TPA Responds to the Ruling on the DOJ Lawsuit Against Google

For Immediate Release

Contact: Kara Zupkus (224) 456-0257

WASHINGTON, D.C. – Today, a federal judge ruled that Google holds a monopoly on the “general search services” market and acted in violation of section 2 of the Sherman act. According to the ruling, Google’s monopoly on the general search market allowed it to charge “supracompetitive” prices in the search text advertising market and would have illegally acted to maintain its monopoly by signing distribution agreements with hardware companies.

However, the ruling also established that the company does not hold a monopoly in search advertising and is not to be held liable for its action on its advertising platform.

Taxpayers Protection Alliance (TPA) Executive Director Patrick Hedger offered the following statement:

“Today’s ruling unfortunately ignores the practical realities of the internet search market by accepting an overly narrow definition of the market to benefit the politically motivated plaintiffs at the Department of Justice (DOJ). Judge Mehta was quick to accept the DOJ’s definition of the market, which largely focuses on web-based browser searches, leaving out novel search methods Americans use such as social media apps, specialized online marketplaces, or artificial intelligence tools. These alternatives were already eroding Google’s market share at the time of the lawsuit and continue to do so today.”

“The ruling also establishes an arbitrary threshold for when routine competitive behavior is now to be considered uncompetitive. Google’s distribution agreements are an online browser parallel of what slotting fees are in the offline world. These are a commonly regarded as pro-competitive and pro-consumer agreements between parties where one party pays to secure visibility to potential consumers and the owner of the slot is properly compensated for that exposition. However, the ruling now established a threshold where these agreements are deemed anticompetitive when successful or high-quality products are involved.”

“Despite the mostly unfortunate ruling, Judge Mehta also recognized the various flaws in the DOJ’s arguments. Despite the DOJ’s best efforts to mischaracterize the online advertising market, the ruling correctly recognizes that online advertising is a fiercely competitive market where Google faces ever-growing competition. It also shot down the DOJ’s creative theories of monopoly pricing. Appeals are forthcoming and there are difficult (and borderline-illogical) circles for the government to square. Barring that, the only foreseeable outcome for consumers is greater difficulty in accessing Google’s valuable services on their devices.”

TPA will continue to monitor this situation closely.

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Taxpayers Protection Alliance (TPA) is a rapid response non-profit, non-partisan organization dedicated to educating the public through the research, analysis, and dissemination of information on the government’s effects on the economy.