\u201cWe live on their lands,\u201d Hansson said about the tech monopolies. <\/p>\n\n\n\n
\u201cIt is a very uncertain place to live.\u201d <\/p>\n\n\n\n
It is incredibly frightening, he said, to know that \u201cour business can disappear essentially from one day to the next if these kings of the digital platforms decide\u2014out of spite, out of negligence, out of any of the other impulses they might have\u2014to do what they do. And then we end up, as business people, as creators, feeling like there is just nothing we can do.\u201d<\/p>\n\n\n\n
Is a rescuer on the way? <\/p>\n\n\n\n
Last week, on October 20, the U.S. Department of Justice filed an antitrust lawsuit<\/a> against Google, alleging that the search giant is illegally protecting its search monopoly.<\/p>\n\n\n\n It is worth bearing in mind that the defendant in the federal lawsuit is Google LLC, the search-focused subsidiary of its parent company Alphabet, Inc., (the fifth largest company in the world<\/a>, as measured by market cap). The lawsuit, thus, is focused exclusively on Google search and search advertising\u2014it does not touch directly on any of the many other ventures Alphabet is involved with.<\/p>\n\n\n\n So what does this lawsuit mean for internet search? <\/p>\n\n\n\n As everyone in the SEO world (Search Engine Optimization–the practice of building and promoting websites so they appear high up in internet searches) knows, \u201csearch\u201d really just means Google. Why? <\/p>\n\n\n\n Because, as the lawsuit notes, \u201cGoogle in recent years has accounted for nearly 90 percent of all general-search-engine queries in the United States, and almost 95 percent of queries on mobile devices.\u201d<\/p>\n\n\n\n SEO strategists, and really anyone who relies on traffic from Google for their business, has experienced something like Hansson describes in terms of living on the Google lord\u2019s lands. <\/p>\n\n\n\n Matt Berman is the President of Emerald Digital<\/a>, a full-service digital marketing agency in New York City and New Orleans. <\/p>\n\n\n\n \u201cRight now, we take Google as gospel,\u201d he told me. <\/p>\n\n\n\n \u201cWe code our websites specifically for their crawlers. We write our copy the way they like it. We write our ads to their specification.\u201d<\/p>\n\n\n\n And at least in part because of that enforced dependence, SEO and other digital marketing professionals have an uneasy relationship with Google.<\/p>\n\n\n\n \u201cAs a niche SEO service provider, I’m surrounded by a community which itself has immense mistrust in Google,\u201d my friend Greg Heilers, one of the owners of the SEO firm Jolly<\/a>, told me.<\/p>\n\n\n\n Heilers also identifies with Hansson’s comments.<\/p>\n\n\n\n “Anyone running a search-dependent business wakes up and goes to sleep monitoring Google’s moves\u2014that is, unless they’re an old hand and know their nerves are better served keeping a ~72-hour news cycle approach versus daily,” he said.<\/p>\n\n\n\n “In this context, it’s easy to see how Google’s dominance makes it just as or even more impactful than the greater economy.”<\/p>\n\n\n\n How did Google get so dominant that the company name is now synonymous with \u201csearch\u201d? That they have innovated and created a great product is not in dispute. But does Google account for 95 percent of mobile internet searches sheerly through excellence\u2014or have they broken the rules to get there?<\/p>\n\n\n\n \u201cIt\u2019s true that other search engines like DuckDuckGo exist,\u201d Heilers said. <\/p>\n\n\n\n \u201cWhat\u2019s more, the downfall of greats like Yahoo are well known to be more market awareness failures than malfeasance on Google\u2019s part.\u201d<\/p>\n\n\n\n And Google itself, as you might imagine, is not pleased with the suit. They deny they have broken the law. Kent Walker, SVP of Global Affairs, warned in the company\u2019s official response to the lawsuit<\/a> that the suit would \u201cartificially prop up lower-quality search alternatives, raise phone prices, and make it harder for people to get the search services they want to use.\u201d <\/p>\n\n\n\n As Walker wrote on October 20:<\/p>\n\n\n\n \u201cToday\u2019s lawsuit by the Department of Justice is deeply flawed. People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives.\u201d<\/p>\n\n\n\n But to my eyes, Walker\u2019s response resembles the pumpkin patch hay ride where I take my daughter every year. You set up a few straw men around the perimeter of the pumpkin patch, and then drive around in the back of a tractor and pummel them with miniature pumpkins.<\/p>\n\n\n\n Nowhere in the complaint does the DOJ claim that people are \u201cforced\u201d to use Google, or allege that no one knows how to find alternatives. But, armed with diagrams and GIFs, those are the \u201cclaims\u201d Walker spends the rest of his response pummelling.