Dr. Kimberlee Josephson — an associate professor of business at Lebanon Valley College in Annville, Pennsylvania, and adjunct research fellow with the Consumer Choice Center — believes business owners should be concerned about the Department of Justice’s antitrust case against Google.
The trial, which began under the Trump administration, might be one of the biggest antitrust cases in history. It’s no secret that Google is the dominant search engine, according to prosecutors. It is the most-visited website worldwide and has upwards of 90% of search engine market share.
Josephson reports that any entrepreneur knows that economic moats, like Google, matter. A moat is a concept that gained momentum after investor Warren Buffett noted in a 1999 interview that companies with a safeguard competitive advantage are the ones worth investing in.
In other words, companies should protect profits, sustain market share, and keep potential rivals at a distance, which Google search has mastered, according to Josephson.
But, Google is not without its vulnerabilities. Josephson reports that economic moats are hard to hold on to, and for Google, developments in AI and AI assistants may render search engine sites soon obsolete.
Google has also experiences many failures at the mercy of consumers: Google Wave, Google Hangouts, Google Buzz and Google+ are just a few examples of Google offerings that were rejected by the public.
Instead of letting Google’s fate playout in the marketplace, Josephson said for some unknown reason, the Federal Trade Commission feels the time is now to bring Google to court, and the fight will be a cost carried by taxpayers.
Josephson said Google is not without fault when it comes to consumer issues or data concerns. But the main criticism in the DOJ’s case is how Google established itself as the default search engine for Apple and Android products early on. Josephson argues that doing this was simply a shrewd business strategy that anyone with the opportunity would have done.
She offers this example to illustrate the DOJ claims:
“Let’s say different hotel chains were approached by the Lindt Chocolate company and received compensation for featuring Lindt’s Lindor truffles in each hotel room. Patrons of the hotel receive a free product which they can enjoy or discard as they see fit; the hotel receives revenue for improving the in-room customer experience; and Lindt, despite already being known as the best brand choice for chocolate across the globe, sees its brand equity and economic moat further secured.
“In this fictitious scenario, the situation is unfortunate for other chocolatiers who are unable to outbid Lindt’s hotel contracts, but perhaps there are other opportunities outside of the hotel sector that they could capitalize on instead. Hershey’s chocolate, for example, will dominate when it comes to campsites rather than hotel rooms given that nothing beats a Hershey bar on a s’more. And Hershey’s partnering with marshmallow makers and graham cracker companies helps secure its status as king of campfire treats,” Josephson wrote.
This is what Google is being criticised for, despite the situation benefitting Google, Apple and Android alike. Google – the best search engine worldwide – paid to have its site featured as the default option for Apple and Andriod consumers.
Josephson said that if Google were all of a sudden subpar, or if search engines were replaced by AI or new smart technology, the DOJ’s case would be a complete waste of time, effort and expense.
Search may not always need to be done via a search engine site, and new smart technology may no longer feature defaults for Google, or any of the other existing search engines for that matter – making the DOJ’s case a complete waste of time, effort, and expense, and an example of anti-progress instead of antitrust.
Josephson's academic background is in international studies and strategic management, and she teaches courses covering topics on organizational behavior and international marketing.
Her professional career spanned from working in sales in Manhattan, as a producer for a web marketing firm, freelancing for on-air promotions at QVC, and as a research assistant for an international NGO. Her research and op-eds have appeared in various outlets and at AIER and on FEE.
