Google was found guilty of illegal monopoly by the DOJ in a landmark trial. Find out how this ruling could impact the tech giant and digital marketing.
On Monday, August 5, the United States Department of Justice (DOJ) ruled that Google maintains an illegal monopoly on search engines. It also determined that it applies monopolistic practices on web advertising services. This judgment marks a partial conclusion to the lawsuit initiated in 2020, also by the DOJ.
DOJ vs. Google, the key points
Just a few days ago, the American court ruled that Google operates as a monopoly, both for search and for web advertising. For all these years, Google has allegedly maintained its share of the search engine and advertising market by restricting the entry of new competitors and creating feedback loops .
Why is this a cause for condemnation? Because, as Judge Amit Mehta determined, this type of practice goes against Section 2 of the Sherman Act, which prohibits monopolies. It is hoped that this ruling will set a precedent for future rulings against other tech giants such as Apple, Amazon or Meta.
However, the court’s ruling held that general search advertising (i.e. paid ads in SERPs) is not, in itself, a business. Therefore, Google would not have a monopoly in this area.
Web monopoly
During the legal proceedings against Google, which began last September, the court focused on the company’s exclusive search agreements with Android and Apple. Thanks to these agreements, Google would have been able to establish itself as the default search engine in a large number of markets. How does this work? Broadly speaking, in two different ways:
- Google pays $20 billion a year to be integrated by Apple as the default search engine for its browser, Safari. While users can reconfigure this setting, it is well known that most do not.
- Google contractually requires manufacturers of Android devices to include certain Google apps from the factory… which in most cases cannot be uninstalled (or stopped using).
It should be noted, however, that while Android is Google’s own operating system, this behavior is (as determined) anti-competitive. It also goes against the claim made by Google (among others) to Microsoft in 2005.
On the other hand, Google’s monopolistic practices are more “classic”: acquiring rival companies, neutralizing its competitors, forcing the use of its applications and manipulating the auctions in its advertising exchange. In this way, Google has managed to monopolize more than 30% of the dollars invested, today, in digital advertising systems.
Furthermore, the platform has been criticised for operating in three areas of the market: exchange, purchase and sale. That is, on the customer side, the seller side and as an intermediary. This, it was argued, allows Google to cover the entire buying and selling process.
Taken together, these practices contribute, for the time being, to Google not needing to improve its offering to ensure demand. From the point of view of those who use Google to advertise, the consequences are economic.
Without competitors to naturally regulate costs, they are subject to the decisions of Google’s algorithm (or CEOs). Not to mention that if marketing campaigns on Google are not profitable , it will be even more difficult for them to be profitable on other search and advertising engines.
Google lawsuit: background
The origins of this DOJ ruling, if you look closely, can be traced back to the conflicts between Microsoft and Google in the early 2000s. A more concrete precedent, however, is the antitrust lawsuit filed by the DOJ and a group of lawyers against Google’s search services, filed in 2020.
The Justice Department charged that Google held 88% of the US search market and more than 70% of search ads. It argued that the lack of strong competitors would lead to poor quality services, harming consumers.
This lawsuit was joined to a second lawsuit, also initiated by the DOJ at the time, against Google’s monopoly over its digital advertising systems. Since these were similar lawsuits, it was determined that combining the two lawsuits would serve to expedite pretrial processes, such as the collection of evidence.
Appeal at sight?
While the trial ended just a few days ago, Google has already stated that it plans to appeal the ruling. According to Google’s President of International Affairs, Kent Walker, the court established that, while the search service offered by Google is superior, it should not be so easily accessible.
Alphabet believes that, given these circumstances, the penalty is inappropriate and contrary to the market’s “ecosystem.” For the moment, until Google’s more than likely responses are resolved, it will not determine the reparations or sanctions that the company must comply with.
Digital marketing: consequences of the trial against Google
The trial ruled that Google has an illegal monopoly on web search, but did not specify the penalty that will be applied to the company. Therefore, it is difficult to predict what consequences it will have for the world of digital marketing.
The possibilities are various and range from a fine to the dissolution of the company (but the latter is highly unlikely). Both parties (Google and DOJ) will submit proposals for reparations before September 4, which will be discussed in a new trial.
In any case, some results that can be expected (and for which it is worth preparing) are:
- The separation of YouTube and Google. This would eliminate an important advertising medium for web ads, especially PPC ads.
- Difficulties in data collection and management, especially if you work with Google Search Console and similar applications. This is also because automated campaigns on Google would no longer be “mixed” and would focus on specific channels.
- Multiple advertising platforms. As anticipated in the previous point, the “dissolution” of the Google conglomerate would imply that digital marketing campaigns would have to be customized. That is, one platform per type of campaign, with the complexity that this entails.
In other words, the outcome of the DOJ vs. Google trial is expected to cause digital marketing to become more particularized. Paradoxically, this ruling contributes to pluralizing access to the advertising market… But it requires specific knowledge to successfully navigate this new landscape.
On the other hand, it must be taken into account that, as a search engine, Google will not stop dominating the market overnight. Nearly 90% of the current public uses this search engine either for convenience (as it is the default option), trust or other reasons. A decisive change in the short term does not seem to be around the corner.
Google-proof campaigns
What do you think about this trial? Do you think the court’s decision is correct? Would you support Google’s appeal? What other changes do you think are coming? Let us know in the comments, we’re interested in your opinion!
On the other hand, if you are worried about losing your marketing investment overnight or not being able to manage your business’s advertising in the future, don’t worry. At Enjoy Minder we can help you with that.
We are a team of committed professionals with years of experience in the field and international projection. We offer comprehensive services to cover all aspects of your brand’s presence on the web and adapt your campaigns to what you need. Contact us to find out more in detail how to apply the best of the Internet to your business. Being beyond Google is not easy, but with Enjoy Minder, it is possible. Contact us!
