Takeaways from the Google Monopoly Verdict — and What Comes Next | Behind the Numbers - Behind the Numbers: an EMARKETER Podcast

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Transcript49 lines

[00:00]
A
In the rapidly evolving world of retail media, few platforms are as uniquely positioned as DG Media Network. With over 20,000 stores, Dollar General serves as a lifeline for over 90 million shoppers across the US at a time when all shoppers are looking to save money. DG Media Network Media built better hey gang. It's Monday, September 15th. Jeremy, Yuri and listeners, welcome. Behind the Numbers any marketer video podcast made possible by DG Media Network. I'm Marcus and joining me for today's conversation we have Senior Director of Briefings. Living in New York, it's Jeremy Goldman.
[00:44]
B
Happy Hispanic Heritage Month, Marcus.
[00:47]
A
Same to you, sir. And also Principal Analyst who heads up our ad media and tech teams based in New Jersey, it's Yuri Wormsa.
[00:55]
C
Hey, Marcus and Jeremy.
[00:57]
A
Hello, fella. Thanks for hanging out today. Gents. Today's fact. Where does all the coffee come from? So who should we be thanking for this? Sweet nectar keeps us going during the day. Coffee drinkers, gents.
[01:19]
B
I have your share. I think you're more of a tea guy, right?
[01:22]
C
I am, I am.
[01:24]
A
Okay. Brazil is number one. Gives us close to 40% of the world's coffee. Thank you. Brazil in second place. Jens and Guesses, second largest producer of coffee in the world. It's not what you're thinking.
[01:42]
C
Yeah.
[01:43]
B
India, I don't know. Colombia, Kenya.
[01:48]
A
Colombia's third. They have 7%. Vietnam.
[01:52]
C
Oh, wow.
[01:53]
A
With close to a fifth. 17% of the world's coffee comes from Vietnam. So it goes Brazil with 40%, Vietnam with 17. So those two give us well over half. And then a distant third, Colombia with 7% according to the US Department of Agriculture.
[02:09]
C
I had no idea.
[02:10]
B
Vietnamese coffee is great, by the way. Like that. So good.
[02:13]
C
It is very, very good.
[02:17]
A
I don't know if I've tried it before, but I want to now. Govind Butada of Visual capitalist explaining that most of the world's coffee comes from the coffee belt horizontal geographical region that stretches along the equator between the Tropic of Capricorn and the Tropic of Cancer. From this region, the top 10 coffee producers control nearly 90% of the global annual global coffee supply. Thank God for coffee. I had to get to 10am the other day before I grabbed my first cup.
[02:45]
B
So Brazil is like the Google of.
[02:46]
A
Kashi trying to fight people. Yes, exactly. Exactly. Right. Good pivot. Today's real topic, the Google trial verdict. Well played, Jeremy. So Trishla Oswar and Kendra Barnett of Adweek remind us that last August might have been late. After a landmark court battle, U.S. federal Judge Amit Mehta found that Alphabet owned Google, had maintained an illegal monopoly in the online search space, pointing to the company paying certain folks like Apple $20 billion a year to be the default search engine on its devices. We had to wait a year, but the sentence is in. Lily Jamily and Rachel Klun of the BBC explained that Google will not have to sell its Chrome browser or Android os, but must share information with its competitors, at least for the next six years. The U.S. department of justice had demanded that Google sell Chrome, but this decision means it can keep it just no more exclusive deals and also it has to start sharing data with folks. Jeremy, what were some of your top takeaways from the verdict?
[03:56]
B
It was funny because actually Yuri was the first person that I reached out to right afterwards just to talk about it. Thank God for Slack. I thought it was almost like a best case scenario if you're Google, especially given some of the very strong wording that had come out before directed at Google. With this particular case, that was my number one takeaway is Google got away and was quite lucky in this regard. It remains to be seen how lucky everybody else will feel about just having access to select Google data over a certain number of years.
[04:37]
A
Yeah, it definitely feels like Google one. That appears to be the general consensus. Yuri. Shares of Alphabet spiked 8% in the extended trading. Meaning investors appear to be pretty relieved by this.
[04:49]
C
Yeah, I mean they, they lost the trial in the sense that they are called a monopolist. But yeah, they have to be happy with the, with this stage, the remedy stage. Yeah, basically the big punishment is the exclusive, non exclusive, they're no longer able to do the exclusive deals and the sharing data. In terms of the exclusivity, they had basically given up on that. That was not even, I think a major question whether to have to give that up and they had to give up some data, but it wasn't super, super important. That said, the data that they are going to have to share is going to I think make some difference for generative engines, sort of training generative engines. I don't think it's nearly enough data to absolutely handicap Google, but I think it will make some marginal differences for those engines. And given how close the battle for generative AI is right now, I think it is meaningful.
