The U.S. Justice Department (DOJ) has proposed remedies to a federal judge who held that Google illegally monopolized web search. In reviewing the DOJ’s recommendations, the judge should take into account the downsides of particular remedies, as well as their potential benefits. The judge should be careful not to impose remedies that could reduce innovation and economic welfare.
The Google Search Case
The DOJ sued Google in August 2020 for violating the Sherman Antitrust Act. In its suit, the department asserted that Google had “us[ed] [its] monopoly profits to buy preferential treatment for its search engine on devices, web browsers, and other search access points, creating a continuous and self-reinforcing cycle of monopolization.”
In a recent post, I discussed U.S. District Court Judge Amit Mehta’s August 2024 decision that Google had illegally monopolized markets for “internet searches” and for “general search text advertising.”
The judge based his holding on Google’s large payments to other firms to grant it default search-engine status. The judge reasoned that these payments prevented other search engines (such as Microsoft’s Bing) from gaining sufficient scale to compete effectively. The judge found that this practice helped Google obtain more and more data, improving its search quality and ad targeting as compared to its competitors.
The U.S. Supreme Court has emphasized that the goal of antitrust is to promote consumer welfare, not to protect the interests of individual competitors. On appeal, Google likely will assert that consumers benefited from its steady improvement in search quality—a procompetitive and legal result.
Google may also argue that it would have maintained its monopoly even without these third-party payments. In response, the government may focus on hypothesized losses for competition and consumers from the marginalizing of non-Google search engines. It is highly uncertain how an appeals courts would ultimately rule on the legality of Google’s conduct.
In his initial decision, Judge Mehta did not decide on remedies to undo the effects of the illegal monopolization. Those will be dealt with in a second phase of the Google search trial, which is expected to end in August 2025.
The DOJ filed an initial proposed remedy framework with Judge Mehta’s court on Oct. 7. A more detailed DOJ remedies document is expected to follow. Over the next year, the court will hold hearings and hear from experts about the appropriate remedy or remedies in this case.
The DOJ Remedy Framework
Overview
The DOJ’s remedy framework raises major questions. The department proposes remedies dealing with monopolization in (1) search distribution and revenue sharing, (2) generation and display of search results, (3) advertising scale and monetization, and (4) accumulation and use of data.
The DOJ’s discussion of these monopolization questions neglects the importance of ensuring that remedies do not unnecessarily harm consumer welfare and slow innovation.
Notably, the department does not come to grips with the trial court’s recognition of the beneficial aspects of the steady improvement in Google’s search capacities. Remedies that cripple Google’s ability to enhance its search-engine quality in the future may benefit Google’s competitors, but they will harm consumers.
The remedy framework reads as if the remedies it suggests would be costless, which is surely not the case. A balanced analysis would have noted the remedies’ potential costs as well as their benefits. The framework could also have elaborated on how the court might weigh costs versus benefits in seeking to arrive at an optimal remedy set.
We turn now to specific shortcomings of the DOJ remedy framework.
Search-related remedies
The framework notes that “[p]laintiffs [including states that joined DOJ’s prosecution] are evaluating remedies that would, among other things, limit or prohibit default agreements, preinstallation agreements, and other revenue-sharing arrangements related to search and search-related products, potentially with or without the use of a choice screen.”
What are the potential downsides to a broad prohibition? What should be weighed in deciding what sorts of contractual limits are acceptable, and what ones would stifle innovation? These questions regrettably are not addressed.
Behavioral and structural remedies
The framework states that “[p]laintiffs are considering behavioral and structural remedies that would prevent Google from using products such as Chrome, Play, and Android to advantage Google search and Google search-related products and features—including emerging search access points and features, such as artificial intelligence—over rivals or new entrants.”
The suggestion of a partial breakup—with, say, Chrome, Android, or Google Play being “spun off” of Google—is highly problematic. It would destroy the benefits of large integrative efficiencies achieved through the digital ecosystem created by Google’s platform.
Stripped of key parts of its system, Google would be crippled, rendered far less efficient and able to innovate. System improvements that have greatly benefited consumers would be foregone. In mentioning such drastic “remedies,” the DOJ ignores the parts of Judge Mehta’s opinion that praised Google’s improvements and innovations.
Also, antitrust theory raises major concerns about structural relief in a monopolization case, except in cases when a breakup would aid innovation (as, say, arguably in the AT&T breakup, which occurred more than 40 years ago and involved costly regulatory complications absent in the Google case).
Notably, in its 2001 Microsoft decision, the U.S. Court of Appeals for the D.C. Circuit firmly rejected a lower court’s proposed breakup of Microsoft, recognizing that no case had been made to justify such a drastic step.
