Google's dominance in search and digital advertising markets under antitrust scrutiny

Google Antitrust Case

What is Google's Core Business?

From its conception in 1995 until now the company's motto is "The Perfect Search Engine." Google provides search technology to approximately 597 million internet users. Google's main function is to systematically process the world's data and communicate it in simple and practical applications.

Google has been an extremely successful business venture. The company is the top search engine in the U.S. And has been for years now. Google is a worldwide business with global internet users now outnumbering the United State user base. The company has two key income sources. First it promotes its search technology to businesses and the other is to sell advertising space on Google and other sites throughout the internet. The latter supports the financial well being of the company.

It's the wide scope vision of Google's activities and diversity that makes it suceed and continues to grow. Google's goals are to improve their services by introducing new technologies, business solutions, and creative advertising concepts.

Google's versatile appearance is not a reflection of its core business. Rather, it stems from the vast number of complements to its core business. Complements are, to put it simply, any products or services that tend be consumed together. Think hot dogs and mustard, or houses and mortgages. For Google, literally everything that happens on the Internet is a complement to its main business. The more things that people and companies do online, the more ads they see, and the more money Google makes (Carr).

US Antitrust Laws

In 1890 the U.S. passed the Antitrust Act which was created to protect patrons from greedy businesses willing do everything to control their particular market and maintain dominance.

There are two basic antitrust laws in the United States -- the Sherman Act and the Clayton Act; both are enforceable either by the Antitrust Division of the Department of Justice or the Federal Trade Commission Together, they spell out the conduct and activities prohibited in economic, market transactions. There are also some statutes directed to specific industries or types of transactions which indicate the likely antitrust consequences for economic conduct in those areas (Rubin).

The Sherman Act forbids restraint of trade and prevents monopolization of companies. The Clayton Act contains the damage provisions of the antitrust laws.

The Potential U.S. Case Against Google

An antitrust suit was filed against Google this year claiming the search giant is violating the antitrust laws. The Justice department has been looking at Google for some time now. In the fall of 2007, while Google was prepared to commit to a search ad deal with Yahoo, the justice department was planning to file suit if the deal hadn't fallen through with Yahoo.

Google is now becoming everyone's favorite antitrust target, rapidly replacing Microsoft. In February of this year a company called TradeComet.com, which operates a business-focused search service called SourceTool.com, filed an antitrust suit against Google, alleging that the much larger company engaged in illegal, predatory behavior intended to drive the smaller company out of business. They claim Google refused to stop engaging in predatory conduct to block search traffic by imposing massive, unjustified price increases (Hof).

From Google's standpoint SourceTool.com is not really a competitor of Google; it's more of a partnership. SourceTool's business concept is to run Google ads. In fact Google profits from its arrangement with SourceTool so it wouldn't be in Google's best interest to see the company go under.

SourceTool.com has decided to get serious about the suit and has hired the former head of the Antitrust Division of the Department of Justice, lawyer Rick Rule.

In the end, as we all know, this issue will be one for the courts to decide. The federal court system can be very discriminating about what cases they use to decide important issues -- so even if panelists agree that Google is a monopoly, they have to find that its predatory practices harmed SourceTool for the case to be successful (McCollum).