Google Antitrust Lawsuits Explained
Has big tech gotten too big?
This is the question plaguing several of the largest tech conglomerates whose services are used by millions across the globe. Since October 2020, multiple antitrust lawsuits have been filed against Google by the Department of Justice and over three dozen states.
Being in a dominant position across multiple markets, the tech giant has been targeted in multiple cases. The cases focus on Google’s non-search advertising products (e.g., Google Drive, Google Mail, Google Calendar) and its search-specific advertising business, for which Google is best known.
Google has denied any wrongdoing.
Why is Google getting sued?
Are these lawsuits a way to punish Google for being too big? Not exactly.
As the Federal Trade Commission (FTC) notes, there’s a distinction between healthy market competition and anti-competitive market practices.
The former is encouraged, where companies improve upon their products and services to gain market share and make consumers happier. On the other hand, the latter uses a company’s reach to push out smaller players, prevent smaller company advancement in the space, and cement the monopoly’s reach.
These antitrust lawsuits against Google all claim the former — that the tech giant used its sprawling reach to discourage competition within internet search and internet advertising, ultimately allowing it to remain the largest player and grow further with minimal encroachment from smaller companies and firms in their related markets.
Looking at the current antitrust cases against Google, there is specific evidence that points toward anti-competitive activity.
One such example is Google’s deal with phone makers like Apple, exchanging monetary compensation (up to $12 billion annually) for continued status as the default search engine for Apple’s smartphones.
Another instance of anti-competitive behavior is Google’s active efforts to crowd out organic search results with increasing ad placement frequency. This lessens the user experience on Google Search by placing advertisers ahead of companies ranking highly due to the quality of their content, products, or services.
All of these anti-competitive market practices combined have led to multiple lawsuits against the tech giant.
How many antitrust lawsuits have been filed against Google?
The first antitrust case came directly from the DOJ, with the attorneys general of eleven states initially joining the case. The primary argument of the DOJ’s case claims that Google actively prevented its rival search engines from advancing in the market through anti-competitive tactics.
One such example is a detailed complaint that shows how Google went above and beyond to ensure they were the default search engine on smartphone web browsers. Google paid Apple up to $12 billion per year to keep its search engine as Apple’s default across their product base.
The second antitrust case to be filed against Google was a 10-state group led by the Texas attorney general.
Focusing on Google’s far-reaching control over digital advertising, the Texas case claims Google actively exploits its control over the pipeline.
Google controls nearly the entire advertising supply chain by facilitating the transaction for both the advertiser (buyer) and website publisher (seller) on its digital advertising platform.
With this level of control, it shouldn’t be a mystery as to how Google rakes in the advertising profits to the detriment of other ad tech firms.
Additionally, one of the strongest points of the Texas case claims Google and Facebook “unreasonably restrained trade and harmed competition through an unlawful agreement to allocate auction wins and to fix prices in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1.”
This effort to suppress competition and further monopolize the advertising market provides strong ammunition for the Texas case.
Driven by the attorneys general of Nebraska and Colorado, the next major case against Google was filed by a coalition of over 30 states.
In addition to the claims in the DOJ’s case, the state coalition case claims Google used its monopoly over internet search to actively discriminate against vertical search companies such as Tripadvisor, DoorDash, Kayak, or Yelp.
The educational website GeeksforGeeks offers a comprehensive explanation of vertical and horizontal searches.
In summary, vertical search is when websites or applications focus on a specific industry, category, or niche and aggregate content within that space.
Horizontal search can be described as a typical “general search,” where a searcher isn’t focusing on a specific content or media type.
The state coalition case claims Google’s efforts to encourage people to start their searches with Google, instead of going to Yelp, Kayak, or other vertical search websites directly, has put these companies at a disadvantage.
A press release from the Colorado attorney general’s office stated, “As a consequence, consumers lack choice and the benefits competition can bring, such as better quality and increased privacy.”