[05:53]
A
Oh, interesting. Okay. Because there were concerns that, okay, how much will these measures actually level the playing field? Jim Jansen, principal AI scientist at Qatar Computing Research Institute, former professor at Pennsylvania State University, says it's hard to know how much Microsoft, OpenAI and others will benefit one from Google. The fact that Google can still pay vast sums to be the most featured search and search engine, they just can't be exclusive deals like you were saying. Two, the data sharing part of this, they were saying it appears to be quite limited. It's only available to qualified competitors. There might be a fair few of those, but only qualified ones and will include just some of its search index and interaction data. Nothing ad related. But Bill Baer, who was an assistant attorney general for antitrust in the Obama administration, agrees, saying the real question is going to be are these data licensing requirements going to be sufficient to create the potential for a more competitive search market? It sounds like you're saying yes to a certain degree. Right?
[06:55]
C
I'm saying maybe. There are a couple things here that are still unclear. One is what exactly is the data they're going to have to share? I mean, it's search index data, snapshots of search index data and user interaction data. The details of that are going to have to be determined by a technical panel. Exactly what types of data will come out that will have some effect on how much impact it will have. And it will also make a difference in terms of training some of these generative engines and whether or not it makes a difference. I'm not saying it will, but I'm saying it's possible that it might.
[07:34]
A
Yeah, yeah.
[07:35]
B
Like the key, the wording that you were using was like, will it make it more competitive? It'll make it more competitive. Will it make it competitive? No. And I think that that's largely part of the problem is if you're trying to create a true remedy here, you do have Google that's very dominant. It was becoming slightly less dominant. Yes. And largely that's in part because there are so many different offerings to consumers in terms of how to search. We didn't even really talk about Chrome yet and the fate of Chrome. But I think that Google has so many advantages that to create a more competitive environment for other players but not going that far doesn't really change the landscape all that much.
[08:18]
C
Yeah, it depends on really how close. If this hadn't, if this agreement, if this remedies phase hadn't happened, say the trial, they were declared not a monopolist. Do these remedies make the battle closer? Do they give some advantages to competition? I think it does. And the real question is, is it enough to make a real difference in terms of who wins and who doesn't? And that's really an open question still.
[08:47]
A
Yeah. Jason Asian of Ink was saying the case was Making the case that antitrust remedies aren't necessarily about punishing bad behavior, they're about restoring competition. And the court decided it seemed a lighter touch was enough because it doesn't feel like they've been handed down a bigger penalty as you would have expected. But that's not really the point here. The point is to try to level the playing field. Are they doing that? We shall see. Also, Mr. Jansen of the Qatar Computing Research Institute was saying that this is an administration nightmare because there's all sorts of privacy issues. He was saying that it will be complicated for Google and the court to manage the data sharing because users agree to share their data with Google, not a third party when they do their searches. So they have to figure that piece out as well. Sneaky winner, Apple, right? It gets continue to get paid by Google to host its search engine. Just won't be an exclusive contract. And Wall street analysts estimating that if Apple wasn't allowed to make, wasn't allowed to receive these payments, its annual profit would have been cut by 15%. So this seems like a big win for them as well.
[09:53]
C
And it's really interesting because I think a key part of the remedies phase of the trial was testimony by Eddie Cue of Apple who said that traffic to Google from Safari went down in March for the first time ever. And I think that was an indication to judge Meta that Gen AI was actually making a difference and starting to have an impact. And Google's stock price dove at that point. But of course, he had some mixed motives there because Apple does benefit a lot by this ruling.
[10:30]
B
And Apple, we're talking about stock price before Apple went up as a result of being able to keep a lot of the benefit that they were getting from this deal.
[10:40]
A
