Google Antitrust Trials Mark Historic Shift in Search and Ad Tech

This week’s court ruling against Google marks the apex of the country’s biggest antitrust showdown in a quarter-century, and is poised to reshape the tech giant’s operations and the entire tech industry.

Judge Amit Mehta of the US District Court of the District of Columbia decided Aug. 5 that Alphabet, Inc.’s Google illegally monopolized the search engine market through exclusive deals with Apple, Inc. and others.

Google, the largest and most-visited search engine in the world, stands unrivaled despite the existence of other search engines. Google “enjoys an 89.2% share of the market for general search services, which increases to 94.9% on mobile devices,” according to the highly anticipated ruling in the Department of Justice’s case against Google.

Nobody knows exactly what’s in store for Google after this decision, but the company should be thinking about a host of possible legal and business outcomes.

In the short term, intensified regulatory scrutiny could invite more legal challenges and hefty fines, potentially forcing the company to overhaul its operations to meet new regulations. Mehta’s decision follows an early 2024 upholding of a 2017 $2.7 billion fine that the European Commission imposed on Google after it found the company had used its own price comparison shopping search service to gain an unfair advantage over smaller European rivals.

These and other examples of heightened scrutiny might require renegotiations of exclusive agreements with device manufacturers and browser developers, hypothetically dulling Google’s competitive edge. New transparency obligations might have the effect of disrupting its advertising practices and algorithmic operations.

Competitors like Bing, DuckDuckGo, and emerging players could seize the opportunity to gain market share as barriers to entry lower and default search engine settings change. To maintain its dominance, Google might need to double down on innovation and user experience improvements, with the effect of sparking a cultural shift within the company and leading to leadership changes.

Financially, while changes in default settings and increased competition could hit search-related ad revenue, immediate drastic impacts are unlikely due to recent decisions like reversing cookie deprecation. However, it makes sense that significant resources could be funneled into legal compliance.

In the mid- to long-term, the market could witness a surge in diverse search engines, with specialized and privacy-centric options gaining traction. The rise of AI-driven personal assistants and voice-activated searches could further fragment traditional search engine dominance.

Competitors might be encouraged to develop more advanced search algorithms, challenging Google’s technological supremacy. For example, a few weeks ago, OpenAI announced it developed a SearchGPT that will join the battle for search engine supremacy. Heightened privacy concerns could also boost privacy-focused search engines, posing a threat to Google’s data-centric advertising model.

Ongoing legal battles may spawn stricter antitrust regulations worldwide, restricting Google’s ability to engage in exclusive deals and mergers. Other tech giants such as Meta, Amazon, and Apple might also face increased scrutiny.

Google may need to navigate varying global compliance standards, adding operational complexities and potentially prompting a rethink of its business model, especially in its interactions with advertisers and agencies. Cloud computing, hardware, and other service sectors could diversify its revenue beyond search advertising.

Strategic acquisitions to bolster emerging technology capabilities would be a time for careful risk navigation and precision. Increasing awareness of alternative search engines and privacy concerns could shift user behavior towards non-Google options. To retain its user base, Google could heavily invest in personalizing search experiences and boosting overall user satisfaction.

The upcoming Google antitrust trial in the Eastern District of Virginia over anticompetitive conduct in advertising technology, starting Sept. 9, could be a seismic event—potentially determining whether Google remains a single entity or is fragmented into separate companies.

These developments could significantly shape Google’s strategies and market dynamics in the coming years, marking this pivotal moment for the search giant and the broader digital marketing industry.

And while a court ruling to break up Google isn’t looming, the tech industry is closely monitoring these developments, understanding that the trial’s outcome could trigger unprecedented changes.

Although less likely to happen, Google might be subject to structural remedies such as divestiture. The DOJ might prefer these structural remedies, which involve breaking off parts of a company.

Historical precedents like the breakup of AT&T’s Bell system in the 1980s highlight the impact of such actions, though not all attempts have succeeded, as demonstrated by the 1990s Microsoft operating system case.

A one-time sale of Google’s components could avoid the need for ongoing compliance monitoring and offer a cleaner break, potentially more effective in restoring competition.

However, the challenge lies in determining which parts of Google should be separated, with experts divided on the potential outcomes and effectiveness of such a measure.

The stakes are high, and the future of digital marketing, technology, and competition hang in the balance, making this trial a critical moment for the industry.

The case is United States v. Google LLC, D.D.C., No. 1:20-cv-03010, 8/5/24.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Anat Alon-Beck is associate professor of law at Case Western Reserve University School of Law.

Nizan Geslevich Packin is a law professor at Baruch College, City University of New York, and University of Haifa Faculty of Law.

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