#173 Now That The Judge Has Ruled "Google As A Monopoly", What Happens Next?
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Now That The Judge Has Ruled "Google As A Monopoly", What Happens Next?
Last week, in a landmark decision, U.S. District Judge Amit Mehta declared that "Google is a monopolist" and "has acted as one." This August 5th ruling, which concludes nearly four years of trial proceedings, could have significant implications for the multi-billion-dollar search market and the broader technology sector.
Google currently dominates the search market, handling approximately 90% of search queries in the U.S., including 95% on mobile devices. This dominance underpins the world’s largest advertising business.
While users appreciate Google for its search capabilities, the company’s prevalence is also due to its status as the default search engine on many phones and browsers. Google has maintained this position by paying a staggering $26 billion to phone manufacturers and browser developers in 2021 alone. No wonder, you don’t hear or see any other search engine. And there are plenty out there if you care to look. For eg, I use Duck Duck Go (yeah, funny name) and You.com. Both are excellent and they have better privacy controls. Look them up. It feels different when you use it for the first time, but over time, you start liking the search results - they seem to be more genuine, as compared to the “click-baiting” results and sponsored links by Google.
Anyways, back to the main topic
The Department of Justice (DOJ) and Google’s rivals have long argued that these deals (remember the $26 billion?) give the company an unfair advantage, making it difficult for competitors to attract users. This monopoly is further entrenched as Google’s algorithms continuously improve with billions of search queries daily. Judge Mehta’s ruling supports these claims, stating that such agreements violate antitrust laws.
This case marks a significant victory for U.S. regulators in their ongoing battle against Big Tech. The DOJ, which has also taken legal action against Apple, is preparing for a second case against Google focused on its advertising business.
Additionally, the Federal Trade Commission (FTC) has filed antitrust claims against Meta and Amazon (its raining antitrusts these days!). Many people in the industry are calling this ruling the most consequential in tech regulation since Microsoft was found guilty of monopolistic practices in 2001.
Despite the ruling, the market reaction was muted, with Alphabet, Google’s parent company, seeing only a 2% drop in its stock price.
Investors are likely holding off on drawing conclusions for two reasons: Google’s inevitable appeal could drag on for years, and the court has yet to decide on specific remedies. The next phase of the trial, expected to conclude no earlier than next year, will address these potential remedies.
Observers are skeptical that the court will impose a drastic measure like separating Google’s Android operating system from the rest of the company. A more likely outcome could involve forcing Google to share its search data with rivals to help them improve their own algorithms. While similar data-sharing requirements exist in the European Union under the Digital Markets Act of 2022, implementing such measures in the U.S. would be more complicated due to legal challenges and privacy concerns. But another problem with this approach is if they are forced to share the data with rivals, which means your data now is going to be available with more search engines! Basically, you can’t escape the Matrix
Another plausible remedy could be banning Google from paying to be the default search engine on devices like the iPhone. Instead, consumers might be given a choice of search engines. This approach has already been implemented in the EU, where Google was ordered in 2018 to offer Android users a choice of default search engines. Despite this, Google’s market share in the EU remained stable through 2021, indicating that consumers often stick with familiar brands.
If such payments are to be banned, then Apple would be the immediate financial loser. The trial revealed that Google pays Apple around $20 billion annually to be the default search engine on iPhones—a sum equivalent to 18% of Apple’s operating profit last year. Losing this revenue stream would be a significant blow to Apple, though many consumers would likely continue using Google as their search engine, at least initially. Google wins again.
However, the long-term impact on Google could be more severe. Judge Mehta pointed out that Apple has had little incentive to develop its own search engine, as it currently profits handsomely from its arrangement with Google.
If this cozy relationship were disrupted, Apple might be motivated to enter the search market, potentially capturing a share of the lucrative advertising revenue that comes with it. Apple has already begun building an ad business around its app store, and media analysts anticipate ads appearing on Apple TV+ soon. Expanding into search would be a natural next step.
The ruling could also encourage consumers to explore emerging search engine alternatives, particularly those powered by AI. For example, Perplexity, an AI-driven search engine, claims to deliver better results than Google (I have not tried it yet)
On July 25th, OpenAI launched SearchGPT, its own AI-powered search tool. Meanwhile, Apple is investing heavily in AI-based innovations. Siri, the company’s voice assistant, is set to receive an AI overhaul to help users with tasks that previously required web searches. Such advancements could eventually disrupt Google’s dominance in ways that regulators alone could not achieve.
So yeah, long road ahead before anything constructive or disruptive comes out of it. Nevertheless, the landmark ruling shows the the DoJ is not sitting with its eyes closed and is thinking hard about the choices that users should have when it comes to search engine. After all, everything that you think today to ask your neighbour/doctor/colleague - you most likely are to Google first.
Google will fight it tooth and nail, so will Apple. $20 billion is no lose change even for Apple. They will figure out another way to keep you Googling. But if you are really serious about using a better search engine, then try these
There are many more out there, which I have not used yet. I have stuck to these two over the years and it works for me.