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For representational purposes. | Photo Credit: Reuters
the story So Far: Google, the leading American technology company known for its popular search engine, has lost a court case filed against it by the US Department of Justice in 2020 The company was accused of running an illegal monopolyA US district judge ruled earlier this month that the company abused its dominant market position to prevent competitors from freely offering their services in the market.
Why was Google accused?
Most new phones, laptops and other electronic devices in the market have Google set as the default search engine. The company pays a portion of its advertising revenue every year to device manufacturers like Apple, Samsung, etc. to have Google appear as the default search engine on their devices. In fact, Google paid Apple $20 billion in 2022 to have Google appear as the default search on its default browser Safari. Google has also paid web browser providers like Mozilla to appear as the default search engine on their browsers. This approach is beneficial to Google and unfair to other search engine providers because users may prefer to use the default search engine on their new device rather than make the effort required to try a better search engine.
Is Google really a monopoly?
The sheer size of Google, which is the leading search engine in the world with over 90% market share, has led many to argue that the company is a monopoly that abuses its dominant market power. Such a dominant position is believed to allow Google to dictate terms when dealing with those who wish to do business with it or even use its services. Some also argue that a large technology company such as Google will have far more influence over regulators and the law in general than smaller companies.
Read this also | Google ‘monopoly’ rivalry case: A timeline
However, others, including the judge who ruled against Google in this case, have argued that large market share alone does not make a company a harmful or illegal monopoly. They said that even though it may be very difficult to compete with a giant like Google, because the company naturally enjoys certain advantages as a market leader, the fact is that there is still no legal barrier against the entry into the market of competitors wishing to compete against Google by offering a better product. Furthermore, there is also no guarantee that Google’s absolute dominance in the search engine market will last forever. Microsoft’s significant dominance in the search engine market ended with the advent of Google. They argue that the same could happen to Google if a competitor offers a better product. It is also believed that the threat of entry of competitors with better products will keep Google cautious and limit the extent to which the company abuses its market power.
Google supporters also say there is nothing wrong with Google sharing advertising revenue with device manufacturers such as Apple and Samsung. In their view, the practice of paying to appear as the default search engine is no different from a company buying prime real estate space to gain better visibility. Moreover, Google’s competitors are also free to pay for such privileges. Finally, Google itself has argued that its position as a market leader is not due solely to its ability to pay to be the default search engine, but to the superiority of its service.
what lies ahead?
Court proceedings on the action against Google are expected to begin next month. The court could order Google to stop sharing advertising revenue with companies like Apple to be displayed as the default search engine on their devices. It could also mandate that users should be given the option to choose the default search engine in their browser. Another possible action by the court could be to force Google to share the information it has about user searches, which is believed to be a major reason for Google’s superior performance, helping it overtake competitors. And while the chances are very low, the court could also order that Google be split into multiple companies so that there is no single dominant player in the market. Finally, Google could decide to appeal the court’s order.
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