Yeah, yeah. Economists also pointing out that this may even encourage the forging of closer ties between the two firms, with some speculating that Apple will partner with Google running the latter's Gemini AI products on the iPhone. So maybe these guys get closer together as a result. Assistant Attorney General Abigail Slater was saying hopefully, rather hopefully saying the judge's ruling restores competition to the search engine market, but further measures could be needed. So it seems like they're somewhat okay with the verdict or the sentencing, but maybe we'll pursue stronger measures down the road going to the Gen AI piece of this. In a statement after the ruling, Google said today's decision recognizes how much the industry has changed through the advent of AI, which is giving people so many more ways to find information, close quote. It seems the judge agreed, writing, quote, the emergence of Gen AI changed the course of this case. Close quote. Jeremy, what do you make of the argument that the rise of AI search and the competition that comes from that was the reason to enforce more light touch remedies?
[11:53]
B
I mean, I can see it both ways. I think that you can easily make an argument that the rise of AI search further fuels Google's dominance by obviously there's this ad tech component to what's going on with Google right now that's under scrutiny. And as publishers are starved from organic traffic, they're getting less traffic generally. We've discovered, we've actually charted quite a bit of that for our clients. And as a result, I think there's an argument to be made that maybe you should actually be harsher on Google because of this. At the same time, I can see the fact that you do see a little bit of the perplexities of the world and anthropics and obviously ChatGPT being pretty major and maybe saying, well, there is a little bit more of a competitive landscape that is encroaching on Google's territory. So therefore maybe we don't have to slice and dice their company because there are companies that have Google in the crosshairs already, you know. So I see both ways, but ultimately I think that the AI overviews have a chance to, over time, really cement Google's dominance and its strength in the marketplace.
[13:07]
A
Yeah, Yuri, this is interesting because this is what happens when you take five years to make a decision, right? Things change. And this lawsuit was technically filed back in 2020 during the first Trump administration.
[13:21]
C
It absolutely changed into five years, 2020. Google was an undisputed leader in search, still is the undisputed leader in search, but in terms of generative AI search, ChatGPT actually has more daily users and more interactions if you take away AI overviews, which are its own pseudo or partial generative search. But Gemini is catching up at the moment, though. ChatGPT is leading, and that's a fair question, whether it's a separate market from search. I agree with Jeremy, though, that over the long run, Google has distribution advantages, especially after this trial, has cache advantages, has infrastructure advantages. They probably make it the favorite to become the winner in the long range. But at the moment, I would say that OpenAI and ChatGPT are ahead in the race for generative AI.
[14:23]
A
Yeah, it feels like there is some validity to this idea of AI search engines are the new competition for Google. And Jeremy, you'd written in a piece and you cited some data saying 41% of US adults now use AI tools like ChatGPT for deeper answers. 32% go to Reddit, 21% TikTok. There's resolve and Polefish, younger folks driving this trend. So it does. And you mentioned some of the data showing that ChatGPT is catching up or coming, pulling level in a lot of respects of search, depending on what metrics you're looking at.
[14:58]
C
But I mean, just to amend that, if you look at search Overall, ChatGPT is minuscule still next to Google search. But when you look at specifically these elaborate questions with full answers, that's where it becomes much more complicated.
[15:18]
B
Yeah. So exactly. It's almost like to paraphrase what you were saying before, should we treat it as its own thing or is this just the future evolution of search and everybody's going to be searching like that? So it's kind of like almost like the really old days of the Internet. I am older than I look. I know. I just use a lot of beauty products. If you look back like a long time ago, people had directories that people found things. So Google was like the new search in that you could write for a natural query. Otherwise you would go into like a yacht Yahoo directory to find sites that were like actually indexed by hand by human beings, you know, so. And then search evolved. So I do think, like, at some point, pretty much everything becomes generative search, or the vast majority eventually does become generative search.
[16:02]
A
Yeah, I don't envy. That's a good point. I don't envy Judge Mehta's position because he was arguing. Unlike the typical case where the court's job is to resolve a dispute based on historic facts, here the court is asked to gaze into a crystal ball and look into the future. Not exactly a judge's forte, he says. He continues saying, these new AI competitors. The new AI competitor reality, sorry, gives the court hope that Google will not simply outbid competitors for distribution if superior products emerge.
