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The ongoing antitrust enforcement against Alphabet may be the most significant since the breakup of the Bell companies in 1982 and likely has global implications for information communications technology markets. The US Department of Justice (DOJ) and Google are scheduled to meet September 6, 2024, for the remedies phase of the proceeding and to discuss steps to restore competition.
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The case, US v. Google LLC was brought by the Trump DOJ in 2020, alleging that the company violated Section 2 of the Sherman Antitrust Act with an illegal monopolization of the search engine and search advertising markets, notably with pay for placement deals with Android and Apple devices.
This is just one of many cases facing the company around the world. To put this into perspective, Strand Consult is pleased to feature global competition expert Christian Bergqvist who has analyzed more than 100 antitrust cases against the company The following appears courtesy of ProMarket at the University of Chicago Stigler Center which hosts Bergqvist’s articles on this topic.
Bergqvist identifies at least 100 antitrust cases against Google in 23 international jurisdictions. He categorizes the cases into 8 groups (Search/Shopping, Android, Play, AdTech, AdWords/AdSense, JediBlue, Scraping, and Follow On Damages) and shows how these prosecutions could have potentially transformative consequences for Google and the entire tech industry.
Interestingly, 86% of these investigations fall into the eight categories, and while all add to the negative narrative surrounding Google’s business practices, only two categories seem to have potential to affect Google’s business materially—AdTech and the Helena World Chronicle scraping case in which publishers challenge Google’s practice of scraping news and content from their pages to enrich Google search results.
Antitrust enforcement in the US in underway with cases from the US DOJ and Attorneys General among the 50 US states. Authorities in the European Union and United Kingdom have brought significant cases as have South Korea, Japan, South Africa, Brazil, Australia, Turkey, and other countries. While the number of cases and their content are likely unknown to all but Google, this blog provides a helpful primer.
Summary of 100+ Antitrust Cases Against Google Globally
By Christian Bergqvist
Google’s behavior in Ad Tech—its clearing platform where businesses can buy and sell advertisement space—is targeted by the U.S. Department of Justice and several states which opened investigations under a patchwork of federal and state antitrust laws in the U.S. The same picture emerges in Europe, with both the EU’s Directorate General for Competition (DG COMP) and national competition authorities in several member states looking into Google’s Ad Tech business.
Interestingly, patterns start to emerge across cases not by jurisdiction or type of infringement, but based on Google’s business segment or service, as in the example of Ad Tech. This reduces the approximately 100 cases down to five categories of cases accounting for 62% of identified investigations. Further segmentation would attribute 25 of the remaining cases to three legal issues, leaving us with only some 13 % of all cases that either don’t squarely fit one of these groups or patterns or where too little information is available to allow for proper evaluation.
A pattern emerges if the cases are grouped by Google’s services
Scaling the 100-plus cases down involved some flexibility, as sources consulted are often limited to brief press releases or news articles, but leaving that caveat aside, Google’s antitrust grievances appear to involve the following services:
1. Google Search (Shopping), where Google directs users to other Google offerings in response to a search inquiry, thus engaging in self-favoring conduct. These cases vary in the specific services subject to self-preferencing: maps, travel, jobs, news, videos, or shopping. Except for Turkey (2020 and 2021) and possibly Russia (2022), Google appears to prevail when only self-favoring is involved. The United States Federal Trade Commission’s decision (2012) not to pursue a case is an example of the latter, as the FTC found it unlikely it could prevail on a self-favoring theory of harm considering the obvious consumer benefits from the blended search results. The EU concluded differently (2017), but only after uncovering how Google also (maliciously) downgraded competing offerings, advancing the case on a blended theory of harm. The case is pending appeal, and a final ruling is expected in 2024.
2. Google Android, where Google makes the Google Android Operating System (OS) available for free for smartphone manufacturers subject to Google services preinstallation, including Chrome and Search. Sometimes, Google sweetens these deals with financial incentives, e.g., a cut of the advertisement revenue, and through this, Google has been able to secure default status. Google’s actions have been characterized as exclusionary tying and have been condemned in the EU (2018), South Korea (2021), India (2022), Turkey (2018), and Russia (2016), but not in the U.S. (2012). Several of these cases are pending appeal, and investigations are also still pending in Brazil, India, and Japan.
