Is this the beginning of the end for Google's search dominance?

The walls seem to be closing in on Google. The tech giant recently backpedaled on its promise to eliminate third-party cookies in Chrome, sparking privacy concerns. Then came the swift backlash against its AI-powered Olympics ad, with critics slamming it for painting a dystopian vision of the future. But the real blow came was when a US judge dropped a bombshell: Google is a monopolist, illegally maintaining its stranglehold on internet search and, by extension, the lucrative world of search advertising.

 

“Google is a monopolist, and it has acted as one to maintain its monopoly,” US District judge Amit Mehta noted in his 277-page 'United States v. Google' opinion.

 

The landmark ruling could drastically change the way that Google's parent firm, Alphabet, does business.

 

While it's still unclear exactly what penalties Google will incur as a result of the ruling, the government has so far requested "structural relief", and that might theoretically imply the break up of the company that was launched in 1998 and has since come to account for over 90% of the global search engine market, with more than 70% of worldwide online search requests handled by Google.

 

Google has paid billions to guarantee that its search engine is the default one on cellphones and web browsers, according to US District Judge Amit Mehta's ruling.

 

In one such example, Google pays fellow tech giant Apple billions of dollars a year to be the default search engine in Safari. In addition to Apple, Google also has agreements with cell carriers and device makers to be the default search engine for Android smartphones.

 

Alphabet, Google's parent company, said it plans to appeal against the ruling.

 

“This decision recognises that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available," the statement from the company said.

 

The decision was made on Monday following a 10-week trial in Washington, DC, when the prosecution charged Google with paying companies like Apple, Samsung, Mozilla, and others billions of dollars a year to have their search engine pre-installed as the standard on all platforms.

 

This landmark case, coupled with an upcoming antitrust trial (starting September 9) focused on Google's grip on the digital ad industry, raises critical questions: will the company be forced to relinquish its iron grip on search, opening the door for competitors who have long been relegated to the shadows?

 

Campaign Asia-Pacific turned to brand and advertising experts to weigh in on the tech titan's uncertain future. 

 

Xiaofeng Wang

Principal analyst, Forrester

 

 

The end of Google’s monopoly won't happen right away for two reasons. First, Google will appeal, causing delays in making significant changes. Second, even if the ruling stands, it will take time for consumers to change their search habits. It’s uncertain whether they will continue to choose Google as their go-to search engine or stick with the default option, even if Google is no longer the default on their devices or platforms.


In terms of how Google's search advertising business will be impacted, advertisers usually follow consumers. Ultimately, it depends on whether Google can remain the go-to search engine for most consumers without the protection of default search engine agreements or how quickly and effectively competitors can establish themselves in the market without the barrier of Google’s default search engine agreements.


Google’s dominance in search is a fact. The debate lies in whether it is because of default search engine agreements (consumers don’t have the freedom to choose) or a ‘better product,’ as Google argues (consumers have the freedom to choose). If it’s the latter, then Google will remain a strong brand and weather the challenge. Consumers will ultimately decide which search engine they prefer based on their experiences and satisfaction. Their choices will shape the market regardless of legal rulings or business strategies.

 

Patrick Eastwood

Partner, Prophet

It’s hard to imagine a future when Google isn’t dominant in search! If the judge imposes restrictions on Google or even a break-up, then their dominance and huge ad revenues will likely be hit with the likes of Microsoft (Bing) benefiting. However, given its ubiquity and product superiority, I’d still expect Google to remain dominant in the medium term. Plus, Google is appealing, so let’s see what the judge meets.

If Google's appeal fails and they lose other cases underway on digital advertising, their ad revenues and margins will take a hit, but I expect it won’t be immediate. Let’s not forget their monopoly in search is also under threat from social platforms, other ad networks, AI, and native search on alternative mobile operating systems to Android.

