics and often enter into exclusive agreements with certain beverage companies, while banning their competitors. This is considered acceptable behavior so long as it somehow fosters some competition and benefits consumers, and there is a case that it does.
The bottom line here is that it’s hard to claim that any company has a monopoly when consumers can freely and easily choose to use one of its many competitors instead. Likewise, in Google’s case, it still has to compete with numerous other search engines.
It’s true that Google—much like many large tech companies—has become a lightning rod in today’s political environment. But love Google or hate it, it doesn’t meet the generally accepted definition of a monopoly, given that competitive pressure from rivals prevents Google from exerting monopoly power. Nevertheless, if Google loses the antitrust suit, then it could create a dangerous precedent, and a host of companies could come under scrutiny, which could ultimately hurt consumers.
Marc Hyden is the director of State Government Affairs at the R Street Institute, and he is a long-time Georgia resident. You can follow him on Twitter at @marc_hyden.