Google solution is distribution, tech and time

Slow grind. Unwinding a $2 trillion monopoly is no easy task. U.S. judge Amit Mehta decided earlier this month that Alphabet-owned Google illegally fortified its spot as number-one search engine. problem is firm’s utter market domination, built on self-reinforcing troves of data and access to users.

Google handles so many queries - over 90% in United States - that resulting data can minutely fine-tune its answers in a way also-ran competitors can’t. As go users, so goes vertising: marketers want a big audience, and Google has it. An executive at travel site Booking.com said y would “glly spend more with” Microsoft’s rival search engine, Bing - but “ demand is clearly not re.”

From this flows negative effects like Google’s ability to hike prices for vertisers. Thing is, Alphabet enforces this big-get-bigger dynamic by signing exclusive agreements, like a $20 billion deal for default search spot on Apple’s iPhone. court deemed this illegal, since it shuts out competitors.

A second trial will determine what to do about it. Antitrust enforcers are weighing a push to separate out company’s text vertising business, Bloomberg reported. But this goes after symptom, not disease, which is that no competitor can garner enough traffic.

Google’s ability to funnel users from Android, which powers 2.5 billion mobile devices, and Chrome, most popular web browser, make m obvious divestiture targets. Yet history suggests y would struggle: Independent operating systems like once-dominant Symbian, or browsers like Firefox, struggled to compete against tech giants’ bundled services. Mozilla, Firefox’s developer, earned 80% of its operating budget in 2021 from an agreement with Google.

A durable solution requires three factors: distribution, technology, and time. First, stop Google from blocking rivals’ access to users with exclusive distribution agreements. Of course, users might stick with incumbent out of habit - in Europe, where Android prompts users to select defaults, Google’s market share has not budged.

That’s where technology comes in. Mehta points out that, despite breakthroughs like ChatGPT, artificial intelligence is not yet displacing search. But if Google can’t trap users, AI can begin snagging share as it improves – as OpenAI is doing with a deal to integrate with Apple’s voice assistant.

What that takes, ultimately, is time. Google will appeal, and resolution may take years. Technology moves faster than courts, but IBM and Microsoft were distracted by past antitrust trials, missing out on new markets like smartphones. If Google is at least restrained from sewing up se novel areas, rivals will have a fighting chance.

Context News

A U.S. judge ruled on Aug. 5 that Alphabet’s Google h violated antitrust law through exclusive agreements which me Google default search engine for users of browsers and handsets. Judge Amit Mehta said company h monopoly power in two markets, general search services and general search text vertising. A second trial will determine potential remedies, possibly including breaking up $2 trillion company. Alphabet has said it will appeal.