It’s official: making the best available search engine the preset default is now illegal.
On August 5, a federal judge ruled that Google is a monopoly and violated Section 2 of the Sherman Antitrust Act through its search distribution agreements. In these agreements, browser and device companies award Google’s search engine with preset default placement in exchange for a share of the search ad revenue or the license to use Google’s proprietary mobile applications. This “exclusionary” nature allegedly constitutes anticompetitive conduct — except, in reality, no one is being excluded. The court’s ruling is another manifestation of the Justice Department’s crusade against Big Tech.
The court applied the exclusive dealing framework for the 2001 Microsoft antitrust case to form its ruling. The trouble is, Google’s circumstances are vastly different. In the Microsoft lawsuit, Microsoft was similarly found guilty of violating Section 2 of the Sherman Act by bundling its Internet Explorer browser with its Windows operating system. However, a critical difference is that whereas Microsoft’s case happened against a reasonably nascent, burgeoning digital ecosystem, Google’s case occurred at the height of the age of technology.
In 2023, 95 percent of Americans are using the internet compared to only 54 percent in 2001. The average person’s digital literacy and common knowledge related to technology have drastically expanded. Access to information has never been easier or more abundant. If people don’t know how to do something — like change their default search engine — then finding an online tutorial is a search and a few clicks away. If a person wanted to change the default engine away from Google, they probably would.
Clearly, the conditions around exclusive dealing in Microsoft and Google’s cases are untranslatable: Installing a fringe internet browser in 2001 is not the same as changing the default search engine setting in 2024. In fact, many people can and do change their default search engine, and it’s a straightforward process. The case document reveals that when Mozilla’s Firefox browser tested Google’s rival Bing as the default search engine from 2021 to 2022, over a third of users changed their default, mostly back to Google.
If other firms provided a competitive product, pulling users away from the default would not be the insurmountable “market reality” that Justice frames it to be. A 2020 survey finds that a third of Americans would switch their default search engine if an alternative provided better quality results or if it didn’t collect personal data. As far as current search engine offerings stand, Google is still the best.
Today, Google boasts the industry’s highest-quality search engine and is widely recognized as the best search engine in the United States. The company has earned its status as the king of search through its superior quality and ability to monetize queries. For partners selecting a default search engine to maximize customer satisfaction and users selecting a search engine to best execute their search needs, Google is the obvious choice. Instead of viewing sticking with the default as passive behavior, Justice should acknowledge that keeping Google as the default is a valid, active choice in its own right.
Here’s the icing: Despite Justice deeming Google’s distribution agreements anticompetitive, the court failed to find convincing evidence of resulting anticompetitive effects, like deterring Google from innovating. Google has consistently invested in innovation, resulting in new products and features that have transformed search over the last 15 years and undoubtedly contributed to its dominance. In a rapidly advancing industry like tech, where innovation is critical to remain on top, any claim that Google “lacks incentives to innovate” is absurd.
In fact, we are already seeing competition and the beginning of a potential shakeup in the search industry without Justice’s intervention. Microsoft has invested nearly $100 billion into search over the past two decades, which may finally be paying off. In the past year, Bing has seen an increase of 40 million users daily, partly due to its integration of AI and features like Copilot. Its recent earnings release reflects this positive turn, reporting a 19 percent increase in the company’s search and news advertising revenue. Microsoft is not affected by any market foreclosure, and Google’s search distribution agreements and market dominance have not diminished its rivals’ incentive to invest and innovate.
This unsubstantiated ruling against Google underscores Justice’s bias against Big Tech and its propensity to meddle to uphold a short-sighted ideal of competition. Justice’s interference will result in picking winners and losers, and in this case, Microsoft may be in luck.
