In 2020, a House of Representatives subcommittee released a lengthy report that laid out what it described as the anticompetitive practices of the four major Big Tech companies—Google, Amazon, Apple, and Meta (then known as Facebook)—and asked the Department of Justice to do something about them. A couple of weeks later, the federal government filed an antitrust lawsuit against Google, alleging that the company had engaged in various anticompetitive practices, including a multibillion-dollar deal that made it the default search engine on Apple phones. Last September, the case arrived in court—and this week, a federal judge in the District of Columbia handed down what many analysts say is the most significant antitrust decision since a landmark 1998 antitrust ruling against Microsoft. Depending on what remedies the court imposes, Google could be forced to alter its business model or even break itself apart. The landscape of the internet, in other words, could change dramatically. (Google has said that it will appeal.)
In a decision that runs to more than two hundred and seventy pages, Judge Amit Mehta found that the payments that Google makes to Apple, Mozilla, and other companies in return for making it the default search engine for their smartphones and Web browsers—payments that totaled more than twenty billion dollars last year—amount to an unfair restraint on competition. Mehta stated bluntly that “Google is a monopolist, and it has acted as one to maintain its monopoly.” He found that Google controls almost 90 percent of the search market, a figure that rises to nearly 95 percent for mobile devices, and said that the company has used its monopoly to charge advertisers higher prices than it could have done if the market were more competitive. Mehta concluded that, in a more competitive market, Google “simply could not take this approach,” and that without its dominant position, it couldn’t have achieved “the monopoly profits that it does presently in the absence of rivals.”
As I wrote when the case went to trial last year, Google’s defense, in a nutshell, was that it has such a large share of the market because its search engine is better than those of its competitors, and that internet users are free to choose other search providers whenever they wish. In a pretrial filing last year before the case got underway, Google argued, among other things, that the Justice Department defined the search market too narrowly, that Google doesn’t have a monopoly (which the company defined as “the ability to raise prices beyond a competitive level”), and that its market dominance actually helps consumers because it provides a world-class search service for free. According to Google, its status as the default browser on products like Apple’s did not result from massive payments, but from Google having “successfully competed on the merits.”
Traditionally, US courts hearing antitrust cases have defined anticompetitive behavior by assessing whether consumers have been harmed by a monopolist—with an emphasis on economic harm: that is, higher prices. Google argues that, since its search services are free, there can be no such harm. The Justice Department, however, has argued that consumers can be harmed in other ways, telling the court, for example, that a lack of choice could be defined as a harm to consumers, as could lower product quality. In a nutshell, the government’s case was that Google “has not innovated as it would have with competitive pressure”—an argument that may have been aided by studies appearing to show that Google’s search results have gotten worse over time, throwing up more spam and fewer accurate or helpful links to information.
While Mehta agreed in his decision that Google is the leading search engine in terms of quality, he also stated that most users would likely stick with it even if its quality declined—a conclusion that he appeared to base, in part, on Google’s own evidence. In response to questioning by the court, the company admitted that it doesn’t consider whether users will decide to switch to any of its competitors before it makes a change to its search product. Mehta wrote that just as the power to raise prices is proof of monopoly power, “so too is the ability to degrade product quality without concern of losing consumers.”
For now, at least, the internet isn’t set to change overnight; Mehta’s ruling is still an early step in the case. The next step is the remedy phase, during which the court will hear arguments from the company and the Justice Department, as well as industry experts, as to what steps it should take to alter Google’s monopoly. And Google plans to appeal, a process that George Hay, a law professor at Cornell University and former chief economist for the Justice Department’s antitrust division, told the Associated Press could take as long as five years. That kind of delay might help Google extend its search deals and bring in more revenue, though Hay said that the company could also face class action lawsuits from customers in that time, since Mehta has ruled those deals to be anticompetitive in nature and therefore theoretically illegal.
Nor would the internet necessarily change dramatically in a world where the ruling, and remedy, sticks. Casey Newton noted in his Platformer newsletter that a similar antitrust ruling in the European Union in 2018 eventually forced Google to allow users to choose a different search engine as their default when setting up a new Android phone, while allowing the company to charge other search engines for the right to be included as an alternative. So far, Newton writes, this ruling has had “a negligible effect” on Google’s market share in Europe. Whether a US court would be able to extend this kind of move to Apple’s iPhones remains to be seen, since Apple would have to agree. (It is not a party to the Google case.) And if most users were to choose Google anyway, then the company’s market share would stay where it is, without Google having to pay billions of dollars for the privilege. That doesn’t seem like much of a remedy.
The most extreme option would be to force Google to sell off parts of its search and/or advertising businesses, to prevent the company from using them to maintain or extend its monopoly. Some prominent Google critics have advocated this approach, including Senator Bernie Sanders and the American Economic Liberties Project, a nonprofit funded by Pierre Omidyar, the founder of eBay. But that kind of nuclear option has only been used in a handful of cases, such as the breakup of AT&T in 1982. In the Microsoft case, which some analysts say is the most similar to Google’s, the government ultimately failed to persuade the court to dismantle the company. Although Microsoft was found to have engaged in anticompetitive behavior, the original ruling was partially overturned on appeal, and the company reached a settlement that entailed a fine and an agreement to allow Windows users to install competing Web browsers.