<\/p>\n\n\n\n But that is not what the lawsuit says at all. It alleges that Google uses a combination of carrots (like revenue-sharing) and sticks (exclusivity contracts) to force manufacturers and developers to always make Google the default choice anytime a desktop or mobile user searches the internet. <\/p>\n\n\n\n One of the most shrewd ways Google pulled this off is the two-step \u201ctrap\u201d they built for mobile manufacturers and developers, which the lawsuit explains in detail. Unlike Apple\u2019s \u201cclosed ecosystem,\u201d Google made their Android operating system open-source, which was a boon for developers who could easily modify operating systems based on the Android source code. As the complaint points out, \u201cdeveloping an operating system from scratch is extremely expensive.\u201d<\/p>\n\n\n\n But there is no such thing as a free lunch. The open-source character of Android was the first piece of cheese in the \u201ctrap,\u201d which enticed developers to build Android-specific applications and encouraged manufacturers and carriers to adopt the Android operating system.<\/p>\n\n\n\n It felt relatively risk-free:<\/p>\n\n\n\n \u201cAn open-source model suggested that they [mobile phone manufacturers and carriers]\u2014and not Google\u2014would ultimately retain control over their devices and the app ecosystem on those devices,\u201d the lawsuit says.<\/p>\n\n\n\n But as more carriers and manufacturers adopted Android, more developers built apps for Android, which consumers enjoyed, thereby enticing consumers to purchase more Android devices. This, in a self-reinforcing cycle, incentivized more carriers and manufacturers to adopt Android, thus more apps, more customers, and on ad infinitum.<\/p>\n\n\n\n The second piece of cheese in the trap was\u2026 cheese, i.e., cash.<\/p>\n\n\n\n \u201cTo help the Android ecosystem achieve critical mass and to advance the network effects, Google ‘shared’ its search advertising and app store revenues with distributors as further inducement to give up control,\u201d says the complaint.<\/p>\n\n\n\n But Google had sticks in its arsenal as well\u2014not just carrots. The sticks, used to make Google search the default option at every \u201csearch access point\u201d (e.g. Chrome, Google search app, Google search widget, Google Assistant), were exclusionary agreements that manufacturers and carriers had to sign in order to get access to the Android apps that consumers loved, and in order to keep getting the search advertising revenue-share. So in this way, the carrots turned into the sticks.<\/p>\n\n\n\n Their strategy was undoubtedly shrewd, even conniving, but being smart is not illegal. So why is the DOJ suing Google? What are they supposedly guilty of? <\/p>\n\n\n\n The DOJ lawsuit is brought under Section 2 of the Sherman Act, an anti-monopoly law originally passed in 1890. Section 2 is designed to protect the market from companies that possess monopoly power and use it to squeeze out their competitors.<\/p>\n\n\n\n \u201cThe fact that a company possesses and abuses a high degree of market power warrants antitrust scrutiny under Section 2,\u201d explains<\/a> the American Economic Liberties Project.<\/p>\n\n\n\n \u201cA U.S. monopolization case against Google is long overdue. The sheer number of markets Google dominates\u2014mobile operating systems, general search, online video, mapping, email, display advertising, and browsers\u2014gives Google unprecedented power over online commerce.\u201d<\/p>\n\n\n\n And as we have seen above, the use of carrots and sticks (and carrots turned into sticks) certainly appears to be an abuse. And SEOs and other marketers have felt the ill effects of Google\u2019s power firsthand.<\/p>\n\n\n\n One is the gradual cluttering of the SERPs (Search Engine Results Pages–the list of results that pops up whenever you Google something). While Google SERPs used to be the gateway to the internet, they have gradually become billboards for Google itself. How so?<\/p>\n\n\n\n One is the placement of paid ads above the organic results.<\/p>\n\n\n\n \u201cThe number of ads keeps increasing,\u201d Stephen Roe, founder and head of digital strategy at Thoughtful Prose<\/a>, said.<\/p>\n\n\n\n \u201cIt\u2019s currently at four, which harms the user experience.\u201d But it is not just ads. <\/p>\n\n\n\n \u201cGoogle mines data from websites for featured content, displaying them without permission and driving down clicks,\u201d Roe said.<\/p>\n\n\n\n The various kinds of \u201cfeatured content,\u201d like snippets that directly answer your question, \u201cPeople also ask\u201d boxes, Knowledge panels with Wikipedia summaries–all of these pull content from third-party sites and display them directly on the SERP. <\/p>\n\n\n\n These are sometimes helpful for users–they reduce the amount of clicking and scrolling you have to do to get the answer you want–but they really just constitute Google ripping other people\u2019s sites off and taking the information for themselves, which prevents the owners of these third-party sites from getting the traffic and engagement that their own content has earned.