[16:37]
B
Marcus, quick follow up. You're good at research. Can you get his email address? Because there's a lot of these judges who. And legislators who I think could very much benefit from just like pinging us directly and asking us what's going to happen so we can tell them and we can make better informed decisions.
[16:54]
A
Funny call, which I know. Do you think he's a pro plus subscriber?
[16:57]
B
Probably, yeah. If not, he should be. We'll give you a discount. Judge Mehta.
[17:04]
A
You mentioned earlier, gents, that there's another case going on and it's an ad tech One Google is under scrutiny for. And in another, Mr. Milley of the BBC noting that regulators will have another shot at forcing a breakup later this month in the remedies phase of the different antitrust case, the US government is mounting against Google over its dominance in ad tech. Steve Law of the New York Times thinks this case will influence other judges who are weighing how to handle monopoly cases in their courtrooms. Yuri, does this ruling in your opinion have any bearing on the second Google Ad tech case?
[17:44]
C
I think it does have a bearing in two ways. One, it sets precedent. It's the first major antitrust trial in the tech world, I'd say since Microsoft, Netscape, there have been others, but the first major one. So I mean that first of all just sets the precedent. It sets the tone a little bit as well in terms of Google, it's changing business position. So I think in those two ways it has an influence going forward. That said, these are totally different issues and it's a totally different court. So it doesn't mean that Judge Brincoma is going to come back and say, you know, take a very light touch as well like Judge Amedda did. It could be totally different. But I do think this decision does influence what she does.
[18:31]
B
Okay, Jeremy, I agree. I mean the Google brand name is the Google brand name. These are not operating as, I mean even if they're different departments and different unit, the fact is these are different parts of a business. But ultimately Google has been branded as a monopolist that then doesn't get reined in the way that you might, you know, if something was a monopoly. So you know, that's kind of like, I think the precedent. I agree, that's being set. I think the only counterpoint is yes, because this is a totally different judge in a totally different venue. Does somebody look and say, well, we didn't correct as much as we ought to have in this particular case and therefore in mine, I have to factor that in and maybe come down harsher. Yeah, I wouldn't totally rule that out. And I think the other thing that we left out is there's a lot of scrutiny on the ad tech side in Europe right now. So does that set some kind of precedent that we look at and we say there is a little bit of arguably alleged self dealing or benefit that Google gets by operating its own ad exchange. So I think that those are all the variables that I would look at when trying to decide how the other case is going to pan out.
[19:47]
A
Yeah, I've got BBC article pulled up right here. Liv McMahon, BBC saying Google just fined about over $3 billion in the EU for allegedly abusing its power in the ad tech sector. This is what Jeremy was just talking about. There was a piece in the Economist gents that was reminding us myself not so long ago, America's tech giants looks like they were vulnerable to a tech lash. That was the word of the year for a couple of years or one of the words. And this kind of douses cold water on that notion to a certain extent. That said, there is still time for tech lash to happen because this is just one of many cases you mentioned, the ad tech case going on with Google. Meta not the judge the company faces a ruling from a judge as early as this fall in an FTC lawsuit over allegations that it snuffed out its nascent competitors. Amazon has its own FTC lawsuit over allegations it squeezed small merchants which are scheduled to go to trial 2027. And the DOJ has sued Apple, saying the company makes it hard for consumers to ditch its devices. So plenty of time. But that tech lash has not happened quite yet. Google did say that it would appeal against both remedies, so maybe none of these actually happen. I think a lot of the experts have said that it probably will lose on appeal, but it is still appealing the exclusive contracts piece of this and having to share data as well. That's all we've got time for for today's episode. Thank you so much Jens for hanging out with me today. Thank you. First to Jeremy.
[21:19]
B
Pleasure as always.
[21:20]
A
And of course to Yuri.
[21:21]
C
Great to be here as always.
[21:23]
A
And thanks to the whole editing crew and to everyone for listening in to behind the Numbers New Market video podcast made possible by DG Media Network. Rob Rubin will be here tomorrow hosting the Banking of Payments show, talking about why stablecoins have taken over the payments conversation and why retailers are racing to launch them.