Google has changed the layout of its search results over the years to direct searchers to its own properties first (e.g., Google Hotels, Google Flights) and placed other vertical search companies lower on the results pages.
In response to the state coalition lawsuit, Google again denied any wrongdoing, claiming that the reorganization of its search results was intended to provide more relevant and useful content to its users.
What the Google Antitrust Lawsuits Mean for You
Depending on how close you are to Google’s product/service ecosystem, the effects you feel directly as a result of these antitrust cases will differ.
Casual web and smartphone users, for example, will see a wider variety of search engines available for use if Google loses in these antitrust lawsuits. Instead of being directed to Google by default, many more users will search the internet using privacy-focused search engines such as DuckDuckGo.
When booking travel, looking for hotels, or searching for activities on your next vacation, Google’s loss in these antitrust cases would place vertical search websites higher in the search results. Instead of seeing services such as Google Flights or Google Hotels above the fold, you’ll begin to see more companies like Tripadvisor, Yelp, or Kayak.
These are just a few of the impacts these antitrust lawsuits would have on the average web user, with more far-reaching effects being felt by marketers and advertisers.
What do these Google lawsuits mean for the marketing industry?
If Google were to lose the antitrust cases currently filed against it, marketers and advertisers would feel the effects much more acutely than the average internet user.
Greater Competition, Increasing Costs
With an antitrust case loss, Google may reduce the number of ads it places across its organic results and its search partners. With fewer advertising spots available, competition for those few spots will be stronger, ultimately increasing the cost for advertisers due to supply and demand.
For smaller businesses with lower budgets, increasing ad costs could price them out of the market, forcing them to advertise elsewhere and find more affordable solutions to promote their business.
Major Search Engine Optimization (SEO) Changes
Search Engine Optimization (SEO) is an area of marketing focused on optimizing websites to rank higher on search engines, ultimately driving more traffic to the optimized web properties and generating more sales and revenue as a result.
Due to Google’s dominance over internet search, SEOs typically focused all of their search optimization efforts toward Google.
If Google were to lose its antitrust cases, internet users would begin to see other web browsers more frequently. This would require SEOs to optimize not only for Google but for a variety of search engines simultaneously.
Coupled with a reduced number of advertisements above the organic search results, SEO would become more important than ever for marketers in driving organic search engine traffic to their websites.
Since you can no longer just “buy an ad” and affordably bid the highest for the top spot, marketers will have to reinvent their strategies and focus more on search engine optimization rather than just search advertising.
How will Google antitrust lawsuits affect other Big Tech companies?
Google’s antitrust lawsuits would set a precedent for the further investigation and scrutiny of major tech conglomerates such as Facebook, Amazon, and Apple.
A popular tactic used by tech giants to further their reach and increase their market share quickly is the act of buying up smaller companies and consolidating certain industries and niches. Depending on the outcome of Google’s antitrust cases, a loss followed by further scrutiny would make it more difficult for “Big Tech” to buy their smaller competitors.
It may also change how these tech giants interact with their customers and their tactics to lock customers into their ecosystems. A great example of this is Amazon, which effectively locks in customers through Amazon Prime subscriptions and keeps millions of sellers locked into their ecosystem through the concentration of buyer demand.
The outcome of Google’s antitrust lawsuits is definitely going to impact big tech — the extent of which remains to be seen.
Why is The Lanier Law Firm going after Google?
The Lanier Law Firm filed a 130-page lawsuit in the United States District Court for the Eastern District of Texas, joined by nine additional state attorneys general.
In an interview with the publication Texas Lawyer, Mark Lanier compared today’s tech conglomerates with the oil barons of the 19th and 20th centuries.
“Google is — in fact, several of the tech companies now — in my mind are equivalent to the oil barons who brought forth the antitrust laws,” Mr. Lanier said.
The Lanier Law Firm is doing its part to uphold the law, serve the country, and help usher in an age of just and fair opportunity for small and big businesses alike.