distribution without convincing Google’s partners to break existing agreements, all of which are binding for a term of years. FOF ¶¶ 291, 349, 364; see infra Section V.A.1.b; Syufy Enters., 903 F.2d at 667 (a “network of exclusive contracts or distribution arrangements designed to lock out potential competitors” is a barrier to entry). Even if a new entrant were positioned from a quality standpoint to bid for the default when an agreement expires, such a firm could compete only if it were prepared to pay partners upwards of billions of dollars in revenue share and make them whole for any revenue shortfalls resulting from the change. Infra Section IV.A. No current search engine in the market can compete on those terms. It is even harder to envision a new entrant doing so.
It is also a “realit[y] of control” that Google is the sole default on Chrome. AT&T, 740 F.2d at 1002. Queries on user-downloaded Chrome make up 20% of searches conducted in the United States. FOF ¶ 63. Though the Chrome default is not alleged to be exclusionary conduct, it is a market reality that significantly narrows the available channels of distribution and thus disincentivizes the emergence of new competition. Google’s near-complete control of the most efficient search distribution channels is a major barrier to entry.
- c. Brand Recognition
“[T]he need to overcome brand preference established by the defendant’s having been first in the market or having made extensive ‘image’ advertising expenditures[] also constitute[s] barriers to entry.” AT&T, 740 F.2d at 1002; U.S. Anchor Mfg., 7 F.3d at 998 (“[I]t is settled that customer brand loyalty may constitute an impediment to competition and thus an aid in the exercise of market power.”); cf. Am. Council of Certified Podiatric Physicians & Surgeons v. Am. Bd. of Podiatric Surgery, Inc., 185 F.3d 606, 623 (6th Cir. 1999) (“[E]stablishing credibility naturally seems to be a significant barrier to entry, particularly for an enterprise that depends heavily upon reputation, such as certification of medical specialists.”). As U.S. Plaintiffs’ expert in behavioral
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