## Facts

- The United States government and 15 state governments sued Google LLC under § 2 of the Sherman Act, alleging unlawful maintenance of a monopoly in the market for general search services.
- The governments alleged that, for a search engine, the most effective way to attract and keep users is to be the default search engine on computers and mobile devices.
- The governments alleged that default status operates as de facto exclusivity because users rarely change default settings.
- The governments alleged that Google paid billions of dollars to device manufacturers (including Apple, LG, Motorola, and Samsung), wireless carriers (including AT&T, T-Mobile, and Verizon), and browser developers (including Mozilla, Opera, and UCWeb) to secure Google as the default search engine for large numbers of users.
- The governments alleged that some agreements also restricted those counterparties from dealing with Google’s search competitors.
- The governments alleged that, as a result of exclusionary contracting and Google’s owned-and-operated properties, Google owned or controlled nearly 90% of search-engine searches, including about 95% of searches on mobile devices.
- The governments alleged that Google monetized search through advertising tied to users’ search activity and other user information.
- The governments alleged that Google used roughly $40 billion per year in advertising revenue to fund the payments that preserved its default positions.
- The governments alleged that these default and related agreements raised barriers to entry and expansion for rival search engines.
- The governments alleged the monopoly was self-reinforcing because more searches generate more data to train and improve search algorithms, which in turn draws more users and queries, making effective entry or expansion difficult even for well-funded rivals.

## Issues

1. Whether the governments plausibly alleged a relevant antitrust product market for “general search services” in which Google could possess monopoly power.
2. Whether the governments plausibly alleged that Google held monopoly power in general search services based on share, entry barriers, and durable control over distribution.
3. Whether the alleged default-search and related contracting practices could constitute exclusionary conduct (including de facto exclusive dealing) capable of maintaining monopoly power under Sherman Act § 2.
4. Whether the complaint plausibly alleged anticompetitive effects and harm to the competitive process, not merely harm to individual competitors.

## Decision

- The court permitted the governments’ Sherman Act § 2 monopoly-maintenance case to go forward past the pleading stage.
- The court concluded that the complaint plausibly alleged a general search services market, Google’s monopoly power in that market, and exclusionary conduct through default-search and related agreements that could maintain that power.

## Legal Principles

- A § 2 monopoly-maintenance claim requires (1) monopoly power in a properly defined relevant market and (2) exclusionary conduct that maintains that power as distinct from competition on the merits.
- At the pleading stage, a complaint must allege enough facts to make the asserted market, monopoly power, and exclusionary maintenance theory plausible.
- A relevant product market turns on reasonable interchangeability and substitutability; products that do not constrain a firm’s pricing or quality decisions may fall outside the market.
- Exclusive dealing (including arrangements that function as exclusivity in practice) can be unlawful under § 2 when it significantly forecloses needed distribution channels and helps preserve monopoly power.
- Conduct that secures default positions can be competitively significant where users rarely switch defaults and where scale and data feedback effects make distribution access decisive to rivalry.

## Conclusion

In *United States v. Google LLC*, the federal and state governments alleged that Google maintained monopoly power in general search services by paying for default-search placement and imposing restrictions that limited rivals’ access to key distribution channels; the court held the allegations sufficient for the § 2 claims to proceed beyond the pleadings.


United States v. Google LLC, No. 1:20-cv-03010 (2021)