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What is the Antitrust Case Against Google?
Google is facing the biggest U.S. antitrust trial in the past quarter-century, which centers on deals the company struck with carriers, Apple, and other device makers to make Google the default search engine. In testimony, Microsoft CEO Satya Nadella said unfair tactics used by Google led to its dominance as a search engine, tactics that in turn have thwarted Microsoft Bing. In an ironic reversal, Microsoft faced accusations in the 1990s that Windows software walled off applications made by other tech companies. The constraints imposed by the government’s antitrust case against Microsoft helped Google corner the market on Internet search.
Google CEO Sundar Pichai Defends Deal With Apple, But Admits It’s a Big Part of Its Dominance
Google maintains that the company’s search dominance is because it is the best; not because it behaved illegally to gain and preserve a monopoly. Pichai testified that by making Google’s search engine a seamless part of the Chrome browser, and by offering users a minimalist design that created more room for search results and web content within a browser window, Google believed it would drive more search usage. A study from 2010 confirmed that users who switched from Microsoft’s Internet Explorer performed 48% more Google searches. And despite the fact that users can easily switch search providers, Pichai also confirmed that the $26.3 billion it paid to smartphone makers and telecom companies in 2021, including $10 billion a year paid to Apple alone, is a big part of the difference.
Statistics vary by study methodologies, but Google has at least 90% of Internet searches globally, with YouTube accounting for 3%, and Bing third with 2.7%. Yahoo and Baidu each have less than a 1% share of total searches. In the US, Bing has a 7% share of searches, with Yahoo at 2.65%, and 2% for DuckDuckGo.
How Does Google Make So Much Money from Searches?
Much of the testimony phase of the trial is closed to the public to avoid revealing company secrets, but a few have slipped out. One such revelation is that Google alters searches behind the scenes to a query that is more likely to result in a keyword-triggered, paid ad. It’s these paid ads that account for nearly 80% of Google’s revenue – $177 billion in 2022.
What Happens if Google Looses the Antitrust Case?
If government regulators win the case against Google, it could unleash drastic changes that will undermine the dominance of its search engine that defines the Internet for billions of people.
- It might require smartphone manufacturers to offer choices for search engines during the startup process, as is being done in Europe now. (Most people still choose Google.)
- It could prohibit payments to Apple, Verizon, and others for the default search engine privilege. This could, in turn, raise prices on iPhones and smartphone service plans.
- It will impact how and where advertisers place their ads, and which tools they use to manage them. It could definitely change the 28% of all digital advertising revenue Google collects.
- While unlikely, it could also result in the breakup of Google.