Sarah Grillo, Illustration of a gavel resting on a Google logo, in Sara Fischer, Exclusive: Google files motion to dismiss Gannett’s ad tech lawsuit, Axios (2023), https://www.axios.com/2023/09/08/google-gannett-antitrust-lawsuit-motion-dismiss (last visited Apr 11, 2024).
Authored by Alexander Gulas
Could Google become the new Standard Oil?[1] The United States Department of Justice and numerous state attorneys general seem to think so, evident by a recent string of antitrust lawsuits filed against the tech giant, arguing that the company is a monopoly in its current form. Google has undoubtedly placed itself in a leveraged position of power over the past twenty years due to its multifaceted domination of the technology sector and partnerships with other large corporations. From the Google Play app store that comes pre-downloaded on most Android phones, to the near-ubiquitous Google search engine, to Google AdSense’s stranglehold on internet advertising, Google has absorbed huge market shares in the technology sector in ways that many believe violate antitrust laws, and whether Google wins or loses these cases, their outcomes are sure to have a massive effect on United States antitrust litigation in the future.
The first of three major U.S. antitrust lawsuits filed against Google, Utah et al. v. Google LLC, arose in 2021 when 36 states and the District of Columbia brought action against Google for anticompetitive policies regarding the Google application market, Google Play Store.[2] The complaint alleged that Google, which acquired the Android mobile operating system in 2005, imposed the use of its Google Play app store through anticompetitive means such as taking up to 30% of the proceeds from Google Play Store sales, disincentivizing competition from other similar app stores, and pre-installing the Google Play Store on select android devices as the only practical means to obtain apps on those devices.[3] As a result, Google Play Store distributed over 90% of all applications on the Android platform, while no other competing app store possessed more than 5% of the market.[4] These anti-competitive strategies and their clearly monopolistic results painted a very negative picture of Google’s approach to the distribution of Android applications. Consequentially, Google decided to settle the lawsuit.[5]
As per the settlement agreement, Google was forced to pay $700 million to consumers and the states and temporarily change their Play Store policies to allow competition from other app stores.[6] This outcome was indicative of Google’s culpability in engaging in anticompetitive practices, and, according to Connecticut Attorney General William Tong, served as “a loud and clear message to Big Tech” that attorneys general were “prepared to use the full weight of [their] collective authority to ensure free and fair access to the digital marketplace . . . .”[7] The attorney general’s warning would not ring hollow, as the U.S. Department of Justice has since filed two separate ongoing lawsuits against Google for anticompetitive business practices: one regarding the Google Search Engine and the other pertaining to Google’s digital internet advertising technology.[8]
The case pertaining to Google’s search engine was filed by the Department of Justice in 2020, which accused Google of monopolizing the search engine market.[9] The suit alleges that Google’s agreements with Apple and Mozilla, which make Google Search the default web browsers on these respective platforms, violate antitrust laws due to the exclusive nature of the agreements.[10] In response, Google alleges that its browser was not actually exclusive and won the competition to become the default browser for Apple and Mozilla based on the “merits as established and judged by its customers . . . .”[11] However, this case is further complicated by the fact that Google’s agreements with Apple and Mozilla also provide the companies with advertising revenue as compensation for making Google Search their default web browser.[12] This factor ties into the other ongoing Department of Justice antitrust lawsuit against Google for their monopolization of advertising technologies.[13]
This 2023 lawsuit alleges that Google has subverted competition in digital advertising technologies through serial acquisitions and anticompetitive auction manipulation[14]. As a result of these practices, Google now owns a 90% market share of website publisher’s ad servers, half of the advertisement exchange market share, and most of the market for buy-side demand platforms.[15] These huge market shares are indicative of Google’s stranglehold on the digital advertising market, and this stranglehold has allowed Google to promulgate anti-competitive policies such as price gouging and forcing the adoption of their advertising toolkit.[16]
While both antitrust cases against Google are currently ongoing and have unclear resolutions, their outcomes will likely signal a seismic shift in United States antitrust litigation moving forward. If Google is to prevail in these lawsuits, some believe it would be indicative of the fact that the “technology ecosystem has outpaced antitrust law.”[17] In the opposite, a DOJ victory could lead to assertions that “antitrust law is being applied and interpreted far too broadly.”[18] Either outcome will undoubtedly have far-reaching impacts on other companies in the technology sector, as it is already a market that has a high barrier of entry due to the high capital requirements, rapid advancement, and constantly evolving technologies associated with it.[19] As such, other conglomerates such as Microsoft and Apple could likely see similar future litigation if Google loses these antitrust cases.
