The fight against Google’s Goggles: When does the US Department of Justice decide to punish Google? How long will it take to resolve the case?
It’s virtually certain that a new phone in the US will have Goggles as a default way to access the internet. Federal judge Amit Mehta on Monday ruled in favor of the US Department of Justice that the contracts Google uses to secure that position violate fair competition laws. Mehta has to decide what to do about it.
There will be experts and written testimony before Mehta issues his opinion on how much the penalty should be. The exact timeline is unclear, though. William Kovacic, a former Federal Trade Commission chair and a professor at George Washington University, tells The Verge that he expects Judge Amit Mehta to hold a roughly weeklong hearing on remedies this year and believes the overall process could stretch to the end of 2024.
Rebecca Haw Allensworth, an antitrust professor at Vanderbilt University Law School, expects a fight that could take up to a year. It is going to take a long time because there will be gnashing of teeth over it.
By the end of 2026, we could see a Supreme Court decision according to Kovacic. George Hay, a law professor at Cornell University, gave The Associated Press a timeline up to five years.
Google, Apple, and the Fortune 500: Apple and Google agree to an extension of the Safari contract in 2021 and beyond – no choice for Google or Apple
Google pays Apple billions of dollars a year to be the default search engine in Safari. Apple’s senior vice president of services says there is no other viable alternative. He said there was no price that Microsoft could offer Apple to get them to preload Bing.
At one point Cue said that he did not believe Microsoft could offer us a price in the world. They were willing to give us Bing for free. The whole company could be given to us.
The opinion of Cue doesn’t necessarily mean that Bing is bad. Bing’s search quality is not as good on mobile as it is on desktop, though it is close to where it was on desktop.
It’s not just Eddy Cue refusing to give Bing the time of day — all of these companies recognize Google as the only game in town. None of these “Fortune 500 companies” have a real choice in the matter.
According to the opinion, “[i]n return for exclusive and non-exclusive default placements (i.e., user-downloaded Chrome and Safari default bookmarks), Google pays Apple a [redacted] percentage of its net ad revenue, which amounted to $20 billion in 2022.”
Google and Apple entered into their present contract in 2016. Their dealings go back even further, but around that time, Apple came out with Suggestions. (Think, for example, when you type something out into Spotlight and Apple suggests a website to you — that’s not the same as Google Search.)
This was significant. One analysis estimated a revenue loss of between 4% and 10% of the revenue of the mobile browser based on Apple Suggestions. The new 2016 contract includes a specification that “Apple’s implementation of the Safari default must ‘remain substantially similar’ to prior implementations” so that Apple “could not expand farther than what they were doing,” lest Apple “bleed off traffic.”
Both companies are pleased with the terms of the 2016 contract. Google and Apple extended the agreement in 2021: the contract will expire in 2026. Apple “can unilaterally extend the agreement by two years,” and if both parties agree, they can extend the contract even further, all the way out to 2031. Both Apple and the internet giant have to defend the agreement in response to regulatory actions.
It would cost $6 billion a year to run a GSE on top of what it already spends developing search capabilities, according to an analysis done by Apple. The cost to create and maintain a GSE that could compete withGoogle was estimated in the late 2020s. Apple would have to spend something “in the rough order of” $20 billion in order “to reproduce [Google’s technical] infrastructure dedicated to search.”
First off, United States v. Google draws a distinction between general search engines (GSEs) and specialized vertical providers (SVPs). The heavy use of technical abbreviations makes your eyes water, but the crux is simple and easy to understand. Everyone understands a search engine in the sense that they’re also a search engine.
If you get really galaxy-brained about it, there are thousands of little “search” boxes all over the internet. Sometimes you even use them in a similar way to Google Search — say, for example, to look for cheap flights to a specific destination or to buy a pair of black flared leggings. Nevertheless, Booking.com and Amazon.com simply are not the same as a general search engine that indexes the World Wide Web. Do you, an ordinary person, need to logically justify this gut reaction? No. A court of law has done it for you already, in an outpouring of words you probably don’t need to read.
So much for the SVP. But the little search bar on social media platforms, like TikTok, operates slightly differently — at least in terms of user behavior and certainly in terms of whether Google views certain companies as competitive threats. Apparently in 2021, Google conducted research into “younger users.” In the study, they found that more than 50% of Generation Z users use TikTok as a search engine.
Mehta doesn’t care about internet habits of zoomers, when it comes to antitrust analysis. He writes that imagine if the search quality was degraded through neglect or purposely. So, imagine. Who. I’m not sure if it could. Imagine. That.) Would social media platforms be able to shift resources to put out a product that resembles a GSE in order to capture a significant number of dissatisfied users? The answer is no. It would take “extraordinary cost and expense” for even a juggernaut like Amazon or Meta to fill that hole in the market.
Maybe AI search is the future, but the future is not here yet — at least, not in a way that’s relevant to antitrust law. “AI may someday fundamentally alter search, but not anytime soon,” writes the judge. He believes that there is no substitute for the basic building blocks of search like web crawling, index, and ranking.
He also found that — factually speaking, even — “generative AI has not (or, at least, not yet) eliminated or materially reduced the need for user data to deliver quality search results.” The opinion’s findings of fact quote Neeva’s cofounder Sridhar Ramaswamy, saying that “the middle problem of figuring out what are the most relevant pages for a given query in a given context still benefits enormously from query click information. The case is not that the models eliminate that need and replace it with something else.
In other words, when you search for “golf-shorts,” it’s not just that you get served (hopefully) with the relevant results for golf-shorts — Google more or less automatically receives important information about what you think the relevant results are, based on what pages you end up clicking on. That feedback loop isn’t happening with chatbot.
The opinion quotes a VP of search at the search engine as saying it is crucial for the company to have an infrastructure that can handle the traditional ranking system. There is no sense in giving up our ranking to these systems. We still exercise a modicum of control over what is happening and an understandability there.”
It’s thought that in 2020 Google conducted a study to see what would happen if they reduced the quality of its search product. The conclusion was even if the company made search shittier, the revenues from Search would be fine.
The judge could change the experience to have users choose their default search provider. He could force the company to sell certain parts of its business. With the search giant appealing the verdict, it’s not likely that they will be able to decide penalties until at long last.
Legal and economics experts have ideas of what Mehta may be thinking when it comes to his remedies. Here’s a look at five options.
The courts in the US have tried to resolve antitrust violations by ordering an end to illegal conduct, setting rules to prevent it from happening again, and taking additional measures to ensure that the culprit and its competitors are not unfairly treated.
The Mehta Rule in the Chrome Browser: How Google can expand the Google Search Menu in the EU to a new view of the European Union
Mehta could follow the lead of the European Union, which for years has required Google to offer a menu of search options on Android devices, and recently expanded the rule to the Chrome browser.