There are two definitions of the term monopoly in the Merriam Webster dictionary. The first is ‘complete ownership or control of the entire supply of goods or a service in a certain market.’ The second posits that a monopoly is a person or group having complete control over something. It is this premise that has landed publicly-traded tech-behemoth Google in hot water, both at home and abroad.
The U.S. Justice Department announced last week that it is pursuing an antitrust action against the company. At the heart of the complaint is that Google is behaving as a monopoly in the incredibly lucrative arena of search. Specifically, the DOJ action alleges that Google harmed competition and prevented rivals from gaining a meaningful audience. Eleven states, Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas, have joined the federal government’s suit.
According to CNN, the case alleges that Google pays billions of dollars a year to device manufacturers like Apple, LG, Motorola, and Samsung and browser developers like Mozilla and Opera to be their ‘default search engine,’ prohibiting Google’s competitors from gaining traction in the market. “Google effectively owns or controls search distribution channels accounting for roughly 80 percent of the general search queries in the United States,” the action states.
It goes on to call these tactics ‘anticompetitive.’ “As one of the wealthiest companies on the planet with a market value of $1 trillion, Google is the monopoly gatekeeper to the internet for billions of users and countless advertisers worldwide,” the DOJ complaint reads. “For years, Google has accounted for almost 90 percent of all search queries in the United States and has used anticompetitive tactics to maintain and extend its monopolies in search and search advertising.”
The following specific examples are provided in support of its lawsuit against Google:
- Entering into exclusivity agreements that forbid preinstallation of any competing search service.
- Entering into tying and other arrangements that force preinstallation of its search applications in prime locations on mobile devices and make them undeletable, regardless of consumer preference.
- Entering into long-term agreements with Apple that require Google to be the default – and de facto exclusive – general search engine on Apple’s popular Safari browser and other Apple search tools.
- Generally using monopoly profits to buy preferential treatment for its search engine on devices, web browsers, and other search access points, creating a continuous and self-reinforcing cycle of monopolization.
It is further alleged that “Google’s anticompetitive practices have had harmful effects on competition and consumers. Google has foreclosed any meaningful search competitor from gaining vital distribution and scale, eliminating competition for a majority of search queries in the United States. By restricting competition in search, Google’s conduct has harmed consumers by reducing the quality of search (including on dimensions such as privacy, data protection, and use of consumer data), lessening choice in search, and impeding innovation. By suppressing competition in advertising, Google has the power to charge advertisers more than it could in a competitive market and to reduce the quality of the services it provides them. Through filing the lawsuit, the Department seeks to stop Google’s anticompetitive conduct and restore competition for American consumers, advertisers, and all companies now reliant on the internet economy.”
The DOJ references previous actions against Microsoft and AT&T as cases that it has undertaken to protect consumer and ensure markets are operating effectively. “The antitrust laws protect our free market economy and forbid monopolists from engaging in anticompetitive practices,” the DOJ says. “They also empower the Department of Justice to bring cases like this one to remedy violations and restore competition, as it has done for over a century in notable cases involving monopolists over other critical industries undergirding the American economy like Standard Oil and the AT&T telephone monopoly. Decades ago the Department’s case against Microsoft recognized that the antitrust laws forbid anticompetitive agreements by high-technology monopolists to require preinstalled default status, to shut off distribution channels to rivals, and to make software undeletable. The Complaint alleges that Google is using similar agreements itself to maintain and extend its own dominance.”