However, if the Department of Justice loses these lawsuits, it could set a precedent that makes it extremely difficult to topple technology-based monopolies moving forward, as Google’s approach of creating multiple discrete businesses to control different areas in the technology sector has become the default strategy for huge tech empires.[20] The Department of Justice has recognized the anticompetitive dangers this approach may pose and has already filed suit against other tech giants for the monopolization of other markets in the technology sector.[21] Therefore, some believe that only fundamental changes to United States antitrust laws can solve the creation of more tech monopolies if the DOJ loses its ongoing lawsuits.[22]
With this in mind, The Department of Justice’s string of antitrust cases against Google may mark a turning point for antitrust litigation in the United States. For years the technology sector has seen unfettered growth, shielded by the complicated nature of their businesses. This growth seems to be coming to a head, with the United States taking increasing exception to the ever-growing centralization of power within the technology sector. As such, the results of Google’s ongoing antitrust litigation may serve as an indicator of how the United States will regulate monopolies in a time where they have become omnipresent.
[1] See Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 81, 31 S. Ct. 502, 524, 55 L. Ed. 619 (1911) (holding that the company formerly known as Standard Oil, a major 20th century oil conglomerate owned by the Rockefeller family, violated the Sherman Antitrust Act due to anticompetitive practices and its formation of a monopoly).
[2] See State of Utah et al v. Google LLC et al, No. 3:21-cv-05227 (N.D. Cal. July 7, 2021).
[3] See Compl., ¶¶ 2, 3, 4, 9, 10, 62, Utah v. Google, No. 3:21-cv-05227 (N.D. Cal.).
[4] See id. ¶ 10.
[5] Google to pay $700 million in settlement over Google Play Store lawsuit: AG, NBC Connecticut (Dec. 19, 2023 4:49 PM), https://www.nbcconnecticut.com/news/local/google-to-pay-700-million-in-settlement-over-google-play-store-lawsuit-ag/3175319/
[6] See id. (requiring Google to pay $630 million in restitution to consumers who made purchases on the Google Play Store and $70 million to the states for their sovereign claims, while also prohibiting Google from entering contracts requiring the Play Store to be the exclusive, pre-loaded app store on device home screens, reduce warnings regarding the download of third-party applications, and submit compliance to an independent monitor for at least five years).
[7] Id.
[8] See Press Release, Department of Justice, Justice Department Sues Google for Monopolizing Digital Advertising Technologies (Jan. 24, 2023), https://www.justice.gov/opa/pr/justice-department-sues-google-monopolizing-digital-advertising-technologies [hereinafter DOJ Google Press Release]; see also John Villasenor, A primer on some key issues in U.S. v. google, Brookings (2023), https://www.brookings.edu/articles/a-primer-on-some-key-issues-in-u-s-v-google/ (last visited Apr. 11, 2024).
[9] See Villasenor, supra note 8.
[10] See id. (indicating that these agreements may be exclusionary to other browsers).
[11] Id.
[12] See id. (indicating that Google’s interconnected operations support each other).
[13] See DOJ Google Press Release, supra note 8.
[14] See id.
[15] See id.
[16] See id.
[17] See Villasenor, supra note 8.
[18] Id.
[19] See Tech talk: Overcoming market entry barriers with access to technology, FasterCapital (2024), https://fastercapital.com/content/Tech-Talk–Overcoming-Market-Entry-Barriers-with-Access-to-Technology.html#:~:text=The%20tech%20industry%20is%20characterized,necessary%20technical%20expertise%20or%20understanding. (last visited Apr. 11, 2024) (outlining the barriers of entry in the tech industry).
[20] See Challenging Big Tech, SOMO (2024), https://www.somo.nl/our-work/sectors/big-tech/#:~:text=They%20have%20relied%20on%20and,for%20different%20communities%20to%20interact. (highlighting how big tech companies rely on network effects and immense data collection to ensure consumers must use their products).
[21] See Press Release, Department of Justice, Justice Department Sues Apple for Monopolizing Smartphone Markets (Mar. 21, 2024),https://www.justice.gov/opa/pr/justice-department-sues-apple-monopolizing-smartphone-markets (“Apple’s Broad-Based, Exclusionary Conduct Makes It Harder for Americans to Switch Smartphones, Undermines Innovation for Apps, Products, and Services, and Imposes Extraordinary Costs on Developers, Businesses, and Consumers”).
[22] See AI Now Institute, Antitrust and competition: It’s time for structural reforms to big tech, AI Now Institute (2023), https://ainowinstitute.org/publication/antitrust-and-competition (last visited Apr. 11, 2024).
American Journal of Trial Advocacy 