3. Google Play, where Google’s terms for access to the Google Play Store are deemed unreasonable or exclusionary. Google Play Store is used to download and install apps on Android smartphones, and Google allegedly (ab)uses its “gatekeeper role” to extract unreasonable fees from publishers and mandate the use of Google’s in-store payment system. This has caused Google’s “victims,” such as Epic Games, to launch successful claims in the U.S. (2023), South Korea (2023), and India (2022), with additional cases pending in the U.S., EU, U.K., Chile, and probably also Australia.
4. Google AdTech, where Google allegedly monopolized online ads auctions and might have failed to secure the best prices for its customers. The latter are publishers and advertisers, selling and buying online spaces respectively over an ad exchange. Several investigations have been opened, including in the EU, France, India, the U.S., and Turkey, but only the French case (2021) has been finalized, condemning Google’s action. Unusually, Google has not filed appeals, allowing this to form the basis for damage claims in the U.K., Germany, and France.
5. Google AdWords/AdSense, where Google coerces publishers to rely exclusively on online ads managed by Google or, in other ways, complicate the interaction with non-Google offerings. Only the EU (2019) has found Google liable, while the investigations were dropped by the enforcers in India (2011 and 2018) and Brazil (2018). Google has appealed the EU’s findings.
Abuse of dominance cases typically do not require outlining an anticompetitive motive, but doing this nevertheless helps in understanding a case, and here, based on the available materials, several appear to be at play. Google Search/Shopping and Google Ad Tech involve the classic EU competition theories of leveraging adjunct services to either monopolize other services or improve the experience of a core service (search) by integrating maps, jobs, or news, ultimately making alternatives unattractive and ringfencing the existing monopoly. Google Android and Google Play involve bundling of services and thus also leveraging, but Google Android has a more complex motive. Following the proliferation of smartphones, users had started to migrate away from desktops to access internet search, making it imperative for Google to become the default option here.
Google’s policy of making the Android OS available for free but subject to pre-installation of certain Google features served to secure Google’s position in the market. Interestingly, this also appears to be Google’s motive for paying $26.3 billion annually (2021) to be the default search engine in browsers like Safari and Firefox (a case whose exclusionary tying objective is akin to the cases under the Google Android category but whose patterns are unique and place it in its own singular category). Figures uncovered during one of the U.S. DOJ’s recent cases include how Google paid $18 billion to Apple for the privilege of being the default search option on iPhones.
Further segmentation is possible by looking beyond the business or service.
While the five services listed above account for 62% of the identified cases, many of the remaining cases can also be grouped into distinct categories according to their subject matter. It appears that another group, accounting for 25% of Google’s antitrust conflicts, involves one of these issues:
6. Jedi Blue, where Google has concluded revenue-sharing agreements with Meta to keep Meta part of its Open Bidding program for ad services instead of setting up its own bidding service for its platforms. Very little is known, but apparently, enforcers and plaintiffs analyzed whether the arrangement involved some form of quid pro quo understanding, where Meta (called Blue) would get a piece of Google’ (called Jedi) pie or other advantages in exchange for abstaining from competing in online display advertising and related intermediary services. This would make the agreement horizontal and akin to a traditional (and highly illegal) market-sharing agreement. Despite the use of obfuscating codenames and other telltale efforts to keep the agreement secret, no misdeeds have been found. In the course of 2022 and 2023, the parties were exonerated in the U.K., EU, and U.S., and only Brazil appears to have an open investigation.
7. Scraping, where Google “steals’” content from publishers. While more akin to an intellectual property infringement, Google (allegedly) coerces publishers into accepting scraping, adding an abusive element. Google has prevailed so far, but the matter was taken up a notch in December 2023, when a group of U.S. publishers (led by Helena World Chronicle) challenged Google’s practice of enriching its search results with pictures, generic information, or an AI-generated reply. This denied traffic to the pages where the image and text originated, starving the publisher of view and advertising opportunities. Based on this, the publishers claim that Google aspires to monopolize online services.
8. Follow-on damages, based on some of the cases that have ended unfavorably for Google. This includes the EU’s Google Shopping (2017) and the French Ad Tech (2021) cases, both forming the basis for claims in the U.K., Germany, Sweden, and the Czech Republic. Claims in the U.K. have also been filed based on the EU’s Google Android, and here, stand-alone claims about Google Play are also pending. None has been finalized.
