>On the other hand, the case that Google is going to make (and which I think is going to be really hard for the government to overcome) is this: we (google) give our product away for free and so do our competitors. What’s more, the cost of switching search engines is literally zero: just type Bing instead of Google.
That's not a defense, though.
So the government is unlikely to prove anti-competitive outcomes by arguing an increased cost to consumer, but that's not what they seem to be arguing. Going from Ohio v. Amex, The other relevant ways to prove anti-competitive outcomes are through a decrease in product quality in the relevant market or market power and evidence of harms to competition.
The government appears to be arguing that product quality is lower and that Google has market power and has engaged in conduct that harms competition. If those are results from anti-competitive behavior then that is an antitrust violation, and should be.
It is a defense. It is the defense that they will use and probably the only one they need.
The government lost Ohio vs. Amex, which was in any event about a two sided market. Google is definitely active in two sided markets but this case does not make those claims.
Good luck to DoJ if they are arguing that the quality of the product is lower! They are going to fall on their faces.
I’m not saying google doesn’t engage in anticompetitive behavior. There is a good case to be made on various things they do. But to go at google for “monopolizing the search market” is just pointless. The DoJ should bring a stronger case! Such cases can be made.
It is a defense against evidence of increased cost to consumers, ok, but that's again not the argument here. Not a 'perfect' defense might have been better phrasing since it's not a defense against the arguments DOJ appears to be making.
It doesn't matter if the government lost Ohio v. Amex, and it doesn't matter that it's about a two-sided market - I was using the Court's reasoning and outline of other ways to demonstrate anti-competitive outcomes. When the Court phrases something in their decisions a certain way or creates a test, it doesn't matter if the government fails the test in that case - the test can still be applied in later cases and in lower courts. Here, it wasn't even a new test, it was just a recent illustration of an earlier one.
In Ohio v. Amex, the Court found that Amex improved product quality and increased transaction volume generally. Regardless of the fact that the government would have failed because of the 'both sides of the markets have to have anti-competitive outcomes' elements, the way to see if it meets the bar is cost, quality and volume.
It's difficult in this market to make the case that decreased cost counters decreased quality or competition because the competitors also operate at zero cost to consumers. I'm not so sure they will fall on their faces arguing that the quality of the product is lower, frankly - we'll see. Either way, cost as a balance for anti-competitive behavior should not be a panacea here.
Zooming in on just search: I would have assumed once reaching a monopoly position in search it then becomes illegal to then use your influence on Android and payments to Apple and Mozilla to maintain that monopoly (by making 95% of "new" consumers opt-in to your monopoly by default and not by explicit choice).
Having some kind of default search selection come up on fresh installs of Android, iOS, Macs and Firefox wouldn't really hurt consumers, and barely hurt Google (it became dominant through quality and people remember that). Ironically (and sadly) preventing Google using it's influence over default seach options would probably harm Mozilla the most... but it should still happen.
The press release doesn't mention it, but the actual court document asks the court to:
"Order the divestiture of, at minimum, the Google Ad Manager suite, including both Google’s publisher ad server, DFP, and Google’s ad exchange, AdX, along with any additional structural relief as needed to cure any anticompetitive harm"
Some of those other claims are quite strong, IMO. There’s a good case to be made there.
However, asking for a structural remedy like divestiture after so much time is going to be a tall order, to say the least. Generally courts don’t like to meddle directly in the way firms are run (correctly, in my view).
That's not a defense, though.
So the government is unlikely to prove anti-competitive outcomes by arguing an increased cost to consumer, but that's not what they seem to be arguing. Going from Ohio v. Amex, The other relevant ways to prove anti-competitive outcomes are through a decrease in product quality in the relevant market or market power and evidence of harms to competition.
The government appears to be arguing that product quality is lower and that Google has market power and has engaged in conduct that harms competition. If those are results from anti-competitive behavior then that is an antitrust violation, and should be.