Experts Expect DOJ Will Try Ending Google’s Search Deal With Apple
DOJ is likely to seek a ban against Google’s default search deals with companies like Apple in the department’s search market monopoly lawsuit against the platform, legal experts on opposite sides of the case said last week. Whether the department can successfully force Google to sell off Chrome or Android is an open question, they said.
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Judge Amit Mehta ruled Aug. 5 that Google has a monopoly over general search services, partly because of multibillion-dollar default search deals with Apple (see 2408050052) (docket 1:20-cv-03010). The U.S. District Court for the District of Columbia scheduled a Sept. 6 status conference to discuss a potential schedule for determining remedies in the case. Google is preparing an appeal. Mehta has the option of staying the remedy stage during the appeal, or he can allow both to move forward concurrently.
Experts expect that DOJ will request a prohibition on deals Google has with Apple and Android manufacturers like Samsung and LG. Chamber of Progress CEO Adam Kovacevich noted how Microsoft and DuckDuckGo argued that default deals have denied them the ability to scale and compete with Google on search. Mehta seemed to largely agree with that argument, said Kovacevich, a former Google executive. Google and Apple are Chamber of Progress members.
No one denies Google holds the “lion’s share” of the search market, said Kovacevich. But the question is how the company has achieved its dominance, he added. Kovacevich said he was surprised Mehta found the deals were “uniquely” responsible for Google’s market share. Google presented compelling evidence of its level of investment in engineering and constant improvements to search, he said: Even Mehta acknowledged Google hasn’t been a “quintessential, lazy monopolist.”
DOJ should pursue a combination of structural and behavioral remedies, Lee Hepner, American Economic Liberties Project senior legal counsel, said during an AELP livestream Friday. He noted how Mehta acknowledged throughout his opinion that AI is the future of search. There was also evidence at trial showing how Google employees acknowledged internally that Chrome has no value to parent company Alphabet except as a distribution mechanism for search. That evidence supports a divestiture and independent monetization of Chrome, he said.
Digital Content Next CEO Jason Kint said the only way of solving the search competition issue is to create a “ringed fence” around the data Google pulls from search and force divestment of Chrome and Android, which are Google’s “key user agents.”
There’s been “tough” precedent against structural remedies in such cases, the DOJ Antitrust Division chief who filed the case told CNBC on Wednesday. Makan Delrahim headed the division under President Donald Trump. He noted how U.S. District Court for the District of Columbia Judge Thomas Penfield Jackson ordered the division of Microsoft into two separate companies in 2000 at the conclusion of the department’s antitrust case against the company. A federal appeals court unanimously reversed the breakup order, finding the trial judge engaged in "serious judicial misconduct.” It will be several years before the Google case concludes, Delrahim predicted.
Google is facing a separate lawsuit from DOJ claiming it has a monopoly over the advertising technology market (docket 1:23-cv-00108). Kint said the adtech case will likely tie together evidence supporting the need for Google to divest Chrome. Google gained enormous power when it combined its search data with data from sources like Chrome and Android.
News/Media Alliance CEO Danielle Coffey said the media industry would like to see Mehta stop Google from forcing companies to use features that are harmful to journalism business models. She said Google’s AI Overviews, which provides users with a quick summary for search queries, is harmful to journalism outlets because the feature means users don’t need to click through the original source of the information, eliminating web traffic for news outlets.