expensive,” amounting to a “multi-billion dollar investment.” Tr. at 2261:11-19, 2268:6-7 (Giannandrea); DX374 at 301; see also UPX266 at 986 (“[A] world class search engine is at least a $2–4B/year R&D investment[.]”). Neeva founder, Dr. Sridhar Ramaswamy, testified to the same effect. Tr. at 3672:7 (Ramaswamy) (stating that Neeva required “two substantial [venture capital] funding rounds”). Google’s internal estimates also are consistent with this testimony. FOF ¶ 51 (assessing that it would cost Apple billions to compete in the search market). And those capital expenditures are required before the additional, multi-billion-dollar investment needed to build and maintain an ad platform or other means of monetization. FOF ¶ 55.
High capital costs thus constitute a substantial barrier to entry. See Marathon Oil Co. v. Mobil Corp., 669 F.2d 378, 381 (6th Cir. 1981) (concluding that the relevant market was “characterized by high barriers to entry because of capital requirements” of about $1 billion, rendering it “unlikely that a new vertically integrated [] company would enter the market to take [the defendant’s] place as a competitor and supplier for independent dealers”).
- b. Google’s Control of Key Distribution Channels
The D.C. Circuit has described a dominant firm’s “control of interconnection with its local distribution facilities” as perhaps the “most critical[]” barrier to entry, which should be considered by looking at the “realities of control[.]” AT&T, 740 F.2d at 1002. Plaintiffs point to two sources of Google’s control: the challenged contracts and its ownership of Chrome.
Without descending into the contested issues of exclusivity and anticompetitive effects at this juncture, see infra Section IV.C & Part V, it suffices to say that Google controls the most efficient and effective channels of distribution for GSEs. It is the exclusive preloaded GSE on all Apple and Android mobile devices, all Apple desktop devices, and most third-party browsers (Edge and DDG are the exceptions). FOF ¶ 59. Rivals cannot presently access these channels of
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