Google Gets Sued by the Federal Government: What Does This Mean for Marketers?
Could the Google lawsuit break up big tech? How will it impact marketers? We analyze these questions in light of the recent lawsuit.
Attorney General William has pushed to bring an antitrust case against Google along with 11 state Attorneys General
In a surprising move, the Department of Justice along with 11 state Attorneys General filed an antitrust lawsuit against Google on Tuesday, alleging that the company maintains an illegal monopoly on online search and advertising.
The lawsuit could lead the break-up of an iconic company that has become all but synonymous with the internet and assumed a central role in the day-to-day lives of billions of people around the globe.
Get ready, @Twitter. You’re next.https://t.co/pYRgRkBW2V
— Rep. Doug Collins (@RepDougCollins) October 20, 2020
The lawsuit marks the first time the U.S. has cracked down on a major tech company since it sued Microsoft Corp for anti-competitive practices in 1998. A settlement left the company intact, though the government’s prior foray into Big Tech anti-trust – the 1974 case against AT&T – led to the breakup of the Bell System.
The federal government’s complaint against Alphabet Inc alleges that Google acted unlawfully to maintain its position in search and search advertising on the internet. It was joined by state Attorneys General offices represent Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina, and Texas. “Absent a court order, Google will continue executing its anticompetitive strategy, crippling the competitive process, reducing consumer choice, and stifling innovation,” the lawsuit states.
The government said Google has nearly 90% of all general search engine queries in the United States and almost 95% of searches on mobile.
Attorney General Bill Barr said his investigators had found Google does not compete on the quality of its search results but instead bought its success through payments to mobile phone makers and others.
Also read: Key Takeaways From Google’s Search Enhancements for 2020
“The end result is that no one can feasibly challenge Google’s dominance in search and search advertising,” Barr said.
Google’s monopoly in search is a menace to society. They’ve steadily been making search worse by eroding the distinction between ads and organic results, pushing their own services over better alternatives, and shaking down companies for their trademarks. https://t.co/ZgPl79qKxk https://t.co/fD9CWF76Vt
— DHH (@dhh) October 20, 2020
The case could take years to resolve, and the responsibility for managing the suit will fall to appointees of the winner of the Nov. 3 presidential election.
Also read: Do More With Data: Google Launches New Capabilities for Analytics
Interestingly the lawsuit marks a rare moment of agreement between the Trump administration and progressive Democrats. U.S. Senator Elizabeth Warren tweeted on Sept. 10, using the hash tag #BreakUpBigTech, that she wanted “swift, aggressive action.”
Two things can both be true: Bill Barr is a corrupt Trump crony who shouldn’t be AG, and @TheJusticeDept has the power to pursue a legit antitrust suit against Google. The case is clear – in fact, it could have gone further. It must move forward without political interference. https://t.co/7S4trkbDOG
— Elizabeth Warren (@SenWarren) October 20, 2020
What Does This Mean for Marketers?
The regulatory environment is getting tighter around the globe. Earlier in 2019, the European Union fined Google $1.7 billion in 2019 for stopping websites from using Google’s rivals to find advertisers, $2.6 billion in 2017 for favoring its own shopping business in search, and $4.9 billion in 2018 for blocking rivals on its wireless Android operating system.
While it is too soon to predict the outcome of the lawsuit, we could look at Microsoft to understand how a verdict against Google could impact marketers. In 2002, Microsoft reached a settlement with the government and changed some aspects of its commercial behavior but stayed intact. It remained under court supervision and subjected to terms of its consent decree with the government until 2011.
Also read: Google Assistant Can Now Access Third-Party Android Apps
Antitrust experts have long debated whether the settlement was tough enough on Microsoft, though most observers believe the agreement opened up space for a new generation of competitors.
It is quite unlikely that marketing and advertising budgets will be impacted due to the lawsuit now. But as we get closer to a verdict, marketers might need to change their approach to digital advertising in the Google context.
