Google, Cell Carrier, and Device Manufacturer Contracts: How Fast Will They Be? Comment on Kovacic, a Former Attorney General at the US Federal Trade Commission and a Professor at Cornell University

“At a minimum, the Justice Department will ask for an injunction that forbids Google from engaging in the conduct that the court deemed to be improper,” says William Kovacic, who previously served as an antitrust regulator on the US Federal Trade Commission.

Mehta will give a second opinion and order after the two sides fight over how bad the penalty should be. The exact time frame is not clear. A former chair of the Federal Trade Commission and a professor at George Washington University thinks that a judge could hold a weeklong hearing on remedies by the year’s end.

A fight that could take up to a year will be the prediction by Rebecca Haw Allensworth, an antitrust professor at Commodore University Law School. Allensworth says that the remedy is going to take a long time because of gnashing of teeth.

We could see a Supreme Court decision by the end of the century, according to Kovacic. George Hay, professor at Cornell University, gave the Associated Press a timetable of up to five years.

In addition to Apple, Google also has contracts with cell carriers and device manufacturers to be the default search engine on Android devices (these contracts operate a little differently since they hinge on Google’s control of the Google Play Store).

Apple Can’t Give It All: The Game Eddy Cue Has No Right To Give? Apple Can Easily Provide the Same Services, but Google Can Feed It

At another point, he said he didn’t think Microsoft could give us a price. They were prepared to give us Bing for free. They could give us the whole company.”

It is true that Cue doesn’t mean Bing is bad. On desktop, Bing is comparable to the quality of search that you can get at Google, but on mobile it falls behind.

It’s not just Eddy Cue refusing to give Bing the time of day — all of these companies recognize Google as the only game in town. None of these “Fortune 500 companies” have a real choice in the matter.

According to the opinion, “[i]n return for exclusive and non-exclusive default placements (i.e., user-downloaded Chrome and Safari default bookmarks), Google pays Apple a [redacted] percentage of its net ad revenue, which amounted to $20 billion in 2022.”

Apple and AdWords entered their contract in the same year. Around that time, Apple came out with Suggestions. When you type something out into Spotlight, Apple suggests a website to you that is not the same as the one used by Google Search.

This was significant. A query loss of 10–15% of traffic to the browser and a revenue loss of 4–10% of revenue from the browser based on Apple Suggestions were estimated by one analysis. Apple could not expand farther than what they were doing if they wanted to keep traffic away from them, so they had a specification in the new contract.

The terms of the 2016 contract seem to have worked out for both companies. Google and Apple extended the agreement in 2021: the contract will expire in 2026. Apple “can unilaterally extend the agreement by two years,” and if both parties agree, they can extend the contract even further, all the way out to 2031. Part of the contract obligates both Google and Apple to defend this agreement “in response to regulatory actions” (e.g., DOJ antitrust lawsuits, like this one).

It would cost Apple $6 billion per year to run a GSE on top of what it spends on search capabilities. Meanwhile, in “late 2020, Google estimated how much it would cost Apple to create and maintain a GSE that could compete with Google.” To reproduce the technical infrastructure dedicated to search, Apple would have to spend $20 billion.

General search engines (GSE) and specialized vertical providers (SVPs) are distinct from each other. The heavy use of technical abbreviations may make you think that it is complicated, but it is simply not. Everyone understands a search engine, like Bing, DuckDuckGo, and so on.

There are thousands of little search boxes on the internet if you really care about it. Sometimes you can use them like a search engine to find flights to a specific location or a pair of black flared leggings. Booking.com and Amazon.com aren’t the same as a general search engine that index the World Wide Web. Do you think you need to justify this reaction? No. You probably don’t need to read anything about how a court of law has done it for you.

Nevertheless, says Judge Amit Mehta, social media platforms are distinct — they’re walled gardens of content. And more importantly, “there is little evidence that they actually compete with GSEs for search queries.” He said the TikTok study isn’t interested in whether the platform’s search quality results are competitive with Google’s or if they’re relevant to the market. And TikTok is not the only social platform. One study, he says, suggests that Facebook use corresponds with an uptick in Google Search use.

The internet habits of Zoomers are not relevant when it comes to an antitrust analysis. He wrote about how heImagine if the quality of search was degraded by neglect or purposely. (Yes, imagine. Who. Could. Imagine. That.) “Would SVPs or social media platforms be able to shift resources to put out a product that resembles a GSE and thereby capture a significant number of dissatisfied Google users? The answer is no. It would take “extraordinary cost and expense” for even a juggernaut like Amazon or Meta to fill that hole in the market.

It is not relevant to antitrust law to consider the future of search to be the future. A judge writes that an artificial intelligence may one day change search, but not right away. Elsewhere, he writes that “[c]urrently, AI cannot replace the fundamental building blocks of search, including web crawling, indexing, and ranking.”

He also found that — factually speaking, even — “generative AI has not (or, at least, not yet) eliminated or materially reduced the need for user data to deliver quality search results.” The opinion’s findings of fact quote Neeva’s cofounder Sridhar Ramaswamy, saying that “the middle problem of figuring out what are the most relevant pages for a given query in a given context still benefits enormously from query click information. It’s not the case that the models eliminate the need.

In other words, when you search for “golf-shorts,” it’s not just that you get served (hopefully) with the relevant results for golf-shorts — Google more or less automatically receives important information about what you think the relevant results are, based on what pages you end up clicking on. The feedback loop isn’t happening with the artificial intelligence.

The opinion also quotes Google’s own VP of search, Pandu Nayak, as saying that it’s vitally important for Google to continue to “have an infrastructure that [it] understand[s]” — that is, the traditional ranking system. According to Nayak, “there is no sense in which we have turned over our ranking to these systems. We still have control over what is happening, we have an understanding of it.

Apparently in 2020, Google conducted a study looking to see what would happen to its bottom line if it “were to significantly reduce the quality of its search product.” If the company made search less attractive, the revenues from it would be fine.

Big changes to the experience could be ordered if users had to choose their search provider. He could force it to sell parts of its business. The process of deciding the penalties will start in September, but with the search giant appealing the verdict, it could take years for them to comply.

Legal and economics experts think that Mehta might look at a variety of remedies. Here’s a look at five options.

The courts in the US try to resolve antitrust violations by ordering an end to the illegal behavior, setting rules to prevent it from occurring again, and taking any additional measures needed to make sure that everyone is treated fairly.

Mehta: a new browser extension of Google’s Android search and Chrome’s latest extension of the Google search menu for Android devices

Mehta could follow the lead of the European Union, which for years has required Google to offer a menu of search options on Android devices, and recently expanded the rule to the Chrome browser.