Summary6 min read

Podcast Summary

Podcast: Behind the Numbers: an EMARKETER Podcast
Episode: Takeaways from the Google Monopoly Verdict — and What Comes Next
Date: September 15, 2025
Host: Marcus Johnson (A)
Guests: Jeremy Goldman, Senior Director of Briefings (B); Yuri Wormsa, Principal Analyst, Ad Media and Tech Teams (C)

Main Theme and Purpose

This episode examines the fallout and implications of the recent US federal court verdict in the high-profile Google antitrust case. Host Marcus is joined by analysts Jeremy Goldman and Yuri Wormsa to break down what the court’s decision means for Google, its rivals, regulators, and the broader search and advertising ecosystems. The team also looks ahead to the next stages in the tech antitrust saga, the effect of generative AI, and potential impacts for companies like Apple and the wider industry.

Key Discussion Points & Insights

1. The Verdict in Brief (03:00–04:00)

Google found to have maintained an illegal monopoly in online search, mainly via massive payments ($20B annually to Apple) to be the default search engine.
Judge Amit Mehta's remedy:
- No forced sell-off of Chrome or Android OS
- Google must share some search data with competitors for six years
- Ends exclusive search engine deals but allows continued (non-exclusive) payments to partners

Jeremy:
"It was almost like a best case scenario if you're Google, especially given some of the strong wording that had come out before... Google got away and was quite lucky in this regard." [03:55]

2. Relief on Wall Street and Investor Sentiment (04:37–04:49)

Alphabet’s shares rose 8% after the verdict, signaling investor relief at the ‘light touch’ remedies.
The market consensus: Google "lost" on paper, but penalties were modest – broadly favorable to Google.

Yuri:
"They lost the trial in the sense that they are called a monopolist... but they have to be happy with the... remedy stage." [04:49]

3. Actual Impact of the Remedies (04:50–08:46)

Data sharing: Google must provide “qualified competitors” with search index and interaction data, but not ad data.
**No more exclusive search default deals, but payments to partners (like Apple) can continue on a non-exclusive basis.
Google had “already given up on exclusivity,” so the ruling mainly maintains status quo.
The data-sharing requirement is “meaningful, but limited”—could help generative AI engines, but unlikely to drastically handicap Google.

Yuri:
"I'm not saying it will [make a large difference], but it's possible that it might." [06:55]

Jeremy:
"Will it make it more competitive? It'll make it more competitive. Will it make it competitive? No... Google has so many advantages... [these remedies] don't really change the landscape all that much." [07:35]

4. Apple: The 'Sneaky Winner' (09:14–10:40)

Apple continues to receive huge payments from Google for its search traffic, just without exclusivity.
If payments stopped, Apple’s annual profit could drop by 15%.
Remedy phase testimony by Apple’s Eddie Cue suggested GenAI-driven search is already eroding Google’s market share on Safari.

Marcus:
"Sneaky winner, Apple, right? It gets to continue to get paid by Google to host its search engine. Just won't be an exclusive contract." [09:52]

Yuri:
"Apple does benefit a lot by this ruling." [10:09]

5. Rise of Generative AI as a Key Factor (10:40–14:58)

Court and commentators agree: the emergence of generative AI (GenAI) shifted the legal and competitive landscape.
Judge Mehta: "The emergence of Gen AI changed the course of this case."
Google claims AI is creating more competition in search; the court appears to agree, opting for lighter remedies.
Market data: 41% of US adults use AI tools (like ChatGPT), 32% use Reddit, and 21% TikTok for detailed info.

Jeremy:
"The AI overviews have a chance to, over time, really cement Google's dominance and its strength in the marketplace." [12:54]

Yuri:
"At the moment, I would say that OpenAI and ChatGPT are ahead in the race for generative AI." [13:20]

6. Definitional Questions: What is ‘Search’ Now? (14:58–16:37)

Is generative AI search a separate market, or the future evolution of search overall?
Analogy: The shift from human-curated directories to the Google era, now moving into an AI-driven paradigm.
Judge Mehta admitted his verdict required forecasting the future:
- "Here the court is asked to gaze into a crystal ball and look into the future—not exactly a judge's forte."

7. Potential Influence on Future Antitrust Cases (17:04–19:46)

Another DOJ case is ongoing against Google for ad tech monopoly; this verdict may set a precedent for remedies.
The two cases are separate but may influence each other’s tone and outcomes.
Europe’s tougher stance: EU recently fined Google over $3 billion for ad tech abuses.

Yuri:
"It sets the precedent. It sets the tone a little bit as well... But these are totally different issues and different courts." [17:44]

8. The Elusive 'Techlash' and What’s Next (19:46–21:18)

The much-anticipated ‘techlash’ (major government crackdown on Big Tech) remains unrealized.
While this verdict generated headlines, it did not fundamentally alter the digital landscape or Google’s structure.
Other major antitrust cases are still ongoing:
- Meta (FTC, competition complaints)
- Amazon (FTC suit, trial in 2027)
- Apple (DOJ suit, device lock-in)
- These could yet trigger more dramatic changes.
Google plans to appeal both remedies (ending exclusivity & data sharing), but experts expect the appeal will likely fail.

