On Wednesday, Google (GOOGL) parent company Alphabet (GOOGL)’s CEO Sundar Pichai joined Apple’s Tim Cook, Amazon’s Jeff Bezos and Facebook’s Mark Zuckerberg in a historic group hearing before the House Judiciary Committee’s antitrust panel to answer questions about their companies’ monopolistic power in various digital markets.
For Google, whose brand has become a synonym to online search, an obvious target is its dominance in the search engine business. As of June 2020, Google owns more than 90 percent of the global online search market, making it a monopoly by definition. And yet, Pichai said consumers have plenty of options other than using a search engine to find information.
“People have more ways to search for information than ever before—and increasingly this is happening outside the context of only a search engine. Often the answer is just a click or an app away,” Pichai said in his opening statement on Wednesday, citing examples including Amazon Alexa, Twitter and Facebook-owned WhatsApp.
“When searching for products online, you may be visiting Amazon, eBay, Walmart, or any one of a number of e-commerce providers, where most online shopping queries happen,” he went on to explain. “Similarly, in areas like travel and real estate, Google faces strong competition for search queries from many businesses that are experts in these areas.”
Yet, with Google’s vast power in deciding what’s discoverable on the internet and what’s not, the relevancy of its search results has drawn scrutiny. During the Q&A session of Wednesday’s hearing, Rep. David Cicilline alleged that Google’s search algorithm consistently prioritizes its own sites, citing reports that 63 percent of web searches that start on Google end somewhere on Google’s own websites. He also claimed that Google had forced competitors, including Yelp, to share content with it by threatening to delist their websites in Google Search if they don’t, “which is very anti-competitive,” Cicilline said.
Pichai denied both allegations and reiterated Google’s mission to provide the most relevant search results to users.
But one thing Pichai couldn’t deny is the fact that Google’s power in online search has brought enormous online advertising profits to the company. As of 2019, Google owned about 32 percent of the U.S. digital advertising market, leading a wide margin over Facebook’s 23 percent and Amazon’s 8 percent, according to eMarketer.
Borrowing Apple CEO Tim Cook’s logic on the App Store, Pichai argued that Google has actually helped lower the cost of digital advertising and that its market dominance the result of ample competition, rather than the lack of it.
“A competitive digital ad marketplace gives publishers and advertisers, and therefore consumers, an enormous amount of choice,” Pichai explained. “For example, competition in ads—from Twitter, Instagram, Comcast and others—has helped lower online advertising costs by 40 percent over the last 10 years, with these saving passed down to consumers through lower prices.”