If the appeal goes against them, expect a flurry of “Don’t be evil” memes! The Google brand may be synonymous with search, but let’s not forget its ubiquitous role in our lives elsewhere (Workspace, Maps, Translation, Cloud, Devices, Android platform, etc.). I’d expect Google to double down on efforts there and further diversify its revenue streams while accelerating in areas where cutting-edge technology and customer centricity are crucial.

 

Brian Benway

Senior research analyst, gaming and technology, Mintel 

With this ruling, plus the impact of AI on search engines, I don't think Google can expect to keep the status quo. Will it mean that Google has to improve search results to keep users, lower their prices to keep advertisers, both? That will ultimately get shaken out by the market, but Google can't just rest on their laurels, it has to innovate search again. 

 

I don't think Google took a big brand hit from this ruling with consumers yet. Worst case scenario from the ruling, breaking up Google into smaller companies is a possibility, but I don't think it's likely. Similar action wasn't taken against Microsoft in 2001. Alternatively, if it wins on appeal, Google could keep operating mostly as normal with little fuss that would be soon forgotten in the news cycle. In which case, I don't think device manufacturers would still keep accepting payment for preloading devices, that ship has probably sailed. If Google loses the appeal, gets hit with harder penalties and competitors start circling, there is a chance that consumer sentiment turns negative towards it much faster. 

 

Google needs to become an innovative search product again, more than just adding results from Gemini or Bard AI, or someone else will. It will be very interesting to see what penalties are given, and what impact that will have for the other big tech companies, the mobile and growing AI markets.

 

Ed Raine

Strategy director at Jaywing

With more of the younger generation searching on TikTok and AI rolling out across technologies, the search landscape is already changing. Google will be more concerned about that than the penalties that might come as a result of this ruling.

I don’t think many people will be surprised to hear that Google is a monopoly—most people outside the industry would probably struggle even to name an alternative search engine.

Despite the negative headlines surrounding antitrust, privacy, and censorship, Google's brand remains robust and resilient. This latest news, while not beneficial, is unlikely to significantly impact the brand's standing.

Google doesn’t have the same problems as Twitter (or X) when it comes to negative publicity because a) their bad news doesn’t reflect on businesses that advertise on the platform and b) Google Ads are more closely tied to revenue, which makes it a much harder channel to switch off.

I wouldn’t be surprised to see some extensive, fun, feel-good brand campaigns to distract us and highlight the good things they’ve done. Ultimately, consumers will keep using Google because it’s better than the alternative, and they’re accustomed to it.

Given this ruling, the cost of running ads on search is unlikely to change. Pricing is currently determined by a competitive auction, so it’s very much dictated by the market rather than handed down by Google.

However, if Google’s product suite is somehow broken up or if Google’s dominance does take a big hit, then marketers will need to split their attention across more platforms. While that might not increase the price of ads, it will cost more in terms of managing it all.

 

Martin Roll 

Business and brand strategist, author, Asian Brand Strategy

The recent antitrust ruling against Google marks a significant legal development, but I believe that it's unlikely to immediately end Google's dominance in the search business. Google is likely to appeal the decision, which means the ruling could be tied up in courts for years. During this time, Google's business operations will largely remain unchanged.

 

The ruling might encourage competitors to innovate and invest more in search technologies, potentially leading to increased competition. However, building a rival search engine with comparable user experience and data quality is a formidable task. 

 

While the ruling is a step towards increased regulatory scrutiny and potential market changes, Google's entrenched position and resources mean that any significant shift in its dominance will likely be gradual and contingent on multiple factors. The final factor is the rise of AI which may also impact the competitive landscape in the short-to medium term.

 

To stay healthy as a brand, Google should focus on transparency and compliance with regulatory requirements. Proactively addressing antitrust concerns and demonstrating a commitment to fair competition can help mitigate legal risks and improve public perception. 

 

Additionally, diversifying its product offerings and investing in emerging technologies can create new revenue streams and reduce dependency on its core search business.

This post is filed under... Brand Health Check: We assess and (if necessary) solicit suggested remedies