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Five takeaways from the Google antitrust lawsuit
Biz insightsOct 21. 2020
By The Washington Post · Heather Kelly · NATIONAL, BUSINESS, TECHNOLOGY
Whether you want to look up facts about the moon or find the lowest prices on sweatpants, Google’s search engine is unavoidable. That’s a problem for consumers, said the U.S. government in a new, long awaited antitrust lawsuit filed against the company Tuesday.
In the 64-page complaint, the Department of Justice lays out its case against Google’s alleged search monopoly by focusing on one part of its business. It looks at all the deals Google has struck to be the path of least resistance for most consumers. Years of partnering with other companies, expanding its own line of products, and user complacency have made it the default search engine everywhere from our laptops to smartwatches.
Here are five interesting takeaways from the lawsuit.
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Google’s search competitors aren’t very competitive
Google has a search monopoly, says the lawsuit, because it has 88% of the search market in the U.S. According to the complaint, there are only three other search providers worth mentioning: Bing, Yahoo! and the privacy-focused DuckDuckGo.
Microsoft’s Bing search engine, launched in 2009, makes up 7% of the market. Microsoft can make Bing the default search engine on its own products, but since discontinuing its own competitor to the Android and iOS mobile operating systems, Microsoft Phone, it doesn’t have an advantage in the mobile market.
With less than 4% of the market, Yahoo! isn’t even really a full search engine, says the filing. Instead of crawling the web for search results, it purchases them from Bing.
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It sees Apple as a key enabler
Two of the largest tech companies, Apple and Google, are often viewed as direct competitors. But the relationship between the two companies is far more complicated, according to the lawsuit.
Their smartphone operating systems, Android and iOS, are the two most dominant options in the world, with third options barely registering as a blip in the U.S. Globally, Android is the dominant mobile operating system, but in the U.S. they are much closer in market share. They have competing smart assistants, Siri and Google Assistant, as well as rival smart speakers, smartwatches, streaming platforms, cloud services and more.
Apple, however, doesn’t do search.
That’s how Google came to pay Apple to be the default search option on its Safari browser on Mac computers, iPhones and iPads. It started in 2005 when Google gave Apple a percentage of ad revenue from searches from Apple devices, and Apple made Google the default search engine. It expanded from Macs to mobile devices and eventually Siri and Spotlight searches. Between its own Chrome browser and Safari, Google is the default search engine on more than 90% of mobile browser searches, says the lawsuit.
“Today, Google’s distribution agreement with Apple gives Google the coveted, preset default position on all significant search access points for Apple computers and mobile devices,” says the complaint.
Offering Google is a very lucrative business for Apple. The lawsuit says Apple’s share of Google’s ad revenue is between $8 and $12 billion a year, and that it makes up as much as 20% of Apple’s net income.
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The ghost of Google in Amazon’s smartphone flop?
In 2014, Amazon launched a smartphone called the Fire phone. The device didn’t last long and was the e-commerce giant’s final attempt at a traditional smartphone. The DOJ’s lawsuit floats a possible factor in its failure after one year: it used Bing as its default search engine. (Amazon chief executive Jeff Bezos owns The Washington Post.)
The Fire phone ran a “forked” version of Google’s Android mobile operating system, meaning it started with Android and customized it for its own products. Amazon installed its own apps and app store instead of the usual Google offerings, and went with Microsoft’s search engine.
“Google’s anti-forking provisions and policies limited the growth of Amazon’s mobile phone, and of Fire OS, because major manufacturers declined to support Amazon’s phone out of fear doing so would risk their lucrative deals with Google,” says the lawsuit.
Fire OS, Amazon’s customized operating system, is still used on products like Amazon’s Fire tablets.
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Easy access to Google causes consumer harm, lawsuit says
The lawsuit goes into why consumers, who are presumably getting answers to their Googled questions without much thought, should care about its business practices. The government points out what it says are some potential ways they are being harmed. For example, if you always accept Google as your default browser, you are also accepting its controversial privacy approaches, such as the way it collects and uses user data.
“American consumers are forced to accept Google’s policies, privacy practices, and use of personal data; and new companies with innovative business models cannot emerge from Google’s long shadow,” says the filing.
Having the dominant search engine also means Google can reduce the quality of search services. An example the lawsuit gives of innovation happening, but not reaching many consumers, is DuckDuckGo. It has a subscription based search option, which doesn’t rely on advertising. Google is already everywhere, argues the lawsuit, and a court order is needed to make room for other options.
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The government is worried about how we’ll search in the future
The lawsuit primarily focuses on the dominant way Google is used now: for typing search terms into a smartphone or computer. But the DOJ is worried about a possible future monopoly on how people will search in the years to come and what Google’s advantages will be.
It names smartwatches, TVs and connected cars, but voice searches are one of the fastest growing search areas right now. Most people are familiar with Amazon’s Alexa’s voice-assistant, which lets you ask questions instead of typing them in. Amazon is still the market leader in the smart speaker market, followed by Google with Apple trailing in third place. But those voice assistants are gaining users outside of speakers. Google’s Assistant, for example, is already built into other products like Android and smartwatches as the default voice interface.
“Google is positioning itself to control these emerging channels for search distribution, excluding new and established rivals,” says the filing.