Google gets away almost scot-free in US search antitrust case

What was Judge Amit Mehta thinking? When he ruled a year ago that Google violated the Sherman Antitrust Act by stifling search competition, we thought Google was truly in hot water. Boy, were we wrong!

After Mehta’s initial ruling, the Department of Justice (DoJ) demanded that Google divest itself of the Chrome web browser and/or the Android operating system, and also be blocked from exclusive distribution contracts that had placed Google Search as the default on almost all devices and web browsers.

Instead, Mehta last week ordered Google to share (some) search data with its rivals to ensure competition in online search. Oh, and while Google can’t have “exclusive” search deals, it can still have paid search agreements.

That’s it. That’s all.

In other words, it’s business as usual for Google. What. The. Heck!?

When Mehta first ruled on the case, he laid out what we all knew: “By 2020, [Google’s share of the search market] was nearly 90%, and even higher on mobile devices at almost 95%. The second-place search engine, Microsoft’s Bing, sees roughly 6% of all search queries — 84% fewer than Google. Google has not achieved market dominance by happenstance.”

You think?

Mehta continued, “Google is a monopolist, and it has acted as one to maintain its monopoly.” The bottom line: “In 2014, Google booked nearly $47 billion in advertising revenue. By 2021, that number had more than tripled to over $146 billion. Bing, by comparison, generated only a fraction of that amount — less than $12 billion in 2022.”

It sure sounded to me, and pretty much everyone else, like Google was going to get the book thrown at it. While people often draw comparisons to the DoJ vs Microsoft case of the late ’90s, the case that comes to mind for me happened much earlier.

In a similar case, way back in 1969, the mere threat of the DoJ breaking up IBM because it had monopolized the computer market by controlling both hardware and bundled software was enough to make Big Blue unbundle them. This move led to the proprietary software market, which would dominate the computer business until the rise of open source. It changed the IT world. The Google case could have been the same.

Just think about it. If Google were to abandon Android, every Android smartphone vendor worldwide would suddenly have to figure out what they’d do for an operating system. Go with whoever would end up controlling Android?  What if it’s Samsung and I’m one of the other Android smartphone OEMs? I don’t think so!

Does Samsung revive Tizen from the dead? Would the mobile phone companies check out KaiOS? Consider one of the non-Google Android Open Source Project (AOSP) variants, such as LineageOS, /e/OS, or CalyxOS? One of the Linux smartphone operating systems, such as Ubuntu Touch, PostMarketOS, or Mobian? If I were building phones, I’d get sick just thinking about it.

Then there’s Chrome. For all practical purposes, the web runs on Chrome. According to the best information I know of for web browser popularity, the US federal government’s Digital Analytics Program (DAP), which provides a running count of the last 90 days of US government website visits, only 2% of PC users are using Firefox. Everyone is using Chrome or a Chromium variant, like Microsoft Edge.

Don’t think for a moment, though, that if the judge had forced Google to cut Chrome away, Firefox developers would be cheering. They’d be miserable. As Mark Surman, Mozilla’s president, said, without the millions Google pays Firefox to be its default search engine, Firefox would go out of business. “It’s game over for an open, independent web.” Firefox requires this search revenue to survive.

Well, Mozilla has nothing to worry about now. Google gets to keep Chrome and, more importantly, it can still pay Mozilla to be Firefox’s search engine of choice. It just can’t pay them to be its “only” search engine. The same holds for Apple, Samsung, and all the other Android companies.

Sure, these companies could also make deals with, uh, Microsoft Bing? DuckDuckGo? Russia’s Yandex!? Yeah, right. Altogether, the alternative search engines have, according to Statcounter, just over 10% of the search market. I don’t see anyone swearing off their lucrative Google contracts anytime soon.

That’s not to say there won’t be any change. While AI has largely failed to live up to its hype, AI chatbots such as Perplexity and ChatGTP Search are making inroads into the search market. Mind you, Google has its own horse in the AI search race with its Gemini-powered Google AI Search.

What does this mean for Google? The experts, such as John Kwoka, a distinguished professor of economics at Northeastern University, had this to say: “This ruling is a major victory for Google.“

Christo Wilson, professor and associate dean of undergraduate programs at Northeastern’s Khoury College of Computer Sciences, agreed. “I don’t think this ruling is strong enough to make a difference,” he said. Google executives are probably “elated” at the news, he added.

Meanwhile, business analysts, such as those at Wedbush, summed up their thoughts as, “Government Folds Like Cheap Suit.” The market itself clearly made its opinion known when Google’s parent company, Alphabet, saw its stock jump by almost 11% after the decision was announced.

Officially, Google is saying, “We have concerns about how these requirements will impact our users and their privacy, and we’re reviewing the decision closely.” Unofficially, I’m sure they broke out the Dom Pérignon P3 Plénitude Brut, which, by the way, you can drink too for a mere $5,525 a bottle.

True, the European Union (EU) just hit Google with a nearly $3.5 billion fine for abusing its ad technology tools to monopolize the display advertising business. But while that number looks huge to you and me, it’s about 1% of Google’s 2024 revenue. So, instead of a massive change, it will continue to be business as usual for Google and the rest of the tech giants.