Google Antitrust Lawsuit
William P. Barr (tweet, PDF):
This morning the Department of Justice, along with eleven states, filed a civil lawsuit against Google for unlawfully maintaining a monopoly in general search services and search advertising in violation of the U.S. antitrust laws.
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Over the course of the last 16 months, the Antitrust Division collected convincing evidence that Google no longer competes only on the merits but instead uses its monopoly power – and billions in monopoly profits – to lock up key pathways to search on mobile phones, browsers, and next generation devices, depriving rivals of distribution and scale. The end result is that no one can feasibly challenge Google’s dominance in search and search advertising.
This lack of competition harms users, advertisers, and small businesses in the form of fewer choices, reduced quality (including on metrics like privacy), higher advertising prices, and less innovation.
David McCabe, Cecilia Kang, and Daisuke Wakabayashi (Hacker News):
In a 57-page complaint, filed in the U.S. District Court in the District of Columbia, the agency accused Google of locking out competition in search by obtaining several exclusive business contracts and agreements. Google’s deals with Apple, mobile carriers and other handset makers to place its search engine as the default option for consumers accounted for most of its dominant market share in search, the agency said, a figure that it put at around 80 percent.
Today’s lawsuit by the Department of Justice is deeply flawed. People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives.
This lawsuit would do nothing to help consumers. To the contrary, it would artificially prop up lower-quality search alternatives, raise phone prices, and make it harder for people to get the search services they want to use.
DuckDuckGo (tweet):
So, Google, given that you’ve often said competition is one click away, and you’re aware a complicated process suppresses competition, why does it take fifteen+ clicks to make DuckDuckGo Search or any other alternative the default on Android devices?
Apparently being sued for antitrust is like graduating from college for tech companies.
Great excerpt in U.S. v. Google on how Google shares its monopoly profits with Apple. Google pays billions for exclusive pre-installation on Apple devices--payments that are as much as one-fifth of Apple’s annual net income.
To me it reveals how fragile their dominance is that they’d feel the need to pay apple billions for making them the default search engine on iPhones
The U.S. government said Apple Chief Executive Officer Tim Cook and Google CEO Sundar Pichai met in 2018 to discuss the deal. After that, an unidentified senior Apple employee wrote to a Google counterpart that “our vision is that we work as if we are one company.”
The DOJ also cited internal Google documents that call the Apple search deal a “significant revenue channel” for the search giant and one that, if lost, would result in a “Code Red” scenario. That’s because nearly half of Google search traffic in 2019 came from Apple products, according to the lawsuit.
It’s certainly not a good look when Google pays Apple $billions per year, they agree to “work as if we are one company”, and both Safari and Chrome kneecap the browser extension ad blocking API.
Unintended harm to smaller innovators from enforcement actions will be detrimental to the system as a whole, without any meaningful benefit to consumers — and is not how anyone will fix Big Tech.
It’s not obvious that end-users are hurt directly. Google provides, at the end of the day, a pretty awesome search service.
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The problem is (to steal a phrase from the Complaint) “monopoly rents from advertisers”. Search advertising is a context where you know exactly what the user is looking for, and it’s amazingly effective, and Google enjoys a monopoly, which means they can charge what the market will bear, and they do.
Previously:
- Google v. Oracle at Supreme Court
- House Report on Competition in Digital Markets
- Google Ad Numbers Don’t Add Up
- Big Tech’s Showdown With Congress
- Search Ads for Competing Products
- Chrome to Limit Ad Blocking Extensions
- Safari 12
- Apple/Google Hiring Lawsuit Finally Settled
Update (2020-11-07): Hartley Charlton:
The New York Times reports that Apple receives an estimated eight to 12 billion dollars per year in exchange for making Google the default search engine on its devices and services, including the iPhone and Siri. This is believed to be the single biggest payment Google makes to anyone, and it accounts for 14 to 21 percent of Apple’s annual profits.
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It’s not obvious that end-users are hurt directly. Google provides, at the end of the day, a pretty awesome search service.
It does, but how much more awesome could it be through competition?
Monopolies aren’t per se illegal, making this tricky. But there are absolutely chilling effects. Web devs by and large don’t even bother to check how well their websites ranks in other search engines. They’ll instead use tools like Google Search Console exclusively, thus helping perpetuate Google’s dominance.
Imagine if AltaVista had been that way. Google would’ve never stood a chance.
The funny thing is I don't find Google search anywhere near as good as it used to be.
I quite often give up with it clear the engine has no idea what I'm actually looking for - not sure if it's a perception thing, the selling-out to advertisers or the increase in data google has to map - but it used to feel 'smarter'.
The obvious issue with giant companies like Google is that it's hard to apply the established methods to limit the harm, both current and potential (that by all metrics seems to be way more impeding that what we see now).
Yes, competition is "one" click away. (in fact it's many many clicks, and the required knowledge that it all can be done). But danger comes from the risk, that even a good actor can grab all the power, destroy all alternatives and then become a really bad actor, and then, at that moment there will be no competition clicks away. We do not want that. On top of that there are many examples that when Google becomes the only player they act very badly for users.
Just the fact that they removed the slogan "don't be evil" is very telling.
The evil (that they become now) has to be stopped.
@Niall O'Mara:
You aren't alone. Google has become much worse at locating the most relevant search results in certain categories, or rather, much worse at weeding out useless spam and clickbait sites from actual sites with real content. This becomes most painfully obvious when searching for reviews. I think the most fundamental explanation is that they aren't assigning enough effort to keeping on top of sites trying to game the results. Because that doesn't pay them anything like assigning effort to spying on their users and monetizing the data.
And there's also a ton of low hanging fruit that they are neglecting, like noticing when the search term appears on every single page on a site as a sidebar link (but only a fraction of those pages are actually about the topic in question). Again, it seems clear to me they're not spending the effort on improving the user experience because that doesn't pay the way improving the advertiser experience does.
@Niall O'Mara:
You aren't alone. Google has become much worse at locating the most relevant search results in certain categories, or rather, much worse at weeding out useless spam and clickbait sites from actual sites with real content. This becomes most painfully obvious when searching for reviews. I think the most fundamental explanation is that they aren't assigning enough effort to keeping on top of sites trying to game the results. Because that doesn't pay them anything like assigning effort to spying on their users and monetizing the data.
And there's also a ton of low hanging fruit that they are neglecting, like noticing when the search term appears on every single page on a site as a sidebar link (but only a fraction of those pages are actually about the topic in question). Again, it seems clear to me they're not spending the effort on improving the user experience because that doesn't pay the way improving the advertiser experience does.
