The Google Search Case: A Remedy Searching for an Ailment

In August of 2024, Google was found guilty of illegal monopolization of the market for online search under Section 2 of the Sherman Act. The follow-up trial is currently in progress, where the court will determine what remedy it deems appropriate to restore competition in the affected market. The difficult task now before the court is to find a remedy that addresses the actual anticompetitive conduct Google was found guilty of without causing more collateral harm than good.

The main point in the Department of Justice’s (DOJ) case against Google that Judge Amit Mehta agreed with was that Google’s contracts with other companies to feature its search engine as the default in their browsers or mobile operating systems in exchange for a cut of the ad revenue were an unlawful restraint against competition in the online search market. Generally, a monopolization case should have to prove that “but for” the anticompetitive conduct at issue, other competitors would enter and create a more competitive market. Instead, the court’s decision—which relies heavily upon the logic of the Microsoft decision from 2001—decided it was persuasive enough to “reasonably assume” that rival products like Microsoft’s Bing search engine would have eaten away at Google’s monopoly if not for the search default contracts Google negotiated.

The president and founder of the International Center for Law and Economics summarized it best: “By relieving the plaintiffs of having to show but-for causation, Judge Mehta relieved them of the burden of proving their case.” The problem with this is that it allowed the court to establish Google’s liability free from considering what, if anything, the court could actually do to fix the alleged problem. As it turns out, while most of the more reasonable proposals for a remedy may benefit Google’s rivals, they do not promote consumer welfare.

One major knock against the court’s decision is that Google’s default contracts are not actually exclusive. Switching the default search engine on any web browser or mobile device is as easy as a few taps or clicks, yet the decision found Google’s default deals to constitute insurmountable anticompetitive conduct in the face of evidence that it is also a demonstrably superior product. For example, a European Union (EU) mandate forcing mobile devices to present consumers with a pull-down list of default search engines has thus far resulted in almost no loss in Google’s search share.

Meanwhile, a fascinating economic study published earlier this year found that a certain percent of consumers tend to stick to default applications like search engines out of apathy more than active preference for the product. While this means that Google’s default status does afford it some real competitive advantage, the study also showed that switching consumers to a new default—in this case, Bing—imposed a value cost to consumers in reduced quality of results. This tracks with a quote from Apple’s Senior Vice President of Services, Eddy Cue: “We make Google be the default search engine because we've always thought it was the best. We pick the best one and let users easily change it.”    

Meanwhile, the DOJ submitted a list of proposed remedies that aims wildly beyond the issue of Google’s advantage in online search itself. In addition to banning all current and future default-placement contracts for Google’s search engine, the government proposes forcing Google to sell off its Chrome browser (and possibly the Android mobile operating system) and allow competitors to access its search data. The purpose of antitrust remedies should be to address particular harms to consumer welfare and to restore competition in an illegally monopolized market. The DOJ’s remedy request instead seems to want to entirely destroy Google’s software integration in mobile devices—a purely punitive measure divorced from any consideration of consumer preference.

Thus, it seems more likely for the court to dismiss the DOJ’s more outlandish demands and focus on the search default contracts themselves. The problem is that simply terminating these contracts could, at least in the short term, harm the companies Google is paying far more than Google itself—especially smaller companies that derive a larger portion of their revenues from search revenue agreements. In particular, Mozilla derives a majority of its current operating revenues from its contract to feature Google search in its Firefox browser. While Firefox is not a major competitor to Google’s Chrome, Mozilla Foundation operates the open-source Gecko browser platform—the only major browser platform not owned by Google or Apple.

The other remedy the court may consider more seriously is the DOJ’s demand that Google make several of its key datasets, including U.S. search queries, available to competitors at a reasonable cost. An analysis of similar data-sharing mandates under the EU’s Digital Markets Act concluded that they penalized successful firms while encouraging “rent-seeking, free-riding behaviors at the expense of incentives to innovate” among their competitors. Moreover, data like search queries, while anonymized, can be easily re-personalized and pose a real cybersecurity and consumer privacy risk if it were to get into the wrong hands.

But since the courts have to propose something at this point, they could force Google to adjust its contract terms rather than forbidding search default contracts altogether. For example, the court could limit the duration of the contracts and force Google to allow partners the ability to cancel at any time without cause or consequence. It could also allow default contracts with smaller partners like Mozilla while forbidding them with larger competitors. The DOJ also proposed forcing choice screens for a default search engine and browser to pop up when activating a new device (although, as mentioned earlier, similar mandates in the EU have proven ineffective).

The problems posed by even the most calculated remedies raise the question of whether the case itself actually benefits consumer welfare as opposed to merely serving Google’s competitors.