With just four words, a federal judge has potentially changed the way Americans search the internet.
“Google is a monopolist,” U.S. District Judge Amit Mehta wrote in a 277-page decision this week.
The ruling came four years after the U.S. Department of Justice and 14 states, including Georgia, sued the tech giant over its exclusive contracts with companies like Apple, Samsung and Mozilla that made Google the default search engine in browsers and on devices.
While the impacts of this ruling are not yet quite clear and Google has said it will appeal, here’s what you need to know now.
Why does the DOJ care about search engines?
Google is now a multinational tech behemoth under the parent company, Alphabet, that creates everything from phones to thermostats. But it started as a search engine in the mid-1990s. Over the years, its search dominance grew and by 2020, 90% of all queries in the U.S. went through Google, according to the ruling.
The company has exclusive default agreements with Apple and Mozilla for their web browsers; Samsung, Motorola and Sony for their Android devices; and with AT&T, Verizon and T-Mobile for devices sold through them.
So, if an American uses Firefox on their laptop or searches on their iPhone without having changed any settings, the queries are by default going through Google.
And it’s those agreements that are at the core of the case, Shane Greenstein, a professor at Harvard Business School, who has studied the commercialization of the internet, told The Atlanta Journal-Constitution.
The Justice Department doesn’t “particularly care about internet search per se,” Greenstein said. It’s the contracting practices the government cares about: paying a provider to not use anyone else as a default, he explained.
The DOJ alleged those practices were anticompetitive and thus violated the Sherman Antitrust Act.
What was Google’s argument?
In response to the government’s claims, Google said it makes a good product and that’s how it became dominant.
“They argued that they’re pretty good at what they do, users were going to use them anyway. These defaults were just a part of their regular way of doing business in trying to ensure a good product for users,” Greenstein said.
The court said Google is the “highest quality search engine, which has earned Google the trust of hundreds of millions of daily users,” but default distribution was a major unseen advantage over its rivals.
“This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available,” Google’s president of global affairs Kent Walker said in a statement.
Deven Desai, a professor of law and ethics at Georgia Tech Scheller College of Business, said the government used a new argument in alleging paying for placement is monopolistic. Desai was the academic research counsel at Google for two years from about 2009 to 2010.
“The logic seems to be, ‘Well, if you were already dominant, wouldn’t Apple have made you the main search engine no matter what?’ Which is interesting, but it’s a very novel argument, so it’s a bit early to see how that will play out,” Desai said.
What do companies like Apple and Samsung get out of these agreements?
In exchange for this exclusivity, Google pays the companies a portion of its search ad revenue. In 2022, Google’s revenue share payment just to Apple was $20 billion, according to the ruling.
Because most users stick with the default, Google gets billions of queries every day. It uses its vast number of users to collect data that improves search quality and woos advertisers. In 2021, Google made more than $146 billion in advertising revenue. By comparison, Microsoft’s Bing generated less than $12 billion in ad revenue in 2022, Mehta wrote.
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How is Georgia involved?
Georgia is one of the states that joined the DOJ suit in October 2020. The state joined the lawsuit to “maintain a fair and free market,” Attorney General Chris Carr said in a statement at the time.
“We will continue to advocate for the interests of our state and fellow Georgians as this litigation continues,” Kara Murray, Carr’s spokesperson, wrote in an email after the court’s decision.
Is it illegal to be a monopoly in the U.S.?
Not exactly, Harvard’s Greenstein said. If that status is earned by making a better product that’s fine, but what a company does once it has a monopoly on a market is what matters. And that’s what is at the heart of both Google and the government’s arguments.
“Antitrust laws require firms who achieve that status to take on additional responsibility for the competitiveness of the market and not to interfere with the ability of others to compete,” he said.
If this opinion stands, how could it impact consumers?
Mehta has not yet ruled on what remedies Google needs to take and as the case winds its way through the courts, there will likely be no immediate impacts on consumers, but that could change.
Desai said it may mean people have to always reassess the default search engine.
“I’ll tell you with older folks like my dad, I do not envy the notion of trying to help him get his phone to look the way he wants,” Desai said.
But there are other questions about consumer preferences the ruling brings up, Desai said, like “if most consumers would rather have Google as the default, should that be the answer?”
Does this ruling even matter as artificial intelligence grows?
“An irony which sometimes happens in technology, is as the government finally makes the case, the industry itself has moved beyond,” Desai said.
Greenstein said the way we search right now through keywords typed in query boxes is unlikely to dominate 10 years from now because of AI.
Search in the future could become more conversational instead of keyword-based.
“You ask the search engine what you’re looking for, ‘I’d like a black dress, please. Could you show me some black dresses?’ It will show you one. You say, ‘Oh no, no, no, I’m not going to a funeral. Get rid of all the ones that look like they’re for a funeral.’ That’s a conversation and many people think that that’s the direction search is going,” he said.
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