United States v. Google/Conclusions of Law/Section 4
IV. EXCLUSIVE DEALING
Before moving forward, it is worthwhile to pause and summarize where we are. The court has found that Plaintiffs have proven that Google has monopoly power in two relevant product markets: general search services and general search text advertising. On the other hand, although the court recognized a separate market for search ads, it found that Google did not have monopoly power in that market. It also rejected a separate general search ads market. As to the latter two markets, the court’s Section 2 inquiry proceeds no further.
Because “having a monopoly does not by itself violate § 2,” Microsoft, 253 F.3d at 58, the next step in the analysis is to determine whether Google has engaged in exclusionary conduct with respect to general search services and general search text advertising. Plaintiffs must prove a second element, which is “the willful acquisition or maintenance of [monopoly] power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.” Id. at 50 (internal quotation marks omitted). The bulk of Plaintiffs’ case focuses on the search distribution contracts—the browser agreements (primarily with Apple and Mozilla) and the Android agreements (the MADAs and RSAs)—which Google allegedly uses to maintain its monopoly in the relevant markets.
According to Plaintiffs, the challenged contracts are unlawful exclusive agreements. They effectively block Google’s rivals from the most effective channels of search distribution, namely, the out-of-the-box default search settings. Google is the exclusive default search engine on the Safari and Firefox browsers. Likewise, on all Android devices, the Google Search Widget appears on the home screen and, on all except Samsung devices, Chrome is preloaded as the exclusive browser. Plaintiffs say that these distribution contracts effectively “lock up” half of the market for search and, by extension, nearly half of the market for general search text ads. These exclusive deals protect Google’s dominant position and shield it from meaningful competition. Plaintiffs also specify certain contractual provisions that they claim thwart competition. The ISA, for example, contains provisions arguably restricting Apple’s ability to divert queries away from Google and serve search ads, and the RSAs prohibit partners from preloading “alternative search services” on Android devices.
Before turning to the merits of Plaintiffs’ arguments, the court considers two threshold matters. First, Google contends that it is not subject to Section 2 liability because its positions as the default GSE are the product of “competition for the contract” and thus are not exclusionary. Second, Plaintiffs maintain that the court should eschew Microsoft’s exclusive dealing framework in favor of a broader “general Section 2 standard.” UPCL at 14. The court rejects both arguments.