The DOJ’s Action against Google’s Monopoly Is Long Overdue

The case tests whether existing American antitrust laws are still capaple of protecting competition.

September 18, 2023
A Google sign is pictured on a Google building in Manhattan, October 20, 2020. (REUTERS/Carlo Allegri)

Last week kicked off the United States Department of Justice’s (DOJ) landmark case against one of the most enduring monopolies of the digital era: Google’s control of online search.

Beyond being the first monopolization case to be brought under US antitrust law since the Microsoft trial in the late 1990s, this case tests whether existing American antitrust laws are up to the task of protecting competition from the power of digital giants. The implications for future regulation are enormous.

No monopoly is more indicative of our current economic moment than Google’s hold on online search. While Amazon can point to in-person retail and Meta to TikTok, in response to claims of their dominance in a given market, Google’s position in search is unparalleled.

With rare exception, Google’s market share in the search space worldwide is around 90 percent, a figure even nineteenth-century robber barons would envy. It’s this position in search that drives the advertising juggernaut that accounts for around 75 percent of the revenue of its parent company Alphabet.

The core of the DOJ complaint is that for Google to maintain its position as the most popular search engine in the world, it has engaged in a range of anti-competitive activities to shield itself from competition.

The DOJ argues that a key lever in Google’s strategy has been its deals to have its services used by default on various platforms. For example, when an iPhone user performs a search using Safari — a browser developed to run on Apple devices — the default option is Google’s search engine.

While this may seem reasonable given the ubiquity of the search engine, Google pays platforms handsomely to maintain that default position — for Apple alone, an amount estimated north of $10 billion annually. Though Google has downplayed the role of defaults in shaping competitive outcomes, the DOJ argues these massive premiums serve as an effective moat against would-be competitors.

The DOJ also alleges that Google has tried to subvert the discovery process, possibly to the extent that it could affect the outcome of the trial.

Despite a legal hold to preserve communication that could serve as evidence, the DOJ alleges that the company deliberately destroyed evidence by using auto-deleting chat apps for communication relevant to the proceeding. If the judge presiding over the case decides to sanction Google for this conduct, it would undercut the company’s argument that its conduct was not in violation of American antitrust law.

Meanwhile in Canada, bucking our usual laggard trend, the federal Competition Bureau conducted an investigation of Google, examining similar practices, years ago. A report summarizing its findings was released in 2016.

Less surprising is that, unlike the US Department of Justice, the bureau did not find practices resulting in a substantial lessening of competition. Though with a 2021 announcement that the regulator was once again investigating Google for problematic conduct in advertising markets, the current laxity of Canadian competition law leaves room for a little optimism.

As Canadian policy makers engage in a review of our own competition policy, the question of why Google got an apparent pass in Canada should be top of mind.

The trial that began Tuesday is nothing less than a test of fitness of the ability of American antitrust law to address the monopolies that have come to characterize the world’s most important digital markets. A successful case could mean a dramatic shift in the competitive landscape of online search.

Structural remedies such as breaking up components of Google’s digital advertising business could possibly be on the table. But realism dictates caution: the road to relief is through a judicial system that has grown increasingly comfortable with monopoly power over the past half century. If the case fails in court, its final legacy may be the motivation needed for a major reform of America’s antitrust laws.

Whatever the outcome, the US Department of Justice’s case against Google is sure to be a landmark in the ongoing fight to reinvigorate fairness, competition and dynamism in markets that are critical to the future of the global economy — something that’s long overdue.

This article first appeared in the National Post.

The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.

About the Author

Keldon Bester is a CIGI fellow and the executive director of the Canadian Anti-Monopoly Project, a think tank dedicated to addressing the harms of monopoly and building a more democratic economy.