Although the Microsoft decision was not seen as a slam-dunk win for the Justice Department and for US antitrust law, some technology analysts have argued that the lengthy trial and attendant public spotlight helped to blunt the force of Microsoft’s business as a whole, and in doing so helped smaller competitors to gain ground—including an up-and-coming search engine called Google. In a similar way, some technology-watchers have argued that the antitrust case against IBM, which was filed by the Justice Department in 1969 and eventually abandoned in 1982, helped slow IBM’s business in ways that encouraged the development of more agile competitors including Microsoft and Apple.
These historical examples have convinced some observers that, regardless of the eventual outcome of the Google lawsuit, the fact that one has been filed at all implies that the era of the search engine, and Google’s dominance of that era, is likely coming to an end. Not that the existence of the suit is necessary to make such an argument. Many observers believe that artificial intelligence tools will replace or take over search in the near future, by responding with personalized answers to queries that users submit vocally or through dedicated apps, rather than by typing into a textbox on a website. OpenAI, the company behind the popular AI engine ChatGPT, recently launched its own AI-powered search engine. Like the other tech giants, Google is currently trying to catch up in the AI race by offering its own services, including the Gemini platform.
For now, Google continues to face a second antitrust case alleging that it engages in monopolistic practices and anticompetitive behavior in the advertising market. Judge Mehta didn’t really help the Justice Department with that case when he stated in this week’s decision that Google “lacks monopoly power” in that arena, and therefore is not liable for its actions related to Google search ads. But Eric Posner, a law professor at the University of Chicago and antitrust expert, said that the recent decision could make the next case somewhat easier to prosecute, in part because all of the text messages, emails, and other evidence from Google that were admitted in the search case will be available. The advertising case is set to be heard by a Virginia court, starting September 9.
Other notable stories:
- Yesterday, we wrote in this newsletter about the perceived good “vibes” of Tim Walz, the governor of Minnesota and, now, Kamala Harris’s running mate. Now The Atlantic’s Charlie Warzel has articulated “a Tim Walz Theory of Attention” on the internet, arguing that Walz has “slid perfectly into a load-bearing trope of social media”—the fact that the internet already “loves dads”—while at the same time presenting himself as above the fray of online discourse, in sharp contrast to Donald Trump’s running mate, J.D. Vance, who “projects an extreme onlineness that may alienate him from voters.” Walz appears aware of what’s being said on social media “but mostly because he hears about it from his kids,” Warzel writes. “He’d rather not engage—a feeling that may be familiar, even aspirational, to voters tiring of an era of doomscrolling and weird, hyper-online politics.”
- Meanwhile, Republican attacks on Walz amped up, with Vance and others accusing him, in particular, of a dishonorable military record. (Politico examined those claims here.) Like Walz, Vance served in the military. Writing for CJR, Ben Kesling, a veteran and former reporter at the Wall Street Journal, warns that newsrooms are shedding staffers who are veterans just when they need them most—for their expertise in examining political candidates’ military backgrounds, and more besides. For one thing, “having fewer veterans on hand threatens to leave newsrooms less prepared to intelligently and aggressively push back on official claims when the next conflict breaks out,” Kesling writes. Veterans can “also bring a special sensibility to coverage beyond conflict.”
- Nieman Lab’s Sophie Culpepper profiles The Assembly, an online magazine in North Carolina that—in the words of Kyle Villemain, its founder—was built as a response to the question “What does a state-level Atlantic [magazine] look like?” The Assembly has partnered with a variety of other local outlets in the state, and has a subscriber-first model. The site “isn’t currently profitable, but that hasn’t stopped it from taking big swings in both the editorial and business senses,” Culpepper notes. “With a mission of publishing ‘deep reporting about power and place in North Carolina,’ the publication has an ambitious vision of curiosity-driven reporting that holds power to account.”
- Yesterday, Britain’s National Union of Journalists warned that reporters and photographers covering recent far-right riots in the country have faced worsening threats and violence, and urged the police and media companies to protect them. Ahead of massive predicted unrest last night, several broadcasters told staff to leave early or to work from home if they felt more comfortable doing so—but in the end, despite reports of violence and disruption in some places, the predictions largely did not come to pass. Rioters were often outnumbered by counterprotesters, when they showed up at all.
- And for the New York Times, Maya Salam revisits The Blair Witch Project—the faux-documentary horror movie that challenged audiences to decipher whether it was real or not when it came out twenty-five years ago—and explores how it presaged an era in which people “apply that exact question to nearly every image, sound or nugget of information we encounter.” These days, “no one believes anything, and they believe everything at the same time,” Daniel Myrick, one of the directors, said. “It’s really weird.”
