In this context, it becomes very difficult to envision what a competitive marketplace in search would look like. What new innovations in search have we missed out on because no one has been able to apply competitive pressure on Google’s search engine for the last 15 years? How might we be accessing information online today if there had been vigorous competition in search? Would it be easier to find what we’re looking for? Would it be easier to assess the reliability of online sources? Is it possible different users have different preferences for a search engine? Would consumer choice allow some differentiation of products that we could choose from based on our own distinct needs?
Instead, Google Search has been optimizing its search engine results page for you to click on ads instead of the links that it thinks are most relevant for users. And it’s not just our experience on Google.com that is impacted by this lack of competition. Websites across the internet have been built to optimize for this one algorithm due to Google’s extreme dominance in search. Google, of course, doesn’t share the details of its search algorithm, but the company does share some high-level characteristics of websites that do well. In fact, an entire industry, “search engine optimization,” has sprung up around helping people build their websites to rank higher in Google Search. Many characteristics of the web today resulted from Google’s algorithm choices. For instance, people blame food bloggers for forcing us to wade through long, boring stories just to scroll to a recipe, when we should really blame Google for preferring (and rewarding) that type of content in the first place. What content are we missing out on because so many websites and publishers are designing our web experience to meet Google’s own predictions of what users will click on?
In 2012, the Federal Trade Commission investigated Google for antitrust violations related to its search engine. At that time, the agency declined to bring a lawsuit. Accidentally leaked documents from inside the agency seemed to indicate that the FTC staff were concerned, but were overruled by agency leadership, but it’s difficult to get a clear picture of the non-public back-and-forth that may have gone on inside the agency. Thinking back to where antitrust law and thinking was at that time, I have to admit, I wasn’t surprised by the result. Antitrust enforcers at that time were focused on older monopolists like Microsoft. And many antitrust economists believed that the fact that the search engine was free was a strong indicator that the market was competitive.
An argument I remember distinctly from that era was: “Competition is just a click away.” Compared to traditional industries, where switching costs were obvious and high (shipping your chemical input to a different pharmaceutical factory; shopping at a grocery store that’s five minutes farther away; and so on), the seemingly frictionless environment of the internet provided the illusion of choice. But market participants knew that the power of defaults was strong, even online. Today, it is clear: Competition is not one click away. To change your default search engine across your devices is a cumbersome process. And this change frequently reverts back to Google Search after software updates, requiring users to repeat their effort. It makes sense that defaults are powerful. Otherwise, why would Google pay Apple $1 billion a year (according to the DOJ suit) for the right to be the default search engine on the iPhone? And of course, businesses that rely on Google to reach customers can’t switch to a competitor, Google is where the users are, so businesses are stuck.
It’s a huge sign of progress that the DOJ felt strongly enough about these problems to bring this case forward. And the fact that Judge Mehta, who is presiding over the case, rejected Google’s summary judgment motion on these counts and allowed this case to proceed is another strong indicator. But even if this case is wildly successful and the court grants highly effective remedies to promote competition in the search engine market, that decision will not be an indication that our antitrust laws are as strong as we need them to be, or that sector-specific laws are not needed. In fact, Google’s dominance in search and its use of default contracts to protect that dominance is just one of several significant barriers to competition against dominant digital platforms. Congress has been working hard on addressing these problems as well, while we’ve been waiting for this one case to work its way through the slow litigation process. Congress will still need to act to fully address the power of dominant digital platforms, regardless of the outcome.
