In recent years, Google has found itself at the centre of numerous antitrust investigations and lawsuits. It is accused of leveraging its dominant position to suppress competition and maintain its market monopoly. All the allegations paint a comprehensive picture of Google’s controversial practices and their implications.
Table of Contents
The Rise of a Giant and its Market Dominance
Founded in 1998 by Larry Page and Sergey Brin, Google quickly became prominent with its innovative search engine. By providing more relevant search results than its competitors, Google became the go-to search engine for millions of users worldwide. Over the years, Google expanded its services to include email (Gmail), video sharing (YouTube), a mobile operating system (Android), and much more. This expansion diversified Google’s portfolio and solidified its dominance in multiple markets.
As of 2024, Google holds a staggering 81.95% share of the global desktop search engine market. In the mobile search market, Google’s dominance is even more pronounced, with a market share of around 94% in the United States. This overwhelming control has raised concerns among regulators and competitors, prompting antitrust investigations and lawsuits.
The Legal Battles
One of Google’s most significant legal challenges is an antitrust lawsuit filed by the United States Department of Justice (DOJ) in October 2020. The DOJ accused Google of violating the Sherman Antitrust Act by monopolising search engines and advertising markets. The case, which has been described as the most important federal antitrust lawsuit since the 1998 United States v. Microsoft Corp. case, culminated in a ruling in August 2024. Judge Amit Mehta found that Google had indeed violated Section 2 of the Sherman Act by maintaining its monopoly through anti-competitive practices.
In addition to the DOJ lawsuit, Google is also facing a separate antitrust lawsuit filed in 2023, targeting its digital advertising technologies. The DOJ, along with several state attorneys general, alleges that Google monopolised key digital advertising technologies, collectively called the “ad tech stack,” which website publishers depend on to sell ads and advertisers rely on to buy ads. This lawsuit aims to restore competition in these critical markets and obtain equitable and monetary relief on behalf of the American public.
Anti-Competitive Practices
The crux of the allegations against Google revolves around its use of anti-competitive practices to maintain its monopoly. One of the most contentious practices is Google’s payment of billions of dollars to smartphone makers, web browsers, and wireless carriers to ensure its search engine is the default option on their devices. In 2021 alone, Google paid $26.3 billion out of the $146.4 billion it earned from search advertising to secure these default positions. This practice not only stifles competition but also creates a feedback loop that reinforces Google’s dominance by giving it access to more data, which in turn improves its algorithms and search results.
Another anti-competitive tactic involves Google’s acquisition of potential competitors. Over the past 15 years, Google has neutralised or eliminated ad tech competitors through acquisitions, further cementing its dominance in the digital advertising market. By integrating these acquired technologies into its own ad tech stack, Google has made it increasingly difficult for other companies to compete.
The Impact on Consumers and Competitors
Google’s monopolistic practices have far-reaching implications for both consumers and competitors. For consumers, the lack of competition in the search and digital advertising markets can lead to higher prices and fewer choices. Advertisers, for instance, may face higher costs due to Google’s ability to raise prices without fear of losing business to competitors. Additionally, the dominance of Google’s search engine means that consumers are less likely to encounter alternative search engines, limiting their exposure to different perspectives and information sources.
For competitors, Google’s practices create significant barriers to entry and growth. Smaller companies and startups find competing with Google’s vast resources and entrenched market position challenging. This stifles innovation and reduces the tech industry’s overall dynamism.
The outcome of Google’s ongoing antitrust lawsuits will have profound implications for the tech industry and the future of digital markets. If the courts ultimately rule against Google, the company could face significant penalties, including potential breakups of its various business units. Such a ruling would send a strong message to other tech giants, signalling that anti-competitive behaviour will not be tolerated.
