If Google is banned from buying search engine defaults, Bing might be hit by the same ban or at least they'd no longer be bidding against Google so now they'd just have to outrun... DDG?
> If Google is banned from buying search engine defaults, Bing might be hit by the same ban
If Google is banned from protecting it's monopoly by buying default position, no one else would be affected unless they first replaced Google’s monopoly.
> or at least they'd no longer be bidding against Google
This, however, is a real issue. The only reason Bing offers big numbers is to force Google to offer more.
I think this is the best explanation for Mozilla's position on this. It would be a death blow for Mozilla if google was taken out of the running altogether, simply because then their BATNA would be DDG. It's not clear if anti-trust action against google will affect Google's ability to buy default traffic from Mozilla, which is why they haven't taken a particularly strong position yet. Some forms of anti trust action could help Mozilla by bolstering competitors, but other types of actions could hurt Mozilla. It seems like a wait and see kind of thing.
BTW every time competition comes up in this case we should probably ask: competition in what? The case appears to be focusing on search engines and ad networks, but trying to create more competition in search could end up reducing competition in browsers (hence Mozilla's concern about collateral damage). Google is so huge and has so many interlocking monopolies that I don't envy anyone who's trying to fix any of it.
Even if browser competition is important, and even if that (currently) requires a stream of money to flow to Mozilla, it doesn't follow that we should allow unlawful abuse of other monopolies in order to support that. Of course, it's possible the courts decide the status quo is lawful and there's no change.
In a hypothetical situation where you separate Google Ads from Google Search from Google everything else, Google search would still want to pay browsers for default search, and Chrome, Firefox, Safari, etc would still have a revenue stream; however, they would only be able to do so to the extent of their web search revenues. Likely the baby Googles are still dominant in all of their fields, but it's not as assured, because there will be less cross promotion, exclusivity, and tying.
If you instead leave Google whole, and prohibit paying browsers for default search, you still have internal payments (de facto, if not explicit) to Chrome and Android that drive product decisions like defaults and putting an unremovable search bar in the default launcher.
It could go multiple ways. The limits of the CCPA, GDPR, and likely some future US federal data privacy act do constrain the possible outcomes.
I'm not sure my opinion of this should happen or that should happen matters one bit. In the US Republicans and Democrats hate Google. In the EU the regulators detest them. In China they are locked out of the market and its a laugh that any executives think they would be allowed in. What that means is Google has almost no political capital today and is basically fucked, short of the billions of dollars they will spend on lawyers.
What Google is or isn't banned from doing depends on how the end "Google" looks. The pending state AG charges likely will cover a lot more of those details. The DOJ thing was known to have been rushed, they wanted it filed this past summer, but this week probably was the last possible window prior to the election. Ironically while the DOJ is now accused of rushing this case because of White House pressure, the Democrat State AGs are saying there actually should be more charges against Google, not less.
That doesn't make things look better for Google, it makes them much worse than we've seen so far. Google today certainly looks a lot different then during the Obama administration when a Google lobbyist or employee would visit the White House on average once a week. What happened there is a mystery to me.
There are multiple possible outcomes here. Who knows when anything will happen, but, my guess is some combination of these things, but not all together -
- Split the search ad business from search engine
- Divest Chrome/Android from Alphabet
- Force them in to some transparent search ad exchange arrangement, meaning not just advertisers but other search engines
Whatever the outcome here, Microsoft is probably the biggest winner. Facebook wins in terms of any incremental ad dollars they gain from Google advertisers. Amazon is also positioned very well if they chose to take advantage of it.
Apple is probably in the worst shape next to Google, as it is estimated 15%-20% of their profits come from the Google arrangement. Combined with changes to Apple's tax rates globally, I could see this chopping Apple's value in half. If 50% of Google's US search traffic is coming from Apple, and half of the users who actually click on ads and buy stuff never leave the default search, the outcome for Alphabet's finances is really, really bad.
This matters a lot. There are users who install adblockers and will directly navigate to google.com no matter what. Those users are worthless to Google. The users that matter are the ones who don't change the default search, possibly click ads for every single search they do that has ads for the top results, and those users do buy things after clicking the ads. If Google lost half of those users, do the math.
Google/Alphabet's cash cow is paid search ads. Anything that sticks a wrench in this business model will bring an end to their golden age of doing a bunch of stuff that loses money while riding a tsunami of background cash flow. If they are split up, meaning Search, Ads, and Youtube, that probably is the best $ outcome for shareholders longer term, and Alphabet's ultra wealthy employees probably still get sick stock options.
