Search for competition

Google ruling can have significant implications

A ruling by US judge Amit Mehta that Google has violated antitrust laws by ways in which it has marketed its search engine is likely to have a momentous impact on the internet. It could lead to changes in the ways search engines are used and developed, apart from leading to an enforced corporate reorganisation of the Alphabet group of companies, which includes Google. Google pays tens of billions to browser companies and smartphone makers to make its search engine the default installation on browsers and devices. While it is possible, even easy, to switch the default search engine on a device, most users don’t. Behavioural scientists were called in during the course of the trial to explain why few users will bother to switch search engines.

As a result of this behaviour, most of the world’s queries (90 per cent, according to the judgment) are made on Google and this enables the search giant to gather yet more data, which allows it to further fine-tune its search engine. It is a virtuous circle for Google and a vicious circle for competitors, which are elbowed out. Google derives the bulk of its income from advertising tied to search. The decision represents a victory for the US Department of Justice, which accused Google of illegally monopolising online search. The judgment rejected the claim that Google had monopoly power in one specific part of the advertisement market while agreeing that Google had a monopoly in “general search services” and “general search text advertising”. The ruling is certainly going to be appealed and remedies have yet not been recommended in any case. However, the remedies could run through a wide range. At its most drastic, the court could recommend that Google itself be broken up into several companies hosting its different divisions and service segments. This would be complicated since Google is part of a complex web of listed companies and unlisted subsidiaries held under the umbrella of Alphabet.

Much more likely, the court would seek to ban the sort of licensing agreements Google implemented with handset makers and browser developers. The court may seek some alternatives which make it easy for average customers to use and switch default search engines. Search is one of the most important functions on the internet. Search engines offer information on all kinds of subjects, by indexing websites and redirecting queries. The engines use algorithms to grade the reliability and popularity of information on different websites. The Google algorithm is called the “Page Rank” after its inventor, Google founder Larry Page. How a search algorithm works is always a closely guarded secret. Search engines are also “yellow pages” for all sorts of services, from food delivery, to dating, to travel bookings, etc. Service providers advertise on search engines, providing the revenue model. “Search engine optimisers” are an entire class of service providers who guess at how to configure content on websites to achieve front-page displays on search-engine queries.

Apart from Google, there are dozens of well-known search engines offering their unique selling propositions such as privacy, specialising in dark web content, image search, and social-media content, etc. The tendency of tying large language models like ChatGPT to search engines has also altered the search landscape and experience. Forcing the market open by encouraging device makers and browsers to offer other engines as defaults may foster competition. That could lead to the creation of new revenue models and more specialised search engines.