Comment After more than 15 years of repeating that “competition is just a click away,” Google’s antitrust mantra no longer keeps regulators at bay.
In 2013, Google escaped an investigation by the U.S. Federal Trade Commission unscathed, with the watchdog agency closing its probe without bringing charges. Its other run-ins with competition authorities around the world have been similarly inconsequential. There have been fines, but they have not been significant.
In the past eight months, however, Google has lost two major antitrust lawsuits in the United States: one brought by Epic Games over Google’s hold on the Android ecosystem, and the other brought by the Justice Department over Big G’s market-dominant search advertising business.
In the Epic Games case this week, the FTC — emboldened by CEO Lina Khan — urged the judge to consider an appropriate remedy and ignore Google’s concerns about the potential cost of compliance.
In the Justice Department’s search engine advertising case, attention has also turned to possible solutions now that Google has been declared an illegal monopoly.
The Chocolate Factory has appealed Epic’s verdict and also plans to challenge the DoJ’s victory.
However, given the EU’s preliminary findings in 2023 that Google violated antitrust laws with its advertising practices, and a separate trial in September over Justice Department allegations about Google’s ad tech operations, it seems increasingly unlikely that the search giant will survive in its current form or with its current arrangements.
U.S. prosecutors working on the search advertising case have reportedly discussed options, including breaking up the two companies, that could be presented at a hearing on September 6. Those options could include spinning off Google’s Chrome and Android into separate entities; forcing the internet giant to abandon its exclusive agreements that make it the default search engine on devices and in browsers; and/or making it share data with competitors.
Jason Kint, CEO of Digital Content Next, said: The register that in the Justice Department’s search advertising case, “I think the forced divestiture of Chrome and Android are both on the table, for sure.”
“What the judge made clear is that Google has an overwhelming monopoly in the search engine space,” Kint said. “And they have abused it.”
If the ongoing trial over the separate ad tech — which covers the back-end bidding portion of Google’s ad business — plays out the same way as the search trial, Google’s DoubleClick business, or a related part of its ad auction infrastructure, could be in the hot seat.
One of the main issues the Justice Department has raised in the search ad case is the payments Google made to Apple and Mozilla to be the default search engine for Safari and Firefox. If those payments go away, there will be blood to be shed, not just for Google, but for Apple and Mozilla as well.
Apple would have to find other sources of revenue to replace Google’s $20 billion in annual payments. That could encourage iBiz to compete with Google — by creating its own search engine or acquiring one. Mozilla, which is already showing interest in the advertising business, could be pushed further in that direction — an outcome that is unlikely to please the anti-commercial portion of its electorate.
A happy, if unlikely, outcome would be for Google to be forced to hand over Chrome and the open-source Chromium project to Mozilla. This would likely involve creating an independent nonprofit foundation that wouldn’t reduce browser diversity — so that Chrome and Firefox could continue to live independent lives.
Chrome could also be run as a for-profit business, but revenue generation could be an issue: Internet users expect browsers to be free, so we would go back to default search agreements and selling information to advertisers.
The possibility of forcing Android to be divested is also intriguing, but it’s unclear how Android app development and distribution would work if deprived of Google’s monopoly money.
It’s worth asking whether Google’s competitors—Amazon, Apple, Meta, or Microsoft—could turn Android or Chrome into something more consumer-friendly. The answer is almost certainly no. After all, each of these giants is also subject to constant antitrust scrutiny. And each of them would likely be looking for ways to make Chrome or Android more extractive.
There is a real risk that a poorly targeted solution could allow another data predator to thrive or degrade the ecosystem as a whole, as happened when wolves were eliminated from Yellowstone. Imagine a Meta exploiting Google Play, and what would privacy disclosure look like then.
The problem is that software platforms need regulation tailored to their specific abuses. Operating a software (or e-commerce) platform is similar to operating a shopping mall, except that platform owners can impose arbitrary conditions on tenants that would never be accepted in the physical world. In the tech industry, a platform is simply a vehicle for unfair competition—see the FTC’s allegations against Amazon.
Let’s say someone opens a card shop and it becomes very successful. As the owner of the platform, you can decide to open a card shop yourself. This would be a mean thing to do to a shop owner whose efforts and presence add value to your mall, but there is no law against it.
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And if your tenant’s store is doing better, you can rearrange the layout of the mall to make that store harder to find while you move your own store to the entrance where everyone will see it. Or you can decide to impose an arbitrary contract rule that gives you an advantage. Maybe you can implement private APIs that make your maps work better while prohibiting your tenant from using those APIs. Or you can choose to charge a commission that makes it difficult for the tenant to be profitable.
This type of self-preferencing is common on software platforms, where it would cause an uproar or lawsuit in a real shopping mall.
Forcing Google to divest Chrome or Android might help, but whatever solution is imposed, it must also address self-preference, just as the European Digital Markets Act did for designated gatekeepers. Platform owners should be prohibited from favouring their own services and competing unfairly with platform tenants. ®
