30 Fast Facts About the Google Antitrust Case
April 3, 2015
- The Google Antitrust Case: Is Google violating antitrust laws by using its search dominance to favor its own products in search results over competitors? The Federal Trade Commission (FTC) is trying to decide whether or not to sue Google for antitrust violations. A final decision about whether to pursue an antitrust case is expected before the end of the year.
- In addition to the U.S. Government and European antitrust investigations, there are a number of private lawsuits by Google rivals that make claims of unfair competition or antitrust violations against Google.
- There is no argument that Google runs the world's most popular search engine, with 67% of the market. But has this market dominance been obtained through antitrust violations?
- The government’s escalating investigation into Google’s search practices is the most far-reaching antitrust investigation of a corporation since the federal case against Microsoft back in the late 1990s.
- The ongoing Google investigation mirrors Microsoft’s case in some key instances. Complaints against Microsoft grew rampant when it began to expand business outside of personal computing, just as Google has earned criticism as it extends outside the search field.
- FairSearch conducted a survey that found nearly 80% of Americans favor the FTC's investigation of Google "for restricting fair competition and misleading consumers." But is Google truly in violation?
- Consumer reviews website Yelp and comparison shopping website Nextag have both made complaints about Google during open hearings in Congress.
- About Antitrust Violations: Antitrust laws are in place to prohibit unfair business practices and ensure monopolies don't exist for any given industry.
- Monopolies Aren’t Illegal: It's not illegal to have a monopoly; it is only a violation to become a monopoly through anti-competition means. This would be an important distinction in a Google antitrust lawsuit.
- Google’s defense: Google claims it has earned search dominance because of its superior product, not because of anticompetitive methods.
- Microsoft was accused of anticompetitive practices with its bundling of Internet Explorer and Windows.
- Argument #1: Google Flight Search. Google has a number of search services, such as Google Flight Search, that compete with airfare shopping sites such as Kayak, Expedia, and Travelocity.
- Against Google: Some say Google is unfairly referring traffic to its own vertical sites, ranking them above competitors, and thereby violating antitrust or fair competition rules.
- Google Defense: Danny Sullivan of Search Engine Land argues that when users search for flights on Google, they are getting what they want: a list of airlines and prices.
- Sullivan agues that if Google were required to favor listings of competitors like Expedia or Travelocity in search results, consumers would be forced to do more work, since they would be directed to another flight search engine on the competitor’s site, instead of quickly receiving the flight information they were seeking.
- Argument #2: Google Shopping. In Google’s new shopping search feature, only paid Google advertisers are listed.
- Against Google: Rivals complain that consumers are not being shown the best available shopping results, and that this kind of search setup forces competitors to pay to appear in Google Shopping, since the lion’s share of clicks and traffic happen to the first few spots of a SERP, where Google Shopping shows its results.
- Some say this turns Google into an internet mob boss, to which companies must pay money to simply be given a fair chance of competing.
- If companies don’t pay up, they could lose traffic, revenue, and go out of business, which would result in consumers having fewer options for comparing restaurants, flights, etc. However if they do pay, their cost of business is increased, which will affect consumers in the form of higher prices.
- Google Defense: Google claims Google Shopping is one of the thematic search options of Google search. Google makes this argument in general about its search “verticals” – that they cannot be separated from Google search results. Google claims that its verticals (like Google Shopping, Google Flight Search, etc.) aren’t competitive “products,” they’re just a part of Google’s search results.
- Google also notes that while the majority of internet users search on Google, there are plenty of alternatives – if users don’t like Google’s results, they can simply use a different search engine, like Bing. As Google notes, “competition is one click away.”
- Rivals cite one example of Google’s purported misdemeanors in that when a search is done on Google for “Best Sushi New York,” the first result is a blog post by Zagat, the restaurant review site now owned by Google. Below the Zagat results are several sushi restaurant listings from Google’s local information service, with reviews by Google’s restaurant review competitor, Yelp, bringing up the rear.
- Google has been using small badges to notify users that certain results are “sponsored,” as opposed to pure organic results. While this helps users discern between Google’s “thematic” results vs. organic, it still doesn’t do much to help the competition being pushed to the bottom of the SERPs.
- Investigators are also looking into whether AdWords, Google’s advertising service, is discriminating against advertisers from competing online commerce services like comparison shopping sites and consumer review sites.
- Google has already won an antitrust case in Brazil, when the parent of shopping comparison site Buscape brought the case forward. Brazilian court rejected the antitrust allegation, siding with Google.
- The Brazilian court said that despite Google’s overwhelming search market share, the plaintiff’s shopping sites have other ways to be found on the internet, so Google is not a monopoly.
- The Brazilian court ruled that Google’s vertical results aren’t competitive “products,” but are instead just a part of Google’s search results (which is what Google itself claims).
- The Brazilian court ruled that Google doesn’t owe it to the plaintiff to present the plaintiff’s sites in any particular position; Google can offer search results in whatever manner and/or order it deems best for users.
- Some argue that Google, through their search dominance, is requiring competitors to become more innovative, and that far from being grounds for a lawsuit, this is a fundamental and natural process of the marketplace.
- Some claim that this FTC investigation is a huge mistake – such government interference could be detrimental to the overall freedom of the Internet marketing landscape. Government has generally taken a laissez faire attitude toward the internet, and this seems to be preferred by many as evidenced by the enormous outcry during the SOPA debates.
- Bonus Fact: Anti-trust cases generally go on so long that the final verdict is irrelevant because the world has moved on. In USA vs. Microsoft, microsoft seemed invincible at the time but we now know that Google and Apple were close behind.
What do you think? Is Google guilty of any wrongdoings, and will the FTC pursue an antitrust case against Google? We want to hear what you think about the Google Antitrust case!
Image via Fiona Shields