Is Google a Monopolist?

We recently looked at the enactment of new legislation in the EU aiming to bring greater accountability to the activities of big tech companies. Now the U.S. Justice Department has embarked on a similar path with two lawsuits alleging that Google is engaging in anti-competitive conduct. One lawsuit addresses Google's alleged monopoly of digital advertising and the other targets its search engine technology. Both actions revolve around the same central question: Is Google a monopoly? It’s a nuanced issue that hinges on the answers to several difficult questions, such as:

• Does Google dominate digital advertising and search because it’s a monopoly, or because its services are better than competitors?
• Does Google make it difficult for users to choose alternatives to its services?
• Have any measures been taken to level the playing field?

The outcome of these lawsuits will determine whether or not Google suffers consequences for its alleged exclusionary practices — and if the ripples of these decisions will affect other tech titans.

Google’s search 'monopoly' in the dock

In 2020, the U.S. Justice Department filed an antitrust lawsuit accusing Google of monopolizing the search engine market — and on September 12, 2023, the trial for this potentially landmark case began. As Reuters reports, Google is charged with suppressing competition by paying Apple and other partners billions of dollars “to ensure its search engine would be the default on most phones and web browsers.” According to the U.S. Justice Department, Google’s dominance of the search engine market is exclusionary to competitors. Reuters says the U.S. government estimates Google dominates 90% of the search market and that the alleged agreements with its partners are “steering billions of web queries to Google every day,” which in turn leads to “less choice for consumers and less innovation.”

Unsurprisingly, Google has emphatically refuted these allegations. A January filing claimed Google’s agreements were “‘legitimate competition,’” not “‘illicit exclusion,”’ and that “the makers of phones and web browsers choose Google search as their default because they wanted to deliver the ‘highest quality’ experience for their customers.”

The Justice Department isn’t pursuing financial recompense, “but rather an injunction barring Google from continuing the alleged anti-competitive practices” — which could mean any number of things, ranging from the government breaking up the company to preventing Google from “making exclusive deals in newly emerging markets, including artificial intelligence.”

The trial, presided over by U.S. District Judge Amit Mehta, isn’t expected to conclude until 2024.

Google’s ad-tech stack under scrutiny

On January 24, 2023, the U.S. Justice Department filed a complaint alleging Google had once again engaged in anti-competitive conduct — this time by monopolizing “key digital advertising technologies, collectively referred to as the ‘ad tech stack,’ that website publishers depend on to sell ads and that advertisers rely on to buy ads and reach potential customers.” The lawsuit specifically classifies Google’s “anti-competitive and exclusionary conduct” as:

• Buying out competitors, indicating “a pattern of acquisitions to obtain control over key digital advertising tools used by website publishers to sell advertising space.”
• Forcing adoption of Google’s technology by “restricting its unique, must-have advertiser demand to its ad exchange.”
• Distorting auction competition by “Limiting real-time bidding on publisher inventory to its ad exchange.”
• Auction manipulation, which alleges several Google products are protected from competition and hinders “the rise of rival technologies.”

When discussing the suit, Deputy Attorney General Lisa O. Monaco not only condemned Google's behavior as “‘a pervasive and systemic pattern of misconduct,” she also confirmed the U.S. Justice Department’s commitment “to hold big technology companies accountable for violations of the antitrust laws.’”

Holding big tech to account

The U.S. isn’t alone in this attempt to push back against Google’s monopolistic behavior. In 2017, the European Commission “fined Google €2.42 billion for breaching EU antitrust rules,” and ordered the company to “stop its illegal practices concerning its own comparison shopping service within 90 days.”

And in September 2023, a private individual in the U.K. filed a class action lawsuit against Google on behalf of every one of the country’s 65 million citizens. As reported by The Guardian, Nikki Stopford, a consumer rights advocate and the lawsuit’s class representative, alleged: “‘Google has fixed things, sometimes unlawfully, so it is the default search engine on practically all mobile phones in the UK. It abused its market dominance to charge advertisers more than if the market had been competitive – for example, for the sponsored links you see when you use Google to search for something. Advertisers have inevitably passed these higher costs on to shoppers.’” The lawsuit seeks £7.3 billion in compensation, which, if awarded, would result in adult citizens receiving approximately £100 each.

Anti-trust, anti-Amazon

Nor is Google the only tech titan to have fallen foul of the USA's anti-trust laws. On September 26, 2023, the U.S. Federal Trade Commission filed an antitrust lawsuit against Amazon, accusing the tech giant of using its “‘monopoly power’ to inflate prices, degrade quality for shoppers and unlawfully exclude rivals, thereby undermining competition,” according to CNBC.

These lawsuits are being watched carefully by tech companies and those who use their services. If the anti-trust legislation they invoke still has teeth, the consequences for the big tech players could be serious, forcing radical changes in the way they do business, and opening up the market significantly to other players. On the other hand, if the companies succeed in showing that their market dominance is inevitable or justifiable, it will probably herald an even greater concentration of economic power in the tech sector.