US court's order on Google search data sharing can reduce entry barriers

Judging by the market reaction, Google emerged from a five-year antitrust case less damaged than was expected. The stock jumped 8 per cent on the remedies announced by US District Court Judge Amit P Mehta, who had already ruled Google was perpetrating monopolistic behaviour. Google will not be forced to divest Chrome or Android, as proposed by the Department of Justice (DoJ). But it will have to share some of the data it receives from its search engine with competitors, and it cannot make exclusive deals that tie the distribution of search, Chrome, Google Assistant, or Gemini to other apps or revenue arrangements. Since most users stick with default search engines and browsers, exclusive arrangements lock rivals out.

 

However, the company may continue to have non-exclusive arrangements to preload or distribute applications. But it could pay Apple, Samsung, etc to preload its Chrome browser and search engine. Google, for instance, shares around one-third of the search revenue it derives from Apple devices with Apple. These remedies are also not final in that the judge ordered Google and the DoJ to meet and confer and submit a revised final judgment by mid-September. A technical committee will be established to help enforce the final judgment. And, of course, Google may appeal this judgment. Judge Mehta acknowledged that the emergence of generative artificial intelligence (AI) has changed the competitive landscape in the past two years (the case was filed in 2020), and this influenced his remedies. Indeed, the search industry has changed, now that AI offers many alternative pathways to accessing and organising information.

 

However, Google continues to dominate traditional search via keywords, where it holds around a 90 per cent market share, and many of the searches driven by AI prompts (instead of keywords) could be considered “skins”, wherein the AI uses Google and reorganises the content in the links it receives into coherent summaries of information. Another interesting point is that the court explicitly referenced the European Digital Markets Act (DMA), especially in making the recommendations of sharing search data. The DMA requires Google (and similar large service providers) to share certain click and query data with third parties while maintaining privacy. The court also said Google must offer search and search ad syndication services to competitors at standard rates. 

The court order is narrower and more “temporary” than the DMA’s obligations. For example, advertisement-related data need not be shared. The order is also much more limited than the access the DoJ requested, which included sharing the source code, search ranking, and algorithms, which Google argued is intellectual property. Google lives with the DMA since it cannot do business in the European Union without compliance. If American courts ask for similar data-sharing, it could have a wider impact since it is likely other jurisdictions (including India) will follow suit with similar rulings. This ruling may set the scope of tech antitrust remedies in the world’s largest market. Blocking exclusive deals and asking Google to share search index and interaction data with rivals do address barriers to entry that could open up search to competition.