How about a little trust in the dynamism of the free market? Writes Matthew Feeney
An American federal court recently hit Google with a huge blow in one of the most significant antitrust rulings in recent history. Judge Amit Mehta’s ruled that Google’s distribution deals, which allow the Silicon Valley giant’s search engine to appear as the default search engine on some devices and browsers, are monopolistic and illegal. The ruling offers an opportunity to consider how lawmakers and regulators should think about digital markets, the role of Big Tech in these markets, and how people seek information online. This is especially important in the UK given the passage of the Digital Markets, Competition and Consumer (DMCC) Bill earlier this year.
While headlines may blare Google declared a monopoly, the ruling isn’t quite as simple as this makes out, as this label only applies to certain agreements and types of search advertising.
Google pays firms a huge amount of money every year for the privilege of being the default search engine on a range of devices. In 2022, for example, Google paid Apple $20bn to be the default search engine for Apple’s internet browser Safari. It also pays Mozilla hundreds of millions of dollars a year to be Firefox’s default search engine.
At first glance, these kinds of deals might imply monopolistic behaviour. But it is worth keeping in mind that everyone who purchases an iPhone or uses Firefox can still use other search engines for free. No one is forced to use Google if they would prefer to use another search engine. On top of this, we should not discount the fact that Google’s popularity compared to other search engines such as Bing, Duckduckgo and Brave has a lot to do with Google offering a superior product rather than predatory monopolistic behaviour. Indeed, Judge Mehta’s ruling refers to Mozilla-led experiments indicating this.
For instance, back in 2016 Mozilla experimented with changing its default search engine. Experiments involving Bing and Yahoo both found that Google remained the preferred search engine of choice even when it was not presented as the default search engine. Thanks to European Union antitrust enforcement, Google has had to offer Android users a search engine choice screen since 2020. Users have overwhelmingly continued to choose Google.
When given the choice between Google and other search engines, internet users have voted decisively with their digital feet. After all, when was the last time you used Yahoo search? Do you know anyone who uses Bing?
Despite evidence suggesting that Google’s dominance is in large part down to consumer choice rather than monopolistic behaviour, the UK’s Competition and Markets Authority (CMA) found in its online platforms and digital advertising market study that Google default distribution agreements “act as a significant barrier to expansion for rival search engines and lead to weaker competition to Google in general search”.
This is especially important given that the last government passed the DMCC, which enables the CMA’s new Digital Markets Unit (DMU) to issue “pro-competition interventions” without having to first consider consumer benefits. Given the CMA’s recent decisions related to Meta and Microsoft, we should not be surprised if the DMU acts swiftly to launch more investigations into Google.
As regulators, lawmakers and judges consider how to address Big Tech giants they should consider that while Google and Microsoft might be household name companies, the way internet users conduct searches is changing. Unfortunately, Judge Mehta rejected arguments pointing out that many people now use social media for searches. Indeed, almost half of Gen Z Americans prefer to use social media for searches over traditional search engines. And we should expect the rise of large language models such as ChatGPT to further change how people seek information and define search engines.
It is easy to look at the current digital landscape and see immortal giants. But we must not forget that members of the Big Tech family fiercely compete with each other and are constantly trying to adapt to changing consumer behaviour. Those distressed by the continued dominance of Google’s search engine should take comfort in the fact that innovation in dynamic markets such as those seen in social media and Artificial Intelligence are already changing what millions of internet users expect from their browsing experiences. It remains to be seen if Google will be able to keep up.