Credit: Wall Street Journal https://images.wsj.net/im-72352259/?size=1&width=2500
Update in DOJ’s case against Google on search monopoly
The U.S. Department of Justice has been trying to poke holes in Google’s digital monopoly for several years now. The DOJ brought a monumental antitrust suit against Google in 2020 for monopolizing search and search advertising. The federal district court reviewed several key issues that raised concerns about Google’s monopolistic practices including exclusive agreements, bundling services, predatory pricing, data practices, and search result manipulation. These behaviors, taken as a whole, created the foundation for the DOJ’s argument that Google operates as an illegal monopoly, significantly limiting competition and innovation in the digital marketplace.
In August 2024, following a ten-week trial, Judge Amit Mehta issued a highly anticipated decision in the DOJ’s antitrust case. To Google’s detriment, Judge Mehta found that Google violated Section 2 of the Sherman Act for its illegal monopoly and its dominance in the search market. As the court considers potential remedies, the case remains closely watched. The court’s anticipated decision has significant implications for antitrust enforcement in the technology sector.
In its latest October 8th filing to the D.C. Circuit Court in the landmark antitrust case against Google, the DOJ recommended a range of remedies, including a plan to disband the tech giant and its monopoly over the digital marketplace. Specifically, the DOJ requested to prevent “Google from using Chrome, Play, and Android.” The DOJ’s case against Google, regardless of its final disposition, has captured the attention of many in the last few years, especially the potential of court-ordered divestiture of key assets.
Google is embattled in several other headline legal struggles. In a separate case brought by Epic Games, the judge has ruled that Google must open up the Google Play Store, its lucrative app store, to greater competition by making Android apps available from other sources. Meanwhile, Google is also the target of another case brought by the DOJ that seeks to break up its web advertising business. Google asserted that its dominant market share is the mere result of a superior search engine. However, the DOJ argued that Google’s dominant market share is the result of anticompetitive deals between Google and Apple to maintain prime placement of Google’s search engine.
The DOJ’s long fight to declare Google’s search business as an unlawful monopoly has only been half the battle. Google now faces a greater fight as the DOJ proposes how it believes Google’s dominance should be tempered. Specifically, the DOJ is asking Judge Mehta to consider behavioral and structural remedies as they relate to Google’s anticompetitive power in the search engine market.
Proposed behavioral and structural remedies
The latest filing by the DOJ outlines the government’s proposed remedy framework that targets four categories of harm identified in the earlier ruling: (1) search distribution and revenue sharing; (2) generation and display of search results; (3) advertising scale and monetization; and (4) accumulation and use of data. To rectify the harm, the DOJ proposes remedies such as contract requirements and prohibition, non-discrimination product requirements, data and interoperability requirements, and most alarmingly, structural requirements.
One pathway to justice lies in court-ordered remedies that both address past harm as a result of the illegal monopoly and prevent or constrain the continuing adverse effects of a monopoly going forward. Alternatively, appropriate remedies can be guided by several objectives: (1) remedies must completely preserve or restore competition; (2) remedies should constitute the least restrictive means to effectively eliminate competition concerns in the case; (3) remedies should only address the competition concerns and not be used for other non-competition purposes such as industrial planning; and (4) remedies must be implementable and enforceable within a short time and at a practical cost. The court has two types of tools to achieve these objectives: behavioral remedies and structural remedies.
Behavioral remedies prohibit behavior that the government deems as anticompetitive, like tying arrangements, predatory pricing, and collusive agreements to exclude competitors. These collusive agreements are the central issue in the present case where an exclusive agreement was created between Google and Apple to use Google as the default search engine on Apple devices. Behavioral remedies are much more flexible because they can be tailored specifically to innovative business strategies. However, flexibility comes with high enforcement costs because ongoing intervention in the market is necessary to prevent creative interpretation or circumvention of the court-imposed order.
*The views expressed in this article do not represent the views of Santa Clara University.
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