Google’s apparent omnipresence would make one assume its launch synonymous with that of the Internet. However, Google was launched only 26 years ago, growing exponentially and overtaking its competitors like Yahoo! and Bing with deceptive ease. As the battle for innovation continues, one must not overlord the law. While law seeks its credibility in precedents, tech is driven by its uniqueness. Hence, the synergy of law and technology often plays tug-of-war with the past, present, and future. Antitrust law, or competition law, is no stranger to this dilemma. In fact, it’s the favourite victim in the 21st century.

To Google or not to Google

“Google is winning because it’s better”, quoted John Schmidtlein, the defence lawyer for Google LLC, at its trial in the US Federal Court in early August 2024. In this age of the new economy, tech giants are achieving profit levels that were once only dreamt of by oil companies in the 90s. One must ask: has any company mastered the art of competition quite like Google? Or is the key somewhere else?

Antitrust: Levelling the data minefield

In simple words, antitrust or competition law regulates businesses to prevent the concentration of economic power in the hands of a few corporations. Competition law ensures that companies do not use their dominant power to impose unfair prices. While assessing a company’s involvement in anti-competitive practices, market power is one of the main components. Google’s monopoly over the search engine market and general text search advertising has raised several regulatory eyebrows.

Google has reportedly paid browsers such as Mozilla Firefox and Safari to have its search engine as the default setting. Yes, the option to change remains in a user’s hands, but a user seldom takes the pain to modify. This makes the opportunity highly lucrative to Google, reflected by the company’s expenditure for continuing this arrangement. In a court proceeding, the company admitted to $23.6 billion for such expenditures. Hence, for any nascent search engine to compete against Google, it faces an uphill task.

What doesn’t “ad-up”?

Google employs several strategies to maintain its dominance in the ad revenue market. Initially, businesses advertised on Google’s search engine pages, a practice that began with the launch of Google Ads in 2001. When the company realised the potential of digital advertising, it brought the quickest route to the finish line by acquiring DoubleClick in 2007. DoubleClick, a digital ad publisher, had a market share of about 60%. This acquisition made Google a dominant ad publishing company in the digital space. It also ensured that no rival search engine could beat its dominance in the ad market.

If you click on an advertisement published by a business, how does Google earn from it?

• Google Search Ads: You search for “medicine delivery” on Google, and the search results display an ad for a prominent app. You click on the result and visit the app. The app pays Google for each user who clicks on its ad through the search engine. This is called the Pay-Per-Click (PPC) model.
• Google Display Network: You want to know the side effects of a medicine, so you run a quick search. On an informational website, a Google pop-up ad displays a promotional video of a medicine company. You click on the ad to buy it. Google gets revenue on that click.
• Auction: You want the best quality blood pressure monitor for your home. Companies bid on the keywords “top monitor” or “Blood Pressure Monitor” to appear higher on the search engine results page. Google ranks the ad’s bid and quality and displays it accordingly. If you click on their ad, the company pays the bid amount to Google.

Current Position

In 2019, there was a crisis in Google’s headquarters as the search engine revenue numbers were not promising. People were not spending enough time on the search engine results to fuel the ad revenue. Fast forward to 2024, the March update had several issues, with the quality of search results dropping noticeably. It appears that Google has now begun prioritising ad revenue over quality sites. Only those sites that can pay Google appear high on the list.

The main reason for this is the confidence that there is a captive audience that would not migrate from its business due to these changes. While this confidence may or may not be justified, it is no secret that competitors are slowly gaining ground. OpenAI-based search engines and Bing and DuckDuckGo have reported increased user bases.

Conclusion

The entire ordeal seems like a successful marketing case study and not something of interest to an average user who reads this blog through Google and has no complaints. But the state of affairs demands a closer look. These practices not only restrict competitors but also affect the search engine quality. Search engines are tools that allow us to access unlimited information efficiently. If knowledge is filtered and curated solely to serve the interests of a monopolistic giant, it ceases to be a free exchange of ideas and is reduced to a mere commodity. If the executives are getting richer, and advertisers dominate, where does it leave consumers?