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Monday, November 2, 2020

The Glaring Flaw Plaguing the Department of Justice’s Lawsuit Against Google

Spoiler alert: Google isn’t harming consumers.  

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The Department of Justice recently unveiled an antitrust lawsuit against Google accusing the company of anticompetitive behavior in the search engine market. If successful, the lawsuit could fundamentally reshape the internet—at the American consumer’s expense. 

The DOJ claims that Google retains 90 percent of general search inquiries in the United States and 95 percent of mobile device searches. It claims this dominance is possible because Google pays everyone from Apple to AT&T and Mozilla to ensure that it is the default search engine within their products.

Yet this is evidence of competition, not anticompetitive behavior. A true monopoly would not need to pay other companies to promote its services. And Google doesn’t force companies to have their web browser as their default; it’s a win-win for all.

If Apple decides to use a different search engine, such as Bing or DuckDuckGo, they’re well within their rights to do so. However, since users largely prefer Google, Apple runs the risk of losing customers. The DOJ will have a tough time arguing this behavior is anticompetitive when it’s merely companies looking out for their bottom line. 

Furthermore, the DOJ faces an uphill battle with the current standard that they’ve used in antitrust cases since the 1970s: the consumer welfare standard. As I previously defined it: 

This standard… seeks to ‘evaluate mergers and practices of businesses to determine if they harm the economic welfare of people. If they do, then regulators can step in to either prevent the merger or work out an agreement to remove the harm.’ Note that the standard does not punish a business simply for being big, only for harming people’s economic welfare. And firm size is not a legitimate indicator as to whether or not consumer welfare will be jeopardized.

With this standard, the courts shifted their focus to the consumer, the most crucial aspect when determining what constitutes anticompetitive behavior. How will the DOJ prove that consumers are worse off from having Google’s services at their fingertips entirely for free? 

Spoiler alert: Google isn’t harming consumers.  

Google allows consumers to surf the web, watch videos, create and manage calendars, conduct surveys, and create various types of documents—all for free. Proving consumer harm will likely be the largest hurdle the DOJ faces. 

The DOJ clearly thinks that consumers are trapped into using Google or are incapable of figuring out how to switch their default choices. But the reality is that consumers are simply happy with the services it provides. (Hence why the app is one of the top applications in Apple’s store.)

Google shouldn’t be punished for the monumental success it has had providing goods to Americans. If consumers are intent on changing their browser, they can look up how to change it. Google (or another web browser) will happily provide the results with a simple search query, and even show videos with simple explainers on how to do so. 

But the reality is that there may not be room for many search engines or browsers in this market. Microsoft seems to understand this, as it recently announced it intends to cease supporting Internet Explorer, the once-dominant web browser that landed the company in the antitrust doghouse almost 20 years ago. 

This example offers a stark reminder that market dominance is rarely permanent. Using the term “monopoly” against Google is turning a blind eye to the truth: Google is just the best at what it does. 

If we want more competition, maybe it’s time for newer technologies to create something altogether different. In the meantime, Americans should be skeptical of a lawsuit weaponizing government power for political gain.

  • James Czerniawski is the Tech and Innovation Policy Analyst with the Libertas Institute, a free-market think tank in Utah, and a Young-Voices associate contributor. His work has been featured in The National Interest, The Salt Lake Tribune, The Washington Examiner, and many others. Follow him on Twitter @JamesCz19.