On Tuesday, Google will--according to MLex--participate in the European Commission's Microsoft-ActivisionBlizzard hearing as a complainer. On Twitter you can find my comments on that (1, 2).
Most of the time, Google is a defendant to competition enforcement actions. The United States Department of Justice and various states filed a second antitrust lawsuit against Google. And a couple of days ago, the public redacted versions of the DOJ's and the plaintiff states' responses to Google's summary judgment motions (see my commentary on those Google motions) became available. Technically, those are two cases consolidated into a single one, with substantial overlap.
I'll publish the new filings further below. First, a few observations and "soundbites":
The most important legal argument raised in both parts of the case is that the plaintiffs urge Judge Amit P. Mehta of the United States District Court for the District of Columbia to focus on the entirety of Google's allegedly anticompetitive actions as opposed to looking at individual agreements with other parties in isolation.
That argument comes up many times in either opposition brief, and the plaintiffs refer to the 2001 Microsoft decision that is controlling case law in the D.C. Circuit.
The opposition brief filed by the Colorado Plaintiffs (dozens of states led by Colorado) is generally more colorful than that of the DOJ, but I don't mean that negatively--just two different styles. The Colorado Plaintiffs then liken Google and its different anticompetitive methods to an octopus and its tentacles:
"More than a century ago, journalistic cartoons depicted monopolies using separate tentacles to harm competition in different ways while controlled by the single mind of a single octopus. In 1911, the Supreme Court recognized combined competitive harm arising from a monopoly’s “resistless methods,” which included multiple products, places, and forms of conduct. [...] Much has changed in the economy in the last hundred years but not this simple precept: a company that has harmed competition in multiple ways must face responsibility for the full and cumulative effects of all of its anticompetitive conduct, without regard to which tentacle it employs."
The Colorado Plaintiffs even point the court (via a footnote) to a cartoon from 1899.
A second legal question is particularly key to the DOJ's filing. Google argues that its various agreements (such as the default-search-engine deals with Apple and Mozilla) had only a negligible foreclosure effect because it was all merits-based and customers would predominantly use Google anyway. The plaintiffs, however, point to case law and literature (such as Areeda-Hovenkamp) according to which the foreclosure effect is measured based on the part of the market that becomes practically incontestable, not on what choices end users would have made anyway.
Applying that standard and referring to an expert report by Professor Michael Whinston, the DOJ says that "50% of all U.S. searches covered by the challenged terms of Google’s contracts are well protected by the power of defaults," but users who are not affected by the defaults "are rare":
"33% of all U.S. searches are covered by the challenged terms of Google’s contracts and conducted by users who follow the default, whatever it is. [...] Thus, Google has bought, not earned, at least 33% of all U.S. searches"
A feedback loop further cements Google's market leadership. The DOJ quotes from Google-internal documents to explain how it works:
"One can regard each [results page] as a massive multiple-choice test. Each day, we get to ask humanity a billion questions of the form, ‘Which of these 10 documents is most relevant to your query?’"
"With every query, [Google gives] some knowledge, and get[s] a little back. Then we give some more, and get a little more back. These bits add up. After a few hundred billion rounds, [Google] start[s] lookin’ pretty smart! This isn’t the only way [Google] learn[s], but the most effective."
Concerning the Power of Default, the DOJ's footnote 18 is interesting:
"For example, on Windows PCs, where Bing is the leading default, Bing’s market share is more than seven times higher than on Mac PCs, where Google is the default."
Now that the integration of ChatGPT makes Bing so much more interesting than it used to be, the question of whether Google's default-search-engine deals are legal is even more relevant. There's more to say about the DOJ's and the plaintiff states' opposition to Google's summary judgment motions, and The Register reported on Friday that the UK Competition & Markets Authority is looking into a revenue share agreement between Apple and Google for the iOS version of Chrome, but I'll leave that for another day. You can find the two court filings below.
