Google has had an extraordinary year in terms of revenues and profits. On the litigation front, however, it has been kind of rough on the search engine giant. It matters to us because past and future litigation could ultimately change how digital marketers interact with Google.
As a digital marketing agency offering services in SEO, PPC, content marketing and more, we need to always be cognizant of how Google does business. After all, they are a dominant force in both online search and PPC (pay-per-click) advertising. Should the company suffer too many legal blows, we could find ourselves having to learn entirely new ways of doing things to accommodate other search engines and ad networks.
The Case Against Search Services
No doubt Google and other big tech companies need to fend off legal issues all the time. It is part of modern business. But there are two particular cases that could mean substantial changes in the future. The first is an antitrust case decided by a U.S. District Court this past August.
District Judge Amit Mehta ruled that Google was in violation of antitrust laws in relation to its search business. The court determined that Google’s virtual monopoly over online search constituted an unlawful dominance of search engine services and associated text ads.
Google’s defense was rooted largely in claims that it simply produces a superior product. They maintain that their practices do not prevent any other tech companies from competing with a better search engine.
What the Court Found
The details of the case are far too complex to get into here. But three of the court’s findings could indicate future corrective action that fundamentally changes how Google does business. Those findings are as follows:
- Google has been deemed illegally monopolistic in both general search and search advertising.
- Google was found to have monopoly power in both markets – their search queries are nine times greater than all other search engines combined.
- Google’s exclusive agreements with other big tech companies prohibit competition in violation of the Sherman Antitrust Act of 1890.
Google obviously disagrees. There may be others in the tech industry that disagree as well. But what does it all mean to digital marketers and their agencies? If Google loses its appeal, the corrective action ordered by the court will be monumental.
Impacts On Online Search
In deeming Google’s business practices monopolistic, the court directly attacked the company’s business model. It is hard to imagine corrective action that would not include forcing Google to end its service agreements with companies like Apple and Mozilla, similar to the court ruling that forced Microsoft to stop requiring the Explorer web browser as the default on new computers some two decades ago.
Under such a scenario, digital marketers would have to become more familiar with how Bing, DuckDuckGo, Yahoo!, and Yandex operate. Even smaller players like Startpage and Brave Search might have to be considered. It could completely upend everything we know about SEO.
It’s also possible that the court could order a Google breakup similar to the Ma Bell (Bell System) breakup in 1982. That breakup fundamentally changed how telephone companies provide landline services. A Google breakup could reverberate just as deeply.
The Ad-Tech Network Suit
Even as Google was defending itself against the search services suit, the DOJ was preparing litigation in relation to the company’s ad-tech network. The case went to trial in September; testimony concluded in early October. Closing arguments are likely to be presented in November and then the court will issue its ruling.
At the heart of the case is the question of whether Google has monopolized the ad-tech market. The company has been accused of:
- Maintaining an illegal monopoly over ad-tech tools
- Utilizing anticompetitive practices to control the ad-tech stack
- Abusing its market dominance to influence pricing
- Harming publishers through its market dominance abuse
Once again, Google’s defense is that it has merely created a superior product that streamlines PPC and other forms of digital advertising. Google also maintains that:
- Other competitors, like Microsoft and Meta, remain competitive.
- Its pricing structure is in line with industry standards.
- Customers utilize their products because they work.
There are a lot of technical aspects to this case. Yet it could very well hinge on how the court ultimately defines an ad market. From the DOJ’s perspective, online advertising is divided into three separate markets: publisher add servers, advertiser networks, and add exchanges.
Three Markets or One?
Where the DOJ sees three separate markets, Google sees just one. The court needs to decide which party is correct. If digital advertising is encapsulated in a single market as Google alleges, the company has a much better chance of convincing the court that their dominance is only due to a superior product. But if the court sides with the DOJ, it should be fairly easy to find Google’s practices monopolistic.
The Practical Impacts
In all likelihood, a ruling against Google would mean the divestiture of at least some of the company’s ad-tech assets. Digital marketers would have to wait to see how divestiture would take place. Depending on who gets what, we might find ourselves back at square one and trying to figure out how to best utilize PPC for digital marketing purposes.
The good news is that the fundamentals of PPC advertising are well established and intact. Forcing Google to divest itself probably would not change how digital ads are structured. It might not even impact the PPC model as a whole. But because PPC is intrinsically tied to organic search, Google losses in both cases could change the way some forms of online advertising operate.
There is no way to predict how this will ultimately turn out. All we can do is wait for the courts to rule. Ultimately, any corrective action is years away. So in the meantime, Webtek Digital Marketing will continue to do what we’ve always done: provide industry leading digital marketing services in Utah and across the country.
