Google's Search Dominance
This article is published in collaboration with Statista
by Felix Richter
Almost three years after the U.S. Department of Justice sued Google for anticompetitive behavior in the search market, the most significant antitrust trial against a tech company since the United States against Microsoft in 1998 is set to begin on Tuesday. In October 2020, the DOJ had filed a lawsuit against Google for “unlawfully maintaining a monopoly in general search services and search advertising in violation of the U.S. antitrust laws.” The suit, which the DOJ describes as “a monumental case for the Department of Justice and, more importantly, for the American consumer” in its official statement, accuses Google of being “a monopoly gatekeeper for the internet” engaging in “anticompetitive tactics to maintain and extend its monopolies”.
At the center of the case is Google’s well-known practice of paying large amounts of money to device manufacturers, wireless carriers and browser developers to make sure Google is the default search engine on devices and within browsers. According to the DOJ’s findings, such agreements cover almost 60 percent of all search queries in the United States, with a large part of the remaining share funneled through Google’s own properties (e.g. its Chrome browser and Google devices). As a result, Google has become “so dominant that “Google” is not only a noun to identify a company and the Google search engine but also a verb that means to search the internet,” the DOJ writes in its complaint.
As the following chart shows, Google’s dominance over the U.S. search market can in fact be described as monopolistic. According to Statcounter, a company tracking more than 5 billion pageviews across more than 1.5 million websites per month, Google’s market share in the U.S. currently amounts to 79 percent on desktop devices and more than 95 percent on mobile devices (excluding tablets). A dominant market position alone is not against the law, however, as the case's judge Amit P. Mehta pointed out in a statement last month. "A dominant firm like Google does not violate the law merely because it occupies a monopoly market position," Judge Mehta wrote. " It must act in a manner that produces anticompetitive effects in the defined markets. That is, a company with monopoly power acts unlawfully only when its conduct stifles competition."
This is precisely Google's argument, which maintains the position that its dominant market position is a result of the quality of its services and consumer preferences rather than of anticompetitive behavior. In a blog post published last week, the company dismisses the lawsuit as “deeply flawed”, stating that “people don't use Google because they have to - they use it because they want to." "Success doesn’t come from preloading," Google says with respect to the allegations at the heart of the case, "it comes from innovation and offering helpful products that people want to use."
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