Users choose Google because they like it, not because default agreements prevent them from switching to another search engine.
It's only the latest example of government using antitrust to protect some companies and punish others.
T he U.S. District Court for the District of Columbia ruled last Monday that Google violated antitrust law by paying to be the default search engine on browser providers. This case is arguably the most significant antitrust ruling against a large technology company since the Microsoft case at the turn of the century.
That said, the verdict is more nuanced than many press reports indicate. Judge Amit Mehta tossed a large portion of United States v. Google ahead of the trial. Google’s forthcoming appeal could take years to resolve, and the narrow nature of the ruling makes an extreme remedy such as a breakup highly unlikely.
Guilt under Section 2 of the Sherman Act requires antitrust enforcers to prove that a company a) has monopoly power in a relevant market, and b) maintains its monopoly power through anticompetitive conduct. On both counts, Mehta’s ruling falls short.
The government alleges that Google controls 90 percent of the “general search services” market. Nobody disputes that Google is a large and popular company. The court even concedes that Google “has not achieved market dominance by happenstance . . . [Google has] innovated consistently, and made shrewd business decisions.”
Zooming out reveals a more competitive search landscape than the government cooked up. Generation Z users are increasingly treating TikTok and YouTube as search engines, but both platforms are excluded from the DOJ’s definition of “general search services.” Amazon.com is not part of the market, either, despite the fact that 57 percent of Americans start their online-shopping searches there. Artificial-intelligence chatbots are excluded from the DOJ’s market because they did not exist when the DOJ filed the case.
The court found that Google’s default-search agreements with browser providers such as Apple and Mozilla were instrumental in maintaining Google’s monopoly power over search. To be the default search engine on Apple’s Safari browser, Google pays Apple a percentage of Safari’s search revenue, reportedly $20 billion per year. If a Safari user does not want to use Google, he can switch default search engines by going to device settings and picking from Yahoo, Bing, DuckDuckGo, or Ecosia.
We know from the experience of the European Union that default-search agreements don’t meaningfully influence consumer behavior. In 2018, the EU ordered Google to offer a “choice screen” on Android devices that allowed users to pick their default search provider out of the box. Google has maintained a 92 percent European market share before and after the choice screen went into effect in 2021. Microsoft-owned Bing, Google’s biggest competitor, saw its market share increase from 3.34 percent to 3.46 percent.
This evidence suggests that users choose Google because they like it, not because default agreements prevent them from switching to another search engine. As antitrust expert Geoffrey Manne has written, “The fact that Google has an 80 percent market share even on Windows devices, where Bing is the default search engine, demonstrates that consumers go out of their way to use Google because they believe it is the best option.”
Mehta will consider remedies after a September hearing, but Google’s rent-seeking rivals are already sharpening their knives in the interim. DuckDuckGo wants to prevent Google from entering into default-search deals, force Google to share data with its competitors, and make browser and phone providers implement European-style choice screens that repeatedly ask users to pick a default browser.
By the time the final verdict is rendered, consumers will likely have moved on, calling to mind the government’s disastrous antitrust pursuit of IBM in the 1960s. AI chatbots are the next frontier of search and information gathering. The Biden-Harris administration has launched antitrust probes into the nascent AI market, suggesting that this exercise has been more about government control of emerging technologies than anything else.
In a free market, consumers pick economic winners and losers, with antitrust law serving as a tool to maximize consumer welfare. The Google decision is part of a long pattern of government abuse of antitrust law to protect some firms and punish others — consumers be damned.