Googling Google’s Monopoly: A Landmark Antitrust Suit

Google has become so popular that it is now a verb, holding a place in colloquial conversation no other search engine has. In 2017, Google controlled about eighty percent of the search engine market, and by 2020, it controlled ninety percent. (Forbes Agency Council, Forbes); (Daisuke Wakabayashi, The New York Times). Bing is second, controlling only six percent of the market. United States v. Google, LLC, 747 F. Supp. 3d 1, 38 (D.D.C. 2024). This colossal market control invoked questions of monopolistic behavior and antitrust law violations, ultimately leading to a lawsuit filed in 2020 by the Department of Justice (“DOJ”) and several states, including Colorado. (DOJ, Office of Public Affairs). In analyzing whether Google violated Section 2 of the Sherman Act by monopolizing key digital advertising technologies, a district court concluded in the affirmative on August 5, 2024, in a 188-page opinion, stating that Google was monopolistic and violated the Sherman Act. (DOJ, Office of Public Affairs); Google, 747 F. Supp. 3d at 32. While the court held that Google violated the Act, it failed to impose harsh remedies, such as isolating Google’s search engine from its advertising business. (Reuters); (Edward Longe, The James Madison Institute). The DOJ is currently appealing the court’s decision. (Reuters). This post explores how Google’s competitive strategy led to the case prior to appeal and further, focuses on how the emergence of new technology impacts Google’s future.

Google was developed in the mid-nineties by founders who sought to revolutionize the internet’s search capabilities, web access, and user experience. (Forbes Agency Council, Forbes). A Google search is simple for users, but the actual process is complex. Essentially, Google is a general search engine (“GSE”) that shows users particular results according to the search. Google, 747 F. Supp. 3d at 38. The GSE “crawls” the web for websites, places the websites into an index, and retrieves relevant websites from the index once the user runs a search. Id. at 38–39. A search may be commercial or non-commercial, and as part of a commercial search, advertisers may purchase a premium spot for their advertisements and websites to pop-up. Id. at 40–41, 62.

The crux of the case lies in Google’s power over search services and advertising markets. Id. at 107, 124. Section 2 of the Sherman Act illegalizes monopolies and requires that the plaintiff prove that (1) the company has monopolistic power, meaning, “the power to control prices or exclude competition,” in the specific market, and (2) the willful procurement or maintenance of that power as distinguished from the company’s superior product or strategy. Id. at 106 (quoting United States v. E. I. du Pont de Nemours & Co., 351 U.S. 377, 391 (1956)). The DOJ argued that Google held monopoly power in general search services and multiple advertising markets, pointing to exclusive default browser agreements with companies like Apple that reinforced the monopoly by preventing market entry and harming competition and consumer choice. Id. at 107, 124, 142. For example, in the past fifteen years, there have only been two GSE’s that have entered the market: DuckDuckGo and Neeva. Id. at 144. DuckDuckGo has about 2.5% of the market, and Neeva is no longer in business. Id.

Turning to the DOJ’s first argument, the court relied on indirect evidence, reasoning that Google’s dominant market share, combined with significant barriers to entry, supported a finding of monopoly power in the general search services market. Id. at 117, 118. Google argued that the entry barriers were not actually that high, because new market participants, like Artificial Intelligence (AI) entered the market, and Google entered when Yahoo was the dominant participant. Id. at 122. However, the court was unpersuaded by these arguments. Id.

Regarding the DOJ’s second argument, the court analyzed three overlapping markets that the DOJ alleged Google monopolized: search advertising, general search text advertising, and general search advertising. Id. at 124. A search advertising market includes all advertisements displayed in response to a search, and the court found that Google did not monopolize it and therefore did not violate Section 2 of the Sherman Act for general advertising. Id. at 124–25, 136. A general search text advertisement is a predominately text-based advertisement for goods or services appearing only on a search engine response page. Id. at 136. Google argued that because ad prices are set through an auction rather than by Google directly, it does not influence how much an entity pays for an ad or the ability to enter the market. Id. at 138–39. After considering Google’s argument and weighing the evidence, the court found that Google monopolized the general search text advertisement market. Id. at 139. General search advertising is comprised of all ads that appear on the GSE result page and consists of all types of ads, such as text, image, product, etc. Id. The court neither found that Google had a monopoly, nor did not have a monopoly over this market, because it did recognize the existence of this market. Id. at 142.

Finally, the court looked at the DOJ’s third argument pertaining to the exclusive dealings and distribution contracts. Id. The court stated that, “Google has no true competitor,” and because of this, its partners cannot afford to contract with another GSE. Id. at 144–45. Google paid billions to become the default GSE through all Safari and Firefox access points on Apple products. Id. at 147. Every search using Safari or Firefox on an Apple device runs through Google. See Id. However, to violate Section 2, the exclusionary practices must have an “anticompetitive effect,” damaging the competitive process and consequently the users. Id. at 152. The court concluded that Google was liable under Section 2 for maintaining its monopoly through exclusive distribution agreements. Id. at177. Despite a finding that Google monopolized some markets, the court did not force Google to terminate its default browser agreement with Apple or sell its Chrome search engine because generative AI entrants have entered the search market and compete with Google. (Reuters).

The court did not rely on the emergence of new technologies, like AI, to justify Google’s arguments. However, new technology did play a role in the opinion and will likely continue to play a role as it continues to advance. Google, 747 F. Supp. 3d at 122. When Google argued that AI had entered the search engine market, the court emphasized that AI had not yet sufficiently eroded the high barriers to entry. Id. New technology will only lower entry barriers if it can foreseeably change the market, and AI has not changed the market yet because it relies on the same search processes, like crawling and indexing. Id. at 123. In addition to AI, other emerging technologies threaten Google’s dominance. (Forbes Agency Council, Forbes). For example, Amazon’s voice-buy technology allows consumers to easily buy products, surpassing Google’s online shopping dominance. Id. Apple also offers ad blocking, which could hinder Google’s competitive edge in the search and advertising markets. Id. Finally, social media platforms have essentially become search engines in their own right and have expanded features to include direct storefront buying, like the TikTok Shop. Id.

Google is the current dominant market controller, however, with the emergence of new technologies and innovations, it must adapt to maintain its dominance. The DOJ’s pending appeal questions this dominance, and other market participants and new entrants should work to emphasize their distinguished capabilities. Perhaps, on appeal, Google will be forced to surrender its monopoly and users will surrender “googling.”