In 2020, the federal government and several U.S. states sued Google for violating the “antitrust” laws. The lawsuit alleged that Google “is a monopoly gatekeeper for the internet.” One of the world’s wealthiest companies having a “market value of $1 trillion and annual revenue exceeding $160 billion,” Google rules by using “anticompetitive tactics” to establish monopolies for “general search services, search advertising, and general search text advertising.”

After nearly four years of litigation including a nine-week trial, a federal judge decided Google had indeed maintained “its monopoly in two product markets in the United States — general search services and general text advertising — through its exclusive distribution agreements.” That August 5, 2024, ruling (the “Decision”) adjudicated the monopoly law questions. A later hearing will address what “remedies” the court will order to end the “anticompetitive” aspects of Google’s huge market share and exclusive agreement strategies.

The judge’s 286-page Decision comprehensively describes how the multi-billion-dollar search engine industry works. Want to know the hows and whys of Google, Yahoo, DuckDuckGo, and Bing? Read pages 6–133 of the Decision.

From a lawyer’s standpoint, the Decision is a model of excellent writing and clear legal reasoning. Whether the Decision is “correct,” and whether antitrust laws serve a valid purpose, might be debatable. But we’ll accept and quote here the Decision’s stated facts.

Capturing Curious Minds

Underlying the whole controversy is: Did Google find a hugely profitable way to control the thoughts and preferences of Internet users? By that means, did Google create an empire no competitor could seriously challenge?

Simply stated, Google realized facts about the human mind. When Internet users find a search method they like and works well, they keep using it. And, as a rule, users will choose the first-offered Internet search tool if it is easy and fast. Testimony reported in the Decision confirms:

[T]he vast majority of individual searches, or queries, are carried out [by] habit, because search is a high frequency activity done on a familiar device that provides an instant response. … Habits develop very strongly in those situations of high repetition and immediate feedback. When a consumer encounters their devices for the first time and they start searching, they start searching with the default search engine, which for many of them is the case. … If that search engine that is the default generates adequate experiences, the consumer will get habitized to that.

(Decision, p. 26 (smoothed).)

Billions for Default First Place Position

To capitalize upon the users’ behavior, Google has spent untold billions of dollars to make sure the Google search engine is the default search tool on as many systems as possible, especially on cell phones. Internet users typically get the Google search engine by default and use it. Their computer and cell phone environments make it difficult – because the method is not obvious and demands many keystrokes – to switch to a different search engine.

The Decision explains that users not yet hooked on Google and who “try to change the default will get frustrated and stop the process if there is choice friction.” The “choice friction” refers to the large or small barriers making change difficult. The “more choice friction it takes to change the defaults, the stickier the defaults are.”

Users might think of switching to a different browser if the default doesn’t work well, but if they are satisfied, they mostly won’t look to change anyway. By becoming the world’s default browser and providing a very satisfactory product, Google cemented itself into prominence. The second most popular browser is Microsoft’s Bing, which in 2021 carried about 5% of the total Internet searches compared to Google’s 84%. Users just weren’t finding a compelling reason to switch away from Google.

Exclusivity Contracts Deliver Golden Win-Wins

If you have a Samsung Galaxy S10 cell phone like mine with the pre-installed Android system, you can right now see how Google deployed its basic strategy. At the top of the screen is a search bar — the default Google search bar. It is practically impossible to get rid of it. On the main screen, top right, you’ll also see Google’s Chrome search engine.

The Decision explains how Google gets this product placement advantage:

Google pays [the computer and cell phone manufacturers] huge sums to secure these preloaded defaults. Usually, the amount is calculated as a percentage of the advertising revenue that Google generates from queries run through the default search access points. This is known as “revenue share.” In 2021, those payments totaled more than $26 billion, … nearly four times more than all of Google’s other search-specific costs combined. In exchange for revenue share, Google not only receives default placement at the key search access points, but its partners also agree not to preload any other general search engine on the device. Thus, most devices in the United States come preloaded exclusively with Google.

(Decision, p. 3 (emphasis added).)

One source of Google dominance is the two kinds of contracts that lock the makers of cell phones and other web browsers into a huge win–win for Google. One is the Mobile Application Distribution Agreements (MADAs) made with all Android makers. The MADAs allow the makers to use Google’s proprietary mobile apps without cost, but the makers must preload certain Google apps prominently (such as Play Store).

The other is the Revenue Share Agreements (RSAs). The computer and cell phone providers (“partners”) can choose how exclusively they will tie their devices to Google’s apps and services. The more exclusive a partner’s individual devices are to Google, the more search engine revenue Google shares with the partner.

Awesome amounts of money are involved, as the Decision reveals:

Google has entered into search distribution contracts with two major browser developers (Apple and Mozilla); all major OEMs of Android devices (Samsung, Motorola, and Sony); and the major wireless carriers (AT&T, Verizon, and T-Mobile) in the United States. In 2021, Google paid out a total of $26.3 billion in revenue share under these contracts[.]

(Decision, p. 101.)

Google has achieved a near monopoly in its search engine markets. Due to its market preeminence, Google reaps huge revenues from its methods of selling advertising. Especially powerful tools are Google’s sophisticated algorithms for learning what the overall markets for products and services are offering and at what prices — and learning exactly what every Google user has searched for, read, shown interest in, and possibly purchased over the previous 18 months. Most of us already know: Google adeptly provides you ads and links based upon what Google already knows about you.

Is Competition Even Feasible?

So, could another company be formed to challenge Google’s dominance? As of the 2024 decision, the court’s Decision answered that question with No.

To build the hardware-software behemoth needed to challenge Google would conservatively cost in the range of $20 billion. Operating the advertising side of the business would run upwards of another $11 billion annually. For example: Microsoft invested nearly $100 billion to create and operate Bing over a period of 10 years — and Bing still runs far behind Google in numbers of users, advertisers, and revenues.

Examining all these technical and economic aspects and many more, the Decision found Google is a monopoly under federal law, and operates unlawfully because it effectively excludes competitors at the same time that its prices and services are not responsive to consumer market demands.

Non-Commercial Knowledge Control

Recall that Google has a monopoly not in selling toothpaste, tissues or trikes but in providing access to the world’s news, facts, information, discussion, debates, etc. Google searches typically are either “commercial” or “noncommercial,” and Google identifies and treats them differently. Google devotes a whole segment of its operations to negotiating access to selected sources of noncommercial information. Google also delivers Search Engine Response Pages (SERPs) to users containing the information that its algorithms decided was responsive to the search query and should be presented first, early, or at all.

For those of us suspicious of Google’s selective choices about what information to deliver, the Decision explains enough to confirm that Google is designed to access someone’s preferred sources and to deliver someone’s preferred information — and that someone may not be you.

The Decision reports that Google’s parent company, Alphabet, is worth about $2 trillion, mostly due to Google’s sustained triumph in its market. Nobody can dislodge Google any time soon. The federal court’s upcoming directives to remedy the Google monopoly could change the picture. Unless upended by the court or dislodged by new technology, Google will remain for now a nearly unstoppable force not only for commercial operations but for control over what the world’s population sees, hears, learns, and thinks is true.