DOJ’s Radical Search Case Remedies Could Crush Small Businesses

Overview: 

In October 2020, as thousands of small businesses relied on digital tools to navigate the COVID-19 pandemic, the Department of Justice (DOJ) and state Attorneys General (AGs) filed a lawsuit against Google, alleging the company maintained an illegal monopoly in web searches. The suit centered around Google’s payments to companies like Apple and Samsung to make Google the default search engine on mobile devices. This summer, U.S. District Court Judge Amit Mehta ruled that Google acted illegally to maintain a monopoly in online search. 

Any antitrust case has two critical components: the market being examined and the harm done to consumers. If a court finds liability, it will order remedies or changes deemed necessary to rectify the situation. The Google case is now entering the remedies phase to determine what changes Google must make. 

Potential Remedies:

On Oct. 8, 2024, the DOJ submitted to the court a sweeping framework for their proposed remedies, which range from modifying Google’s business practices and contractual agreements to forced data sharing and structural changes (i.e., breaking up different parts of Google’s business, such as spinning off Chrome or Android). 

The DOJ’s final remedies filing submission is due Nov. 20. If they request all of the remedies in the framework and the judge implements them, there would be severe unintended consequences for small businesses in particular. 

Similarly, former Federal Trade Commission General Counsel Alden Abbott in Forbes argued that breaking up Google “would destroy the benefits of large integrative efficiencies achieved through the digital ecosystem created by Google’s platform. Stripped of key parts of its system, Google would be crippled, rendered far less efficient and able to innovate.” In August, The Washington Post’s editorial board argued, “Devising a remedy that benefits consumers will be difficult.” 

These concerns are also urgent for the millions of small businesses that use Google’s free and low-cost digital tools, like online advertising. A 2021 survey found that digitally advanced businesses retained customers at triple the rate of their less digitally advanced counterparts and acquired new customers at 20 times the rate during the pandemic. And a recent study found that 82 percent of small businesses attributed 2023 revenue growth to online ads. 

Specific Small Business Concerns:

While the DOJ has until Nov. 20 to submit its final remedy recommendations, the framework has several issues that would impact small businesses. 

Structural Remedies: As Abbott argued, breaking up Google would “destroy the benefits of large integrative efficiencies achieved through the digital ecosystem created by Google’s platform.” This is especially true for the integrated tools and services small businesses use. Here are a few examples of how breaking up Google or degrading its capabilities could impact small businesses — and questions that could arise if its integrated services are broken up. 

1. Google Business Profile: A critical marketing tool for millions of small businesses that integrates Search with Google Reviews, Maps, and other Google products to display important information about a business at the top of a search results page.
   1. What happens to an integrated service like Google Business Profile if Google is broken up? How will small businesses be impacted if the products that make up Google are split apart? 
   2. Will changes to how Search operates impact Google Business Profile’s visibility? 

2. Google Analytics: A free tool that helps small businesses understand how consumers find them online, what keywords they use, and whether they came to the website through an email, search, or other website link.
   1. If Google is broken up, how will Analytics integrate with Search, Search Ads, and Display Ads? 
   2. Will structural changes impact small businesses’ ability to use Analytics for search engine and advertising optimization?

Forced Data Sharing and Advertising Market Changes: The DOJ framework includes forcing Google to make “the indexes, data, feeds, and models used for Google search, including those used in AI-assisted search features,” available to competitors and for syndication of Google’s ad feeds independent of search results. 

1. Degrading Small Business Advertising: Before digital tools like Google’s, small businesses had to buy ads through ad-buying agencies, and publications had minimum spending requirements. Google has democratized ad buying and made it seamless for small businesses to reach customers worldwide effectively.
   1. If Google has to share how its ad feed works, what is its incentive to continue innovating? Also, how would a syndicated ad feed work? Would a small business’ ads on Google appear on other competitors’ sites? How would small businesses know which sites they are running on and get analytics data about ad performance? 
2. Decreased Innovation in Search: Google continually innovates search results and provides small businesses with data and metrics reporting. It has set a high standard for how well search engines work and how valuable online advertising can be.
   1. If Google had to share these innovations with its competitors, it would lose its incentive to continue to innovate in these areas. 
   2. Instead of Google setting the bar in these areas and forcing competitors to keep up and present better metrics and analytics, this will create a race to the bottom. 

Artificial Intelligence (AI): Google competes fiercely with Microsoft, Open AI, Anthropic, Meta, Perplexity, Amazon, IBM, and others in the generative AI space. 

1. Sharing AI Models:
   1. Forcing Google to share its AI models and data with competitors will undermine Google’s incentive to compete with these companies and continue innovating in the space.  
2. Limiting Performance Max (PMax): The framework suggests that “remedies may address Google’s use of scale, including new advertising technologies such as artificial intelligence” (e.g., PMax).
   1. PMax helps small businesses achieve better returns on their ad investment across Google’s ad offerings. 
   2. Changing how PMax operates will make it harder for small businesses, which often lack in-house marketing professionals, let alone outside firms, to find the best ad strategies. 
   3. This will hurt small businesses’ ability to compete with larger firms with expert resources. 

Conclusion: 

Before the DOJ submits its final remedy recommendations on Nov. 20, it must consider how Google’s size, scale, and interconnectedness provide value and help millions of small businesses find customers and grow. As The Washington Post editorial board said, the DOJ and judge must “ensure that their interventions wouldn’t be worse for everyday people,” including small businesses and their employees. 

Radical remedies that drastically change how Google operates, dismantle the company, or degrade its capabilities will hurt small businesses the most — and these businesses can’t afford to be collateral damage in the DOJ’s crusade against Google.