In an eyebrow-raising move, the Department of Justice (DoJ) announced last week that Assistant Attorney General Jonathan Kanter has been cleared to lead an investigation into whether Google has knowingly participated in anti-competitive behaviors in violation of the Sherman Antitrust Act of 1890.
Critics of the move, including Google itself, point out that during Kanter’s recent years in private practice, he represented a long list of the company’s competitors, such as Microsoft and Yelp. During this time, he advocated for an “antitrust case against Google,” which itself should have barred him from leading the investigation since it represents a conflict of interest.
The DoJ’s decision has important implications for the upcoming court case U.S. v. Google, which is set to go to trial in early September. That case, stems from a 2020 DoJ complaint against Google alleging that the company has, for “many years, unfairly maintained and extended monopolies” over important markets like “general search services.” These monopolies have had the net effect of “crippling the competitive process, reducing consumer choice, and stifling innovation.”
These claims are provocative. They not only assume that Google’s success in the search engine market was unearned, but also that it’s harmed consumer welfare. On the contrary, while it’s true that Google has participated in several mergers and acquisitions over the years, a careful examination of Google’s record, research and development (R&D) investment practices and innovative product offerings makes it clear that Google got to where it is today because of its wise decisions and consumer focus. Any concerns the DoJ may have about anticompetitive behavior should be carefully weighed against these other factors.
Critics like to point out that Google maintains the lion’s share of the search engine market. For example, at the end of 2022, Google controlled 87.72% of the domestic search engine market. However, this hasn’t always been the case. As recently as 2002, Yahoo! was the leader in the market. That year, Google only accounted for 29.5% of the U.S. market while Yahoo! accounted for 36 percent. Only over many years of smart investment decisions has Google acquired a robust lead in this arena.
As described by Congress in a 2020 report called Investigation of Competition in Digital Markets, Google’s early R&D investment practices and mission to become the “first company to crawl the entirety of the Internet” gave it an early head start over competitors. This head start allowed it to develop a comprehensive web index, or map of the internet, that all search engines must use to respond to user queries. The report notes that building these types of indexes requires “high fixed costs” and “significant server storage” and therefore tends to favor early movers.
That Google made smart early investment decisions shouldn’t be seen as a fault. And it continues to make these types of investment decisions today. As noted in a recent article examining Google’s continued growth, over the last 12 months Google has spent a whopping $38 billion on R&D to enhance its technological capabilities and develop new products. In addition, the company continues to focus on the strategic diversification of its investments, recently having prioritized venturing into the global cloud competing arena by spending heavily on “infrastructure, security, data management, analytics, and AI.”
Another reason for Google’s continued success in the search engine market is its laser focus on the consumer experience. Google wisely designs its search engine algorithms around anticipating consumer wants and needs. Similarly, the company uses its vast amounts of “click-and-query data” to improve product services and customize search results to the user, keeping people coming back for more. Google Search is also completely free to users, meaning consumers bear no financial penalty by using the service but receive all the benefits. With quality offerings like this, it’s difficult to understand why the DoJ feels the need to intervene in the market at all. Indeed, it’s only been because of Google’s unusual focus on consumer welfare and regular investments in technological advances, system updates and new product features that Google has become as popular as it is.
This popularity is reflected in public opinion surveys. For instance, according to a recent SEO Clarity’s Survey, 65.7% of Americans believed Google was trustworthy, with just 21.1% disagreeing. This rating was the highest any technology company received in the survey. However, Google’s strong popularity among users remains best reflected by the fact that users continue to utilize its services.
Despite the DoJ’s persistent claims that Google’s business deals keep competition from entering the market, plenty of alternative services are, in fact, available to consumers. Many of these services have their own “default” browser and accompanying search engine.
For example, most Apple products use Safari as their default browser, which means consumers must take the additional step of installing Google Chrome on their devices if they wish to make Google Search their default search engine. The same is true for most Microsoft products. For example, Windows 11 computers have Microsoft Edge (formally Internet Explorer) set as their default browser, as do all of Windows 11’s predecessor systems. Microsoft also has its own search engine called Microsoft Bing, which was introduced in 2009.
Other companies like Yahoo! also have their own web browsers and search engines. For example, Yahoo! previously operated the web browser “AltaVista” and plug-in “Yahoo Axis” until both services were discontinued in 2013. However, Yahoo! still maintains search engine capabilities, as any person alive in the 90s is surely aware. Countless other services are available to consumers as well, such as DuckDuckGo, Ecosia, Mokeek and more.
When U.S. v. Google goes to trial later this year, the DoJ would do well to remember that Google provides people a service that they overwhelmingly approve of and want. Any concerns about anticompetitive behavior should be carefully weighed against this state of consumer welfare.
Nate Scherer is a Policy Analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit us on www.TheAmericanConsumer.Org or follow us on Twitter @ConsumerPal