Last Monday, a federal judge ruled that Google is an illegal monopoly. In his decision, Judge Amit Mehta determined that the company is “a monopolist” in the areas of both “general search services” and “general search text advertising”; that “it has acted as one to maintain its monopoly”; and that it has thus “violated Section 2 of the Sherman Act” of 1890.
Exactly what this will mean in practice has yet to be determined. Cheering the ruling, the CEO of Yelp averred that “a strong remedy is critical,” while a senior vice president at DuckDuckGo called for “a robust remedies trial.” If they get their wish, that “remedy” is most likely to come in the form of an order that prohibits Google from entering into exclusive contracts with manufacturers such as Apple, but it could also involve Google being forced to split off its Web browser (Chrome) or mobile operating system (Android) from the rest of its business.
Responding to the decision, Google argued that the market had been defined too narrowly in the case. By including only literal search engines, Google proposed, the Department of Justice had excluded other widely used search products such as Amazon, Expedia, and Instagram, and thereby artificially inflated Google’s power. This is a reasonable objection, but, ultimately, it seems less important to the public interest than the question of what problem the Department of Justice thinks it is trying to solve in the first place. It is true that, in the United States, Google pays billions of dollars to the makers of Web browsers and cellphones to have its search engine listed as the default option. It is also true that in Europe, where the EU forces users to affirmatively choose which search engine they would prefer to use, 90 percent choose Google of their own volition — almost exactly the same number as choose Google here in the U.S., where, incidentally, default options are typically easy to change. Which consumers, then, are being harmed? Much as the FTC’s Lina Khan may dislike it, that remains the question that matters.
At present, there is a debate about whether Google’s share of the market is diminishing or holding steady, with some analysts suggesting that Google is losing ground and others critiquing how the numbers showing that diminishment are collected. Irrespective, it seems likely that the status quo will change before too long whether or not the government gets involved. Why? Because, online, it usually does. In 2005, the social-media space was dominated by Friendster. By 2006, Friendster had been supplanted by the supposedly monopolistic MySpace (“some argue it may already be too late for competitors to dislodge MySpace,” fretted the Guardian in 2007, before warning that an unchecked NewsCorp-owned MySpace would “extend [Rupert] Murdoch’s influence in ways that would make his grip on satellite television seem parochial.”). By 2010, MySpace had been dwarfed by Facebook. At which point in this sequence ought the federal government to have intervened?
A similar thing happened with Web browsers. In 1996, 80 percent of internet users accessed the Web via Netscape. By 1998, however, the rise of Microsoft’s Internet Explorer alarmed the Clinton Department of Justice so much that it brought an antitrust case against Microsoft alleging that it was an illegal monopoly. In the end, that case — which was decided in the government’s favor in 2000, partially overturned in 2001, and then settled later that year — did little to alter the trajectory of the Web. In the two years after the settlement, Internet Explorer continued to grow and grow, until it enjoyed a 95 percent market share — up 57 percent from when the suit was filed. And then, all of a sudden, it didn’t. By 2010, Internet Explorer was down to just over 50 percent share, with Firefox at 31 percent and Google Chrome at 8 percent. By 2017, Internet Explorer’s share was 7 percent. Today, Internet Explorer no longer exists, and its replacement, Microsoft Edge, is the pick of around 5 percent of users. Antitrust enthusiasts often point to this as an example of salutary government intervention, but this is a classic post hoc ergo propter hoc error. It was innovation, not the federal government, that displaced Internet Explorer from its perch.
Eventually, innovation will do the same thing to Google. Technologically, the timing of the DOJ’s suit is peculiar, given that the search market is in greater flux today than it has been in two decades. Indeed, while the case before Judge Mehta was pending, Google supplemented its traditional search engine with a new chat-based AI product, Gemini, that is intended to replace Google search completely over time. The scale of the competition in the AI space is such that Google is guaranteed to have its work cut out if it wishes to maintain the position that it has reached with its traditional search engine, but, even if it manages to do so, the change that AI will bring to the market is likely to render whatever remedies are imposed by the court swiftly moot.
Despite its having been corporatized to an extent that was unforeseen by its pioneers, the internet remains a wild place where nothing of consequence is assured. The law, by contrast, is slow, stable, and, in this particular arena, routinely unable to keep up. We would recommend that the Department of Justice bear that in mind.