United States v. Google/Conclusions of Law/Section 6D
- D. The Exclusive Agreements Have Capped Rivals’ Advertising Revenue.
The exclusive distribution agreements allow Google to maintain its text ads monopoly in much the same way as in the general search services market. That is, Google’s rivals must distribute their GSEs through less efficient, non-default access points, which results in fewer users and fewer ad dollars spent to target those users. See supra Section V.A.2. With less ad revenue, Google’s rivals are limited in their ability to reinvest in quality improvements (both as to search and general search text ads) to attract more users and more ad dollars. Supra Sections V.A.2 & V.A.3. That cycle puts rivals in no position to compete with Google for the increased ad revenue that accompanies greater query volume. See supra Section IV.A.
Advertising witnesses consistently testified to this reality. They uniformly cap their text ads spending on Bing at no more than 10% to approximate its relative market share. FOF ¶ 233. So, even if Bing’s ads were to offer better value than Google’s, Bing could not effectively constrain Google’s ad pricing. As one witness put it, once the spending maxes out on Bing, there is simply “[nowhere] else to go.” Tr. at 4875:19–4876:4 (Lim). By locking in a huge comparative query volume advantage through its exclusive agreements, Google ensures that advertisers will continue to spend 90% of their text ad dollars with Google, regardless of increases in price or decreases in quality. That is an anticompetitive effect in the marketplace.
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Google has not argued that the contracts generate procompetitive benefits beyond those already addressed and rejected, supra Section V.B. The court thus concludes that Plaintiffs have proven that Google’s exclusive distribution agreements substantially contribute to maintaining its monopoly in the general search text advertising market, violating Section 2 of the Sherman Act.