Antitrust cases do not often capture everyday Americans’ attention, but the recent case the government hatched against Google deserves more attention than it has received. The consequences of the ruling will have long-lasting effects, far beyond the realm of Big Tech, and American consumers will lose out.
Google’s recent loss in the biggest antitrust legal battle in more than 20 years is a blow to Silicon Valley. Despite accusations of anticompetitive practices, Google really lost because it excels at what it does—being the global leader in online search.
America’s 30th president Calvin Coolidge once remarked that the “chief business of the American people is business,” and Americans are “profoundly concerned with producing, buying, selling, investing and prospering the world.” We have built a culture that is committed to innovating. Our best inventions and companies are household names around the entire globe. Google is among those American products and companies that are known and used by people all around the world.
As is widely known, Google was started in a humble garage in California in 1998 by Stanford University Ph.D. candidates Larry Page and Sergey Brin. They had a vision then that has guided the company over the past 26 years—a passion “to organize the world’s information and make it universally accessible and useful.”
In short? They set out to make the world’s greatest Internet search functionality. And, to a remarkable degree, that’s exactly what they accomplished.
In fact, Google’s dominance in the field was even recognized by the presiding judge during the trial. U.S. District Judge Amit Mehta commented that Google has built “the industry’s highest quality search engine.” That sounds like a ringing endorsement, not a reason to level antitrust charges against Google. Even Microsoft’s CEO Satya Nadella admitted in his testimony that Microsoft’s search engine, Bing, is inferior to Google.
The case, brought by the U.S. Department of Justice, rests on a novel antitrust theory. Rather than determining if consumers have been harmed by anticompetitive practices, the Justice Department is claiming that Google’s dominance in the market is proof of its anticompetitive practices. How else, the case argues, could a company hold 90% of the market?
Judge Mehta sided with the government in ruling against Google and Apple. The two companies had a product placement deal to make Google the default search engine on the iPhone. Apple, it is worth noting, was paid $20 billion for this arrangement, but, as a company that is also determined to deliver the best value to its customers, this arrangement represented two companies putting the best product forward. Apple executives testified that “there’s no price that Microsoft could ever offer” to make Bing the default search engine on their devices.
Customers who purchased iPhones were not prohibited or restricted in any way from downloading Bing or any other search product as their default.
Google is sought out by consumers because it works reliably and quickly, and there is no other company that delivers a product anywhere close to Google’s search. In the European Union, when competitors complained about Google, regulators required that a “choice screen” be put onto all new phones. The result? Consumers had to take an extra step to make Google their choice. But Google remained the default on the vast majority of phones.
Lost on the judge and on the Justice Department is this simple fact: Google dominates in this marketplace because the product dominates as consumers’ top choice.
In business, and especially in the tech industry, unpredictability is the defining feature. The ever-changing landscape means companies thrive when they anticipate where the market is heading.
Google’s founders set out to make the Internet more user-friendly because they knew that was where the market was heading. People would want faster, better, more efficient, and more customized search results. And the reason people continue to choose Google for their online searches is that the company today remains obsessive about delivering the best search results.
The traditional consumer welfare standard in antitrust was jettisoned in this lawsuit against Google. Consumers, far from being hurt by Google’s practices, have benefited for two decades.
As Judge Mehta noted during the trial, “The importance and significance of this case is not lost on me, not only for Google but for the public.” He was right. The importance of this ruling, if it is allowed to stand on appeal, will have a negative effect on future companies that innovate and dominate in the market because they deliver exactly what their customers want.
Google’s 90% share of the market is not the result of alleged anticompetitive behavior or efforts to block would-be competitors. Google reigns as the leader in search because the competition offers an inferior search experience.
There’s a reason why the top search query on Bing is “Google.”
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