can be produced without increasing the fixed costs[,] . . . the cost per unit produced will be zero independently of the production volume.”); cf. Pac. Eng’g & Prod. Co. of Nev. v. Kerr-McGee Corp., 551 F.2d 790, 796 (10th Cir. 1977) (recognizing that in the face of “decreasing marginal costs,” a firm “would be tempted to lower price and expand output to reach a lower point on its marginal cost curve”). So, the fact that search output has grown is not inconsistent with monopoly power in search.
***
For these reasons, the court concludes that Google has monopoly power in the general search services market.
III. MONOPOLY POWER: ADVERTISING MARKETS
The court now moves from search to advertising. Plaintiffs collectively assert that Google has monopoly power in three overlapping advertising markets. These markets and their relationships are illustrated below. U.S. Plaintiffs allege the broadest proposed market, search advertising, which includes all advertisements served in response to a query, regardless of the digital platform. Within the search ads market, Plaintiff States define a general search advertising market that includes only ads served on GSEs. Finally, both sets of Plaintiffs propose a general search text advertising market, limited to text ads appearing on a GSE’s SERP. Google counters that Plaintiffs’ proposed markets do not comport with business realities. There is, according to Google, one omnibus market for digital advertising, and the markets as alleged exclude various digital ad types that are effective substitutes for Google’s text and shopping ads.
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