Act 2: Appeal in Google Search Antitrust Case | MoginRubin LLP

I was not the only one who understood the importance of the DC District Court’s decision earlier this month to find Google monopolizing the general search market and the search text advertising market in United States et al. v. Google LLCNo. 1:20-CV-3010-APM, DDC I have already reported on how the antitrust authorities successfully argued that Google's exclusive contracts with smartphone manufacturers, browser developers and mobile operators constituted anti-competitive behavior that resulted in the maintenance of its search monopolies. Below I present my view on possible remedies in this case.

Prior to the Google Search trial, it was decided to split the proceedings into two phases, a liability phase and an appeals phase. The liability phase concluded with the filing of Judge Mehta's opinion, which contains the court's findings of fact and legal conclusions. Google will appeal this decision and it could be overturned by the DC Circuit Court of Appeals, although the appeal will likely have to wait for the appeals phase to conclude.

A hearing before the trial judge is scheduled for September 6 to discuss how the remedies phase will proceed. During this phase, the court will consider proposals from both sides on the steps that need to be taken to restore competition in the markets where Google has been found to be a monopoly, the general search services market and the general search text advertising market. There are two broad categories of remedies, called behavioral remedies and structural remedies.

Possible behavioral and structural remedies

Behavioral remedies are rules that the company must follow for a certain period of time. For example, the court could prohibit Google from entering into contracts with third parties to be the exclusive default search engine on a device or in a browser. Another behavioral remedy is requiring a “choice screen” that allows users to select the search engine they want to have as their default in a given environment. It's not clear whether any of these (or any) behavioral remedies will serve the purpose of restoring competition in the two markets affected. Google Search may have such a big head start that banning default agreements may have no effect on market competition at all, and the EU has been largely unsuccessful in promoting competition by mandating choice screens. And the court only has the power to order Google to follow certain rules, it doesn't have the power to compel Apple or other third parties to do anything. It's very likely that Google will prefer a behavioral remedy, since such rules can usually be circumvented through a circumvention strategy.

One structural solution is to split the company into smaller parts. Some commentators have suggested splitting Search from the Android and Chrome operating systems, but again there is no clear mechanism showing how this would restore competition to the respective markets. More promising, if more radical, is a structural solution in which the search engine's indexing function is separated from Google Search, and the former can keep the click and query data it collects and serve as a kind of utility for other search engines. This kind of solution is much more typical for Europeans than for the US, where forcing private companies to act as public utilities is highly frowned upon.

Due to the complexity of the issue, there will likely be several more rounds of litigation before a final hearing on remedies is held. The parties will likely present the additional information and expert analysis needed before submitting their proposed remedies on September 6. This process could take a long time in the fast-moving technology industry, and in the meantime, AI-powered search could change the existing competitive landscape.