In light of this history, and Judge Mehta’s recognition of the efficiencies created by Google, it appears highly unlikely at this point that he would view a structural breakup favorably.
Behavioral remedies
The framework says:
Plaintiffs seek to explore remedies that will address the practices and impacts related to user behavior consistent with the evidence adduced at trial. See, e.g., Mem. Op. at 24– 28 (“[T]he vast majority of individual searches, or queries, are carried out [by] habit.”).
This observation on user behavior sounds interesting at first blush, raising questions of behavioral economics. The DOJ and the court should recognize, however, that this is a complicated topic. It may be very hard to evaluate the implications of a possible behavioral remedy. Scholars recognize that the application of behavioral economics to antitrust has limitations and may raise serious problems.
Contractual and ‘other practices’ remedies
The framework also notes that “[p]laintiffs are considering remedies that would, for example, prohibit Google from using contracts or other practices to undermine rivals’ access to web content and level the playing field by requiring Google to allow websites crawled for Google search to opt out of training or appearing in any Google-owned artificial-intelligence product or feature on Google search such as retrieval-augmented-generation-sourced summaries.”
This proposal requires closer analysis, because it could also reduce potential informational benefits that accrue to consumers who do Google searches.
Data use remedies
An especially troublesome framework recommendation is that “[p]laintiffs are considering remedies that would prohibit Google from using or retaining data that cannot be effectively shared with others on the basis of privacy concerns. Plaintiffs are also considering other remedies that would reduce the cost and complexity of indexing or retaining data for rival general search engines.”
Mandatory data sharing raises risks of privacy loss and loss of data security provided by Google to its consumer searches. Such losses would greatly diminish consumer welfare. Mandatory data sharing also would disincentivize Google from enhancing its data-collection practices, reducing the quality of future Google searches—a loss to consumers and to competition on quality.
Furthermore, firms that “free rode” on Google data would have a diminished incentive to improve their own data-collection practices, further reducing welfare and quality-based competition.
AI remedies
The framework also states that:
Google’s ability to leverage its monopoly power to feed artificial intelligence features is an emerging barrier to competition and risks further entrenching Google’s dominance. Accordingly, [p]laintiffs are considering remedies that would, for example, prohibit Google from using contracts or other practices to undermine rivals’ access to web content and level the playing field by requiring Google to allow websites crawled for Google search to opt out of training or appearing in any Google-owned artificial-intelligence product or feature on Google search such as retrieval-augmented-generation-sourced summaries.
In considering such restrictions, the court should keep in mind the costs of potential risks due to broad access to content for third parties. It should also recognize that limitations on Google contracts may eliminate potential efficiencies.
Remedies addressing Google’s use of scale
The framework also suggests that “remedies may address Google’s use of scale, including new advertising technologies such as artificial intelligence (e.g., Performance Max), in enhancing and protecting its general search text ad monopoly.”
It should be kept in mind that limitations on scale economies and the use of AI enhancements may aid individual competitors, but it will also lower the quality of Google’s services and incentives to innovate, harming consumers.
Technical oversight committee
Finally, the framework recommends that a highly bureaucratic technical committee oversee Google’s compliance with court-ordered remedies. If not appropriately cabined, such a committee could have the potential to slow Google’s innovation and incentive to innovate.
The Bottom Line on Remedies
In sum, the DOJ suggests a panoply of remedies that may raise major costs. This is not to say that some aspects of these remedies may not have positive features. It is important that the court recognize that the evaluation of potential remedies should take into account a cost-benefit calculus. If costs are ignored, innovation-based competition will suffer. One hopes that Judge Mehta will be guided by this consideration in dealing with expert witnesses on remedies.
In short, the court should ensure that the antitrust cure is not worse than the purported competitive disease. Perhaps the DOJ will also take this into account when it produces its next, more detailed report on remedies.
The Choice of Remedies Could Have Big Policy Ramifications
The Google search monopolization saga is far from over. Google will seek to have the trial court’s decision overturned on appeal, and the final judicial resolution of this case is far from certain. If, however, the lower court’s illegal monopolization survives on appeal, the lower court’s selection of remedial measures Google must follow is of paramount importance.
Imposing overly intrusive remedies would slow Google’s innovation and harm consumer welfare. Other high-tech innovators (and, in particular, large digital platforms) would have incentivize to “pull their punches” in order to avoid Google’s fate. This would slow American innovation-driven technological advances. The end result would be reduced economic growth and a less dynamic U.S. economy.
Such an outcome would be particularly unfortunate. It would undermine America’s ability to retain global high-tech leadership. China, not American consumers, would be the prime beneficiary.