Google Monopoly: The Search for a Solution

Google's search monopoly has recently come under heavy criticism as an antitrust ruling explores its market dominance. On the 5th August, it was deemed that Google violated antitrust law in the states by illegally maintaining a monopoly in internet search. One way this has been enacted is through paying more than $10 billion a year to Apple, Samsung and others to be pre-installed as the default search engine across platforms, enabling them unparalleled access to user data and advertising revenue. With over 90% of all internet searches going through Google, the revenue from their search engine business is significant: $175 billion in 2023, over 60% of their annual revenue.

This market dominance has prevented rivals from meaningfully competing, due to high barriers of entry, as well as enabling Google to raise ad prices beyond what would be possible in a free market. For example, it was reported in September 2023 that Google had been adjusting advertising auctions to meet revenue targets, with some advertisers having their CPCs inflated by up to 10% year on year, whilst other retail advertisers have seen CPCs increase up to 50% in the last 5 years. The monopoly also effectively stifles innovation because although Google is a highly innovative company, there are always fresh ideas that arise from smaller companies that currently wouldn’t get a look in.

The trial has reconvened, with one potential solution being that Google must abandon deals that make Chrome the default browser. This solution could involve a choice screen upon setting up a device, where consumers choose their default browser. Whilst this solution could benefit competitors such as Microsoft, SearchGPT and smaller search engines such as DuckDuckGo, user behaviour research suggests consumers will still default to Google. As said by one of Google’s lawyers, “Google is winning because it’s better”.  Thanks to years of being the dominant search engine, their accumulation of user data is a competitive advantage that has led to improved search engine quality, meaning users want to use Google as it offers the best experience. So while these rulings may create small openings for competitors for other companies to explore, in the short term Google’s market share will be most likely unaffected due to its total market dominance. 

Another potential outcome of the trial is forced data sharing with rivals, in a two-pronged approach to firstly alleviate some of this competitive advantage that Google has built up over the years. Giving other search engines access to Google’s index could fuel innovation as competitors seek different ways to fetch, rank, and present all the information within the index. The second measure would be more preventative, such that if Google were forced to share their Artificial Intelligence technology and associated training data, it would be a step forward in preventing its search monopoly from carrying forward into newer technologies. 

Other outcomes may be a forced breakoff of parts of Google and potential fines. Whatever happens, it will be an interesting case to follow, with the result having significant implications as other tech giants (including Apple, Amazon and Meta) all face their own antitrust cases.