<\/p>\n\n\n\n Of course, Google has its own content too, like YouTube. Notice that when you search for a video, Google almost exclusively returns YouTube results (despite the existence of many, many video hosting sites).<\/p>\n\n\n\n Between featured content displayed directly on the SERP and Google web properties getting pride of place on the SERP, fewer than half (42 percent)<\/a> of Google searches lead to someone clicking organically onto a third-party site not owned by Google.<\/p>\n\n\n\n Experts in \u201clocal SEO,\u201d i.e.<\/em> SEO for locally-focused searches like \u201cgardener near me,\u201d have also been watching Google take over the top of the SERP with ‘Google Guaranteed’ local results which route the entire customer acquisition process through Google.<\/p>\n\n\n\n As third-party site owners see ever-declining traffic from the only meaningful search engine in town, they have Featured Content, Google AdWords, Google Guaranteed Results, and Google awarding pole position to its own properties to thank. <\/p>\n\n\n\n And even business owners<\/a> and marketers who pay for ad space on Google worry that the tech giant is taking advantage of them.<\/p>\n\n\n\n \u201cWe have noticed that Google’s cost per click on search ads has risen substantially for terms that don’t even have other advertisers bidding on them,\u201d Max DesMarais said. DesMarais is a digital marketing strategist with Vital Design<\/a> and also the owner of his own website, hikingandfishing.com<\/a>.<\/p>\n\n\n\n \u201cA big example is with our client’s brand names, where no other ads are showing up, yet our own client has to pay multiple dollars for one click on their own, non-competitive brand name.\u201d<\/p>\n\n\n\n But not everyone is convinced that any of this constitutes an anti-competitive abuse. John Tamny, editor of RealClearMarkets<\/a> and Director of the Center for Economic Freedom at FreedomWorks<\/a>, criticized the lawsuit in Forbes<\/em><\/a>.<\/p>\n\n\n\n Noting that MySpace had more traffic than Google back in 2006, that Microsoft’s Internet Explorer got beat out by Firefox and Chrome, and that upstart Zoom (IPO\u2019d in 2019) has overtaken GoToMeeting and Google Meet as the videoconferencing software of choice for locked-down remote workers, he wrote, \u201cthat dominance in the technology space\u201d is \u201cephemeral.\u201d <\/p>\n\n\n\n Further, Tamny argues that Google\u2019s incredible market power actually ensures it will be disrupted–like moths to a flame, VCs and entrepreneurs are attracted to industries with companies that have monstrous valuations, ensuring that competition is always around the corner. <\/p>\n\n\n\n But Tamny\u2019s argument takes a weird turn:<\/p>\n\n\n\n \u201cIt\u2019s apparent that Google\u2019s long-term dominance is only apparent to a Department of Justice that is only capable of seeing the present. Think about it. Google surely doesn\u2019t see its market power as endless. If it did, why would it pay Apple for prominent real estate on its products?\u201d<\/p>\n\n\n\n If you are confused, join the club. Tamny\u2019s article is supposed to be about why the Google lawsuit is stupid. But instead he proves that Google needs to be sued! He\u2019s making the Justice Department\u2019s argument for them. <\/p>\n\n\n\n Google\u2019s market power is not actually endless, as Tamny correctly points out. Someone with a better business and better product very well could disrupt them. Google knows this, and that is exactly why it pays $8 billion to $12 billion to Apple every year–to artificially preserve its market power!<\/p>\n\n\n\n That is, after all, precisely what the lawsuit alleges:<\/p>\n\n\n\n \u201cApple\u2019s RSA incentivizes Apple to push more and more search traffic to Google and accommodate Google\u2019s strategy of denying scale to rivals. For example, in 2018, Apple\u2019s and Google\u2019s CEOs met to discuss how the companies could work together to drive search revenue growth. After the 2018 meeting, a senior Apple employee wrote to a Google counterpart: \u2018Our vision is that we work as if we are one company.\u2019\u201d<\/p>\n\n\n\n What\u2019s it called when multiple companies conspire to freeze out competitors and raise their profits? Sounds an awful lot like a cartel to me.<\/p>\n\n\n\n But I spoke to a few SEOs who nevertheless think the lawsuit is unnecessary. <\/p>\n\n\n\n \u201cThe methods mentioned in the suit seem to be standard business practices aimed at improving their product and keeping their market share,\u201d John McGhee, Managing Partner of Webconsuls LLC<\/a>, said.<\/p>\n\n\n\n \u201cThe vast majority of Google’s information is user-generated, Google Ads is an auction based system so prices are user generated, and people can easily switch their search engine. Essentially Google is a monopoly because we the people made it that way.