DOJ V. Google – Will Google Be Broken Up?

By: Johannes Persch (D’Kart)

The DOJ begins the lawsuit with a brief overview of Google – from a scrappy start-up to a monopoly gatekeeper with a market value of over one trillion dollars (para 1). Then it explains where search engines are used: On the computer or – more and more – on the mobile phone. So far, no surprises. It only gets more exciting afterwards: the most effective means of distribution for a search engine is to be set as the standard search engine – defaults are sticky. Although users could theoretically download another search engine app or change the default search engine, most users would simply not do this. The default search engine enjoys de facto exclusivity (para 3). Google has made itself the sole beneficiary of this consumer inertia through a system of exclusivity agreements and billions of dollars in payments to smartphone manufacturers, mobile operators and browser developers: Google is set as the default virtually everywhere (paras 2-6). This is followed by a few paragraphs on how this behavior creates barriers to market entry and inhibits innovation (paras 7-9): operating a search engine is not only enormously expensive, but also depends on economies of scale with the available data. Google’s practice prevents other search engines from achieving sufficient economies of scale to compete with Google: They lack (scaled) access to users, advertisers and data.

Looking to the future, Google is in the process of applying the same practice to the next generation of electronic devices, i.e. smart speakers, intelligent vehicles, etc. (para 12). The internet of things is thus the next area that could fall prey to Google.

The protection of consumers, advertisers and all companies in the internet industry requires that Google’s behavior be stopped (para 13). Here the action even includes – still rather unusual for American antitrust practice – the keyword data protection…

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