The remaining cases, accounting for 13% of all cases, cannot fit into the above categories. Partly because the available information is limited but also because many of these investigations do not end with a finding of an infringement and, therefore, remain unpublished. These unique examples include the U.S. cases involving alleged suppression of conservative voices online (the Freedom Watch case) or the attempt to designate Google as a common carrier (the Ohio case). The presiding courts rejected both, and it’s difficult to see them fitting any known and accepted antitrust theories of harm.
Nevertheless, some of these non-attributable cases yield notable elements feeding the larger picture. This includes the very handsome payments to Apple and others for default status on smartphones, a policy uncovered during depositions in one of the U.S. DOJ’s pending cases, and part of the leverage strategy seen in Google Android, where Google takes active steps to remain to default option regardless of platform.
Some thought of the merits of these cases
Properly evaluating the merits of this broad array of different cases, including pending investigations, based solely on public sources, is impossible. Nevertheless, it does look like enforcers take inspiration not only from the many tech reports from agencies, and House Sub-committees outlining Google’s alleged misdeeds but also from cases brought in other jurisdictions. This makes sense, as reports are often based on empirical market data or facts and cases often provide guidance for similar monopolization or dominance legal frameworks. This also means that regardless of the outcome, other agencies and even private plaintiffs will piggyback on these statements and findings once a leading agency opens an investigation. The most salient example of this is how the EU’s Google Search/Shopping (2017) has motivated enforcers in the U.S., U.K., Turkey, Russia, Hungary, Germany, Brazil, South Africa, and India to investigate the matter of abusive self-favoring in the subsequent years.
Likewise, France’s initial investigation into Google Ad Tech (2021) led to a floodgate of cases. Agencies also learn from each other in bringing these cases. For example, the EU appeared to take stock of the U.S. FTC’s unsuccessful (2012) investigation of Google Search, adjusting the theory of harm to include the malicious downgrading of competing offerings rather than running solely with self-favoring as their U.S. counterpart did. It even looks like the current wave of U.S. Google investigations might be influenced by the successful advancement of cases in Europe.
How will the cases impact Google?
While most of the cases look embarrassing and damaging to Google’s reputation, they seem manageable despite potential fines and possible claims for damages, which should not significantly impact Google’s ability to do business. Moreover, be it through its own effort and skill or anticompetitive conduct, Google has, in effect, acquired a position that insulates its business in several services. Google’s business conduct, questioned in the Google Android cases, for example, served to protect Google Search as the preferred option regardless of whether a PC, laptop, tablet, or smartphone served as the medium for an internet search.
Nevertheless, two case types might be more troublesome in terms of impact on Google’s business case and gatekeeper position. This is, first and foremost, the Ad Tech cases, where Google is under investigation for monopolizing attempts in ad tech. The latter is used to manage online campaigns and involves connecting two groups, publishers and advertisers. Google often represents both groups and owns one of the marketplaces used to clear their bids, creating an inherent conflict of interest. This can be challenging to resolve unless Google is broken up: an outcome that obviously would be unpleasant for Google. Moreover, the claims for damages could be particularly large if Google, as indicated in the French case (2021), fails to secure the best prices for its customers.
Another case that also could end badly for Google is the Helena World Chronicle scraping case pending before the U.S. District Court for the District of Columbia. Here, publishers have taken issue with Google’s practice of scraping content from their pages and enriching Google search results with pictures, information, or a direct reply to a formulated question. The ability to do this is not only what has made Google Search the superior solution we rely on 90% of the time but also an essential part of Google’s current attempt to integrate artificial intelligence and chatbots into its search engines.
In principle, this is a traditional IP case, in which Google no longer directs users to the published online sites but instead republishes the information in Google’s search, thus denying the publishers traffic and, ultimately, the ability to sell online ads. However, the case has morphed into a question about monopolization regarding digital news and reference publishing, which Google allegedly aspires to achieve. T
hese questions of monopolization are not only difficult to settle but also could create obstacles for Google AI-ambitions, as this is highly dependent on the ability to extract information from others for the purpose of training the algorithm. The inability to do this could have commercial consequences for Google, as Microsoft is the leader in AI, and Google needs to catch up to remain relevant.
Credit: Strand Consult
