Google faces allegations of being an illegal monopoly in the search engine market

What is the first thing that comes to mind when searching for anything online? Google! Google has created a dominant position in our mind, that we replaced the phrase “search online” with “Google it.” Google contains 91.62% search engine market share. And now, it is facing the serious accusation of holding an illegal monopoly in the search engine market.

Illegal Monopoly Accusation Allegation on Google

The US Department of Justice (DOJ) accused Google of upholding an illegal monopoly in the search engine market. The DOJ said that because of the monopoly of Google, the fair competition between the tech giants is not maintained. The DOJ also added that Google is creating deals with device manufacturers and web browsers every year to be the default search engine.

The Justice Department’s second monopoly case against Google is beginning trial on Monday in a Virginia court, with federal prosecutors taking aim this time at the internet giant’s lucrative business as the middleman for online ads.https://t.co/rMcYS87EfR

— The Washington Post (@washingtonpost) September 9, 2024

In mobile devices, the Android operating system is widely used. The third-party companies that manufacture the mobile devices have to take the “Android” license and logo from Google. the Android system is an open-source software that was initially developed by a group of 84 technology companies, called the Open Handset Alliance.

Google took a commercial role in sponsoring the Android operating system. Here, Google has created a monopoly position through the Android Compatibility Program. The Android manufacturing companies who want to add Google apps and services like Google Play, Gmail and more, need to adhere to the compatibility requirements set by Google.

Moreover, the device manufacturer who desires to gain a licence on Google apps and services needs to sign the agreements of Android Compatibility Commitment (ACC). Several device manufacturers including Samsung, LG, Sony, Asus, Xiaomi and the like come under the ACC agreements of Google.

The DOJ also said that Google has created a cycle of dominance in the search engine market. In this cycle, Google paid billions of dollars to device manufacturers like Apple, Mozilla and others to be the default browser. Henceforth, in devices like iPhones and browsers like Firefox, Google is the default search engine.

A new case of monopoly advertising against Google

A new case of monopoly advertising marketing is unfolding as the DOJ, along with 17 states has filed a lawsuit against Google. The DOJ said that the parent company of Google, Alphabet, is monopolizing key digital advertising products.

Last year Google’s ad revenue was around $237 billion. The main source of the ad revenue was the Google Ads platform. From search advertising, the majority of the Google’s ads revenue is generated. Even with around 84% global desktop search traffic, Google is responsible, which highlights its monopoly position.

In hearings ahead of its coming adtech monopoly trial, Google was reprimanded by a judge for deleting evidence and other shady legal tactics.

Google called their history-off chats "Vegas," as in "What happens in Vegas stays in Vegas."

The judge called them "foolish." (1/3) pic.twitter.com/fIZbhNgOQx

— American Economic Liberties Project (@econliberties) August 30, 2024

In an opening statement, Julia Tarver Wood, DOJ lawyer, said “One monopoly is bad enough. But a trifecta of monopolies is what we have here.” The DOJ also alleged Google that it also has a dominant role in the ad exchange market. Google has built, acquired and maintained a monopoly over the technology market that connects online publishers with advertisers.

The government also claims that Google takes 36% of every dollar spent on ads. Thus, by taking substantial profit from the ads, Google intends to reduce the publisher’s profit and increase the advertiser’s costs. Henceforth, by maintaining a monopoly in all the ads transactions, Google limits the fair competition in the digital ad market.

The prosecutor said that with the monopoly position in the digital ad market, Google runs 150,000 online ad sales every second. Another statement from Julia Tarver Wood said, “Google is not here because they are big, they are here because they used that size to crush competition.”

Critics and competitors view of Google’s illegal monopoly

Several critics and competitors of Google, have suggested different ways to stop Google’s illegal monopoly. In the suggestions, Google has been recommended to split off some important portions of their business. Splitting off businesses refers to separating the use of Chrome web browser, Android operating system from its core search engines. These suggestions are under review by the government and Judge Mehta.

DuckDuckGo, one of the small search engine firms, claimed that Google’s dominance has negatively impacted their service. DuckDuckGo proposed to ban the agreement of making Google the default search engine on devices.

DuckDuckGo also said to implement user-friendly screens for users. These screens will allow users to easily switch between search engines. In this way, users gained the capability of exploring alternatives to Google.

Moreover, the government is looking for Google to divest specific ad tools. These tools are specifically those tools that manage text ads within search results. The government wants to divest these tools to make the ads market more competitive and provide users with cost-effective options for choosing ad platforms.

Google’s response against the case of monopoly

In a statement, Google denied the allegation of the DOJ against them. Google highlighted their past acquisition of DoubleClick (2008) and Admeld (2011) which was cleared by the regulators during that period. Here, Google argues that these deals helped them to enhance their services by expanding the ad offerings and support to the publishers.

Google also mentioned in that statement that these deals were found to not create any competitive harm by the DOJ and the Federal Trade Commission. Google argues that the digital ad industry has been contributed by large companies like Microsoft, Amazon, Apple and others.

