monopoly power. “[B]ecause innovation can increase an already dominant market share and further delay the emergence of competition, even monopolists have reason to invest in R&D.” Id. at 57. The same is true of decreasing price: “[A] price lower than the short-term profit-maximizing price is not inconsistent with possession or improper use of monopoly power.” Id. (citation omitted). Finally, “[t]he defendant’s innocence or blameworthiness . . . has absolutely nothing to do with whether a condition constitutes a barrier to entry” evincing monopoly power. AT&T, 740 F.2d at 1001.
Plaintiffs attempt to prove that Google has monopoly power in the market for general search services through both direct and indirect evidence. Although they offer little direct evidence, the indirect evidence supporting the structural approach—a dominant market share fortified by barriers to entry—easily establishes Google’s monopoly power in search.
- 1. Direct Evidence
Plaintiffs’ direct evidence is limited. They note that Google’s immense revenues and large profit margins, FOF ¶¶ 8, 57, 259, allow it to capture significant surplus from the challenged contracts, see U.S. Pls.’ Proposed Findings of Fact, ECF No. 839 [hereinafter UPFOF], at 27–28; Tr. at 4775:21-24 (Whinston) (“[T]he size of profits and . . . when firms have a really, really big advantage, that is very likely to coincide with market power.”); id. at 415:8-10 (Varian) (agreeing that in some cases, “large profit is one indicator of monopoly”).
In addition, Plaintiffs point to Google’s admission that it does not “consider whether users will go to other specific search providers (general or otherwise) if it introduces a change to its Search product.” UPX6019 at 365–66. Google’s indifference is unsurprising. In 2020, Google conducted a quality degradation study, which showed that it would not lose search revenue if were to significantly reduce the quality of its search product. FOF ¶ 134. Just as the power to raise
154
