On October 20, the Justice Department filed a long-anticipated anti-trust lawsuit against Google. The lawsuit alleges that Google is “unlawfully maintaining monopolies in the markets for general search services, search advertising, and general search text advertising in the United States.”
In other words, Google wields an unfair competitive advantage.
Google, of course, holds a commanding share of the online advertising market, at roughly 29 percent, followed by Facebook and Amazon. Ironically, Google’s share has been dropping, and 2020 has been rough on its ad business. But the lawsuit isn’t about market share; it’s about allegedly unfair business practices. Read on for answers to questions you might have about the matter.
What exactly is the lawsuit accusing Google of?
According to the Justice Department, Google illegally protects a monopoly in its core search business. That monopoly is harmful to consumers and Google’s competitors. Google pays companies like Apple billions of dollars to make its search engine the default option on their devices – giving Google an unfair advantage. In addition, the Justice Department alleges that Google capitalizes on its dominance by collecting data from users, thus giving its search-based advertising business even more of an unfair advantage.
What is Google’s response?
Google disagrees strongly. In a blog post, Google’s Senior Vice President of Global Affairs Kent Walker wrote, “People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives. This lawsuit would do nothing to help consumers. To the contrary, it would artificially prop up lower-quality search alternatives, raise phone prices, and make it harder for people to get the search services they want to use.”
Walker contends that Google paying businesses like Apple to make its search engine the default search engine is no different from a cereal brand paying a supermarket to stock its products at the end of a row or on a shelf at eye level.
When will the anti-trust case be resolved?
The case could take years to be resolved. Google has deep pockets and will defend itself aggressively. Don’t hold your breath waiting for an outcome anytime soon.
How will the outcome of the presidential election affect the lawsuit?
No matter who wins the presidential election, the lawsuit will move forward. The Justice Department has gone on record saying it is committed to the legal action. Attorney General William P. Barr has aggressive pursued a lawsuit, and the action will simply continue if President Trump wins the election. If Joe Biden wins the election, the consensus legal opinion is that the lawsuit would remain in place.
What happens if Google loses?
Google could get broken up, thus reflecting a growing “break up big tech” sentiment among lawmakers. In the complaint’s “request for relief,” the U.S. is seeking “structural relief as needed to cure any anti-competitive harm.” In other words, Google might be forced to be restructured, or broken up.
What should advertisers who use Google do?
For now, everything is business as usual. The case may take anywhere from six to 18 months to even go to court. We recommend:
- Do manage your Google advertising account very closely. As we have blogged, Google has been known to introduce features and policy changes that could increase your advertising costs.
- If you advertise with Amazon Advertising and Facebook, keep a close eye on current events. In recent years, lawmakers have been critical of the Amazon, Facebook, and Google because of their growing dominance. The Google lawsuit may not be the last against them.
Contact True Interactive
To succeed with all firms of online advertising, contact True Interactive. Read about some of our client work here.
