Google accused of being a monopoly
Google recently faced an antitrust lawsuit where the company was accused of essentially being a monopoly. This is creating some serious legal challenges for Google and its parent company, Alphabet, as Judge Amit Mehta recently ruled in U.S. District Court that Alphabet is a monopoly. This means that the case is going to move forward into the discovery phase. Google will likely have to eliminate or significantly alter some of its previous deals to avoid these allegations, and these potential changes are being considered at this time.
The problem is that Alphabet has set up various distribution agreements with other companies. One example is Apple, but the company also has agreements with third-party browsers and Android phone producers. In the lawsuit, it is claimed that about 25% of the revenue Google gets from its searches comes from these agreements.
Google structured these distribution agreements in a way that would make it the default search engine. Many users never even consider what search engine they’re using, so getting in this position means that Google automatically gets the majority of web traffic from these sources. It is in this sense that the company has been accused of forming a monopoly.
What will this mean for Google?
There have not been serious ramifications yet. As noted, Google may have to alter some of these distribution agreements. There are those who believe that the stock prices could fall, but that hasn’t happened at this time. The reasoning is that Google will probably appeal this decision, so nothing definitive has to happen yet. They will need to get through the appeals process first.
How did this happen?
The problem is that many users search Google on their mobile devices, such as their smartphones. If Google has an agreement with a company like Apple, which tends to sell over 200 million iPhones every year, there is a possibility that nearly all of these users will begin choosing Google as their default search engine. They aren’t doing it intentionally, but that’s just the way the device is set up when they get it and they never make any alterations.
But is this actually fair to other companies that are fighting to get a portion of that search traffic? Should Google essentially be able to buy this traffic by using distribution agreements to ensure that its search engine is always the default option? Or should there be more competition so that users have to actively choose which search engine they want to use?
That question is at the heart of this lawsuit, and it will be very interesting to see how this plays out. It could have a long-term impact on Google search tactics and where web traffic comes from. Here at Content Customs, we keep a close eye in these types of developments so that we can help our clients best achieve their online marketing goals.