In a blog, Google denies the allegation of a monopoly position by highlighting that the advertising technology provides value to advertisers and publishers by offering them to choose from 80 other rival platforms. Publishers often use multiple platforms rather than Google’s and keep the majority of revenue generated. Henceforth, Google believes that its ad tools increase options and improve efficiency rather than generating a monopoly. 

Google mentioned that the DOJ also needs to consider the growing competition in the advertisement industry. Microsoft’s acquisition of one of the advertising platforms Xandr helped to secure a major deal with Netflix. Apple’s fast-growing advertisement business is expected to reach $30 billion in the upcoming four years. Amazon’s growth in the advertisement sector is faster than Google and Meta.

Against the lawsuit of the DOJ, Google argues that it might impact the advertising sector negatively by reversing years of innovation in ad tools. This can negatively impact the benefits of advertisers, publishers and the US economy. Google asserted that breaking up their 15 years of investment in ads tool, which was previously approved by regulators, is unjust and could harm the web ecosystem.

Search engine market size

The market size of the global search engine market is around $167.02 billion as of 2023. It is expected to reach $185.4 billion by 2024 and $429.8 billion by 2032. In this market, Google has maintained the top position with 91.62%, and Microsoft Bing the second position with a share of 3.31%.

There are several other platforms available in the search engine market. Yandex occupied 1.84%, Yahoo occupied 1.08%, Baidu occupied 0.77% and DuckDuckGo occupied 0.53%.

Microsoft Bing collaborated with ChatGPT to make their platform more competitive. As a result, between February 2023 and February 2024, the market share of US search engines for Bing boosted from 6.35% to 7.87%. During that period, Google faces a decline in the US search engine market. The market share of Google in the US dropped from 88.96% to 87.36%.

As of the report of 2023, in Russia, 63% of internet users use Yandex, and 36% of users use Google. In China, Baidu is the most used search engine instead of Google. Whereas, in Mexico and Japan, Yahoo is the most used search engine. In the UK, Bing occupied the second position after Google in terms of the use of search engines.

Google monopoly position

Google has maintained a monopoly position in the desktop search market with a share of around 81.95%. Conversely, Microsoft Bing has occupied 10.51% and Yahoo occupied 2.67%. Alphabet, the parent company of Google has a market share of $1.6 trillion. The company has expanded its venture through mail, enterprise products, mobile devices and more.

Google’s algorithm has helped them to offer an efficient and faster search option to people around the world. Google has created the position of the go-to search engine in people’s minds because of its relevant search results. Although Bing, Yahoo and other search engines are competing with Google, Google’s dominant position is creating struggles for its rivals.

Google has created a product and service cycle that offers seamless integration across its various platforms. Google provides searches in the form of articles, videos, blogs, patents, music and more. It has creation platforms like blog hosting, video creation, file creation, ad creation and more. Google has storage services including documents, videos and more. Google also offers translation services, web browsing office services, education services and more.

Google is continuously investing in innovation. They invest $100,000,000 in grants annually so that bold changes can be brought. To stay one step forward from its competitors, the company is spending over $100 billion on AI development. Even they invest $2 billion in AI company Anthropic to stay ahead in the AI race.

For instance, the company has spent more than $75 million on the AI Opportunity Fund in the US. Through this fund, Google is working with education, nonprofits and other sectors to train one million Americans and help them to implement their AI skills.

With continuous investment in innovation and development, and innovation and relevant services, Google has created a dominant place in the search engine market. Moreover, by investing in OpenAI’s rivals Anthropic, Google set a strong position against Microsoft.

Other search engines

Bing-

Bing is a search engine offered by one of Google’s rivals Microsoft. Bing search engines included web, video, image, map search and more. It has the support of OpenAI to make its search engine more relevant and efficient.

Yahoo-

Yahoo is primarily known for its search engine and web portal. Since 1994, it evolved into a full-fledged web portal. Now it offers services like web search, email (Yahoo! Mail), sports, entertainment and more. Despite facing fierce rivalry from Google, in some countries, Yahoo remains a popular choice for users who want to have a broader experience beyond search.

Yandex-

Yandex specialises in Internet-related products and services. It is a Russian multination search engine company. Founded in 1997, Yandex has been offering image search, web search, video search and more.  The Yandex.Mail, Yandex. Maps and others are popular platforms offered by Yandex.

Baidu-

A Chinese search engine company is Baidu which is often referred to as “China’s Google”. It has services like image search, video search, web search, news, articles and more. In China, Baidu has occupied a 52.15% market cap for platforms and a 67.74% share in mobile devices. 70% of searches in China are completed through Baidu.

DuckDuckGo-

DuckDuckGo is an independent search engine company still it’s established in 2008. It is popular in the market because of its commitment to saving user privacy and offering alternate search engines like Google. It also has a mobile app through which it helps users to search on the internet without tracking their search activities.

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