\u201d<\/p>\n\n\n\n On Twitter, Mark Cuban also came to Google\u2019s defense with a similar argument. A back-and-forth<\/a> with anti-monopoly scholar and activist Matt Stoller of the AELP followed. <\/p>\n\n\n\n Cuban downplayed the importance of paying for default settings. Stoller, however, replied with the same point<\/a> that somebody needs to tell Tamny: \u201cIf defaults have no value and the product is just better, then Google is pissing away $11B a year for no reason. If defaults have value there’s market power at work.\u201d<\/p>\n\n\n\n In other words, Google sees the default position as valuable. So valuable, in fact, that they are willing to pay Apple a sizable chunk of their profits in order to lock down that default position. According to the lawsuit, those ad revenue-sharing payments from Google \u201cmake up approximately 15-20 perent of Apple\u2019s worldwide net income.\u201d<\/p>\n\n\n\n Cuban, however, compared paying to make a search engine default with paying for advertising.<\/p>\n\n\n\n In reply, Stoller said, \u201cAustralian and British competition authorities both found defaults are a meaningful barrier to entry and consumer switching is relatively limited. They also are defensive, a way of excluding consumers from trying other products.\u201d<\/p>\n\n\n\n So is making Google search, Google Chrome, and other Google search access points the default merely advertising? Or is it anti-competitive behavior? McGhee says it \u201cis no different than paying for shelf positioning in grocery stores.\u201d <\/p>\n\n\n\n But Jameson Zimmer, a strategist at Centerfield Media Holdings<\/a>, disagrees with this assessment.<\/p>\n\n\n\n \u201cI’m often struck at how relatively unsophisticated the average consumer that hits one of my sites is. A huge percent of them, if they engage with chat or contact, can’t even tell the difference between a third party site like e.g. Wirecutter [a product review site owned by The New York Times] and the product\/company they Googled,\u201d Zimmer said.<\/p>\n\n\n\n \u201cThe expectation seems to be, \u2018If I type {product} into Google, I will land on the {product} website.\u2019 This, to me, really supports the case that \u2018defaults matter\u2019 as indicated by the US case \u2014 for all intents and purposes, for the average user, Google is the internet.\u201d<\/p>\n\n\n\n Now for the multi-billion dollar question: What will happen next? Can the Justice Department win the case? And even if they do win, what will it change for SEO and for the average internet search experience?<\/p>\n\n\n\n \u201cMost antitrust cases settle or dismiss before trial,\u201d the AELP notes<\/a>. But Hansson, toiling away on Lord Google\u2019s lands, hopes that the case will not end in a settlement.<\/p>\n\n\n\n \u201cThe most important thing for me is to hope that this doesn\u2019t just turn out to be a lame fine,\u201d he said at the AELP event last week.<\/p>\n\n\n\n \u201cThat\u2019s the worst thing that could possibly come out of this.\u201d<\/p>\n\n\n\n Why? At that event, Commissioner Rohit Chopra of the Federal Trade Commission explained that settlements actually incentivize rulebreaking. Granting total immunity to executives and foregoing a stipulation to change behavior ensures that nothing ever gets better.<\/p>\n\n\n\n \u201cA settlement with a fine and some paperwork is not going to fix the problem,\u201d Chopra said. <\/p>\n\n\n\n \u201cIt is only going to incentivize bad behavior going forward.\u201d If a company can act unethically\u2014even illegally\u2014and only have to pay a fine, then it will just factor the fine into the cost of doing business. If you want to get ahead, then you just have to pay for it, and the economic benefit of cheating will end up far outweighing the cost.<\/p>\n\n\n\n The SEOs I spoke with envisioned a variety of outcomes. Berman, of Emerald Digital, imagines a Google break-up having somewhat mixed results.<\/p>\n\n\n\n \u201cIf I see an ad about polo, it’s just an interruption. If I see an ad about guitar pedals, I’m immediately interested. Google has used its monopoly position to gather this data,\u201d he said.<\/p>\n\n\n\n \u201cTheir data collection extends to users who use their search products, GMail, Android, location services, maps, and more. Breaking up Google would mean their data collection efforts would suffer. This is great for users, but bad for advertisers.\u201d<\/p>\n\n\n\nGoogle Conquered the Territory<\/h2>\n\n\n\n
How Google Did It<\/h2>\n\n\n\n
The Mobile Search Trap<\/h3>\n\n\n\n
Is Google Breaking the Law?<\/h2>\n\n\n\n
Negative SEO Effects <\/h3>\n\n\n\n
![\"\"](\"https:\/\/www.businesspundit.com\/wp-content\/uploads\/2020\/10\/youtube-exclusivity.jpg\")
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In Google’s Defense<\/h3>\n\n\n\n
Future Outlook for the Lawsuit<\/h2>\n\n\n\n
What the SEO Community Thinks<\/h3>\n\n\n\n