Notable Quotes & Memorable Moments

Jeremy (on whether anything fundamental is changing):
"If you're trying to create a true remedy here... not going that far doesn't really change the landscape all that much." [07:35]
Yuri (on generative AI):
"I would say that OpenAI and ChatGPT are ahead in the race for generative AI." [13:20]
Judge Mehta, as summarized by Marcus:
"Here the court is asked to gaze into a crystal ball and look into the future—not exactly a judge's forte." [16:02]

Timestamps for Key Segments

| Time | Segment | |----------|---------------------------------------------------------------------------------------------| | 03:00 | Background & the Google trial verdict explained | | 04:37 | Google and investor reaction to the remedies | | 05:52 | What the data-sharing remedy actually entails & expert reactions | | 06:55 | Will data sharing actually make a competitive difference? | | 07:35 | Has the playing field really moved? | | 09:14 | Apple’s unique win and implications | | 10:40 | AI as a key factor in the verdict | | 12:54 | Does AI help or hurt Google’s dominance? | | 13:20 | Is generative AI a new ‘search market’ and who is leading? | | 14:58 | Data showing US adults’ growing use of ChatGPT and other AI for deep answers | | 16:02 | Judge Mehta’s challenge: predicting where search markets are headed | | 17:04 | The coming ad tech antitrust case against Google | | 17:44 | How this verdict may influence the next phase in antitrust regulation | | 19:46 | The ‘techlash’ revisited; state of major FTC/DOJ cases against Big Tech | | 21:18 | Closing remarks |

Closing Thoughts

The podcast team concludes that while Google is officially labeled a monopolist, the remedies adopted are relatively mild—allowing business as usual with some extra oversight. Apple emerges as a significant beneficiary. The entrance of generative AI into the search wars complicates both competition and legal clarity. Regulators may still have further opportunities to intervene as additional antitrust cases progress in the US and EU, so the story is far from over.

For marketers and industry watchers, the message is: stay tuned. These cases are evolving, and AI-driven change is shifting the ground beneath everyone’s feet.

Loading summary

Transcript49 lines

[00:00]
A
In the rapidly evolving world of retail media, few platforms are as uniquely positioned as DG Media Network. With over 20,000 stores, Dollar General serves as a lifeline for over 90 million shoppers across the US at a time when all shoppers are looking to save money. DG Media Network Media built better hey gang. It's Monday, September 15th. Jeremy, Yuri and listeners, welcome. Behind the Numbers any marketer video podcast made possible by DG Media Network. I'm Marcus and joining me for today's conversation we have Senior Director of Briefings. Living in New York, it's Jeremy Goldman.
[00:44]
B
Happy Hispanic Heritage Month, Marcus.
[00:47]
A
Same to you, sir. And also Principal Analyst who heads up our ad media and tech teams based in New Jersey, it's Yuri Wormsa.
[00:55]
C
Hey, Marcus and Jeremy.
[00:57]
A
Hello, fella. Thanks for hanging out today. Gents. Today's fact. Where does all the coffee come from? So who should we be thanking for this? Sweet nectar keeps us going during the day. Coffee drinkers, gents.
[01:19]
B
I have your share. I think you're more of a tea guy, right?
[01:22]
C
I am, I am.
[01:24]
A
Okay. Brazil is number one. Gives us close to 40% of the world's coffee. Thank you. Brazil in second place. Jens and Guesses, second largest producer of coffee in the world. It's not what you're thinking.
[01:42]
C
Yeah.
[01:43]
B
India, I don't know. Colombia, Kenya.
[01:48]
A
Colombia's third. They have 7%. Vietnam.
[01:52]
C
Oh, wow.
[01:53]
A
With close to a fifth. 17% of the world's coffee comes from Vietnam. So it goes Brazil with 40%, Vietnam with 17. So those two give us well over half. And then a distant third, Colombia with 7% according to the US Department of Agriculture.
[02:09]
C
I had no idea.
[02:10]
B
Vietnamese coffee is great, by the way. Like that. So good.
[02:13]
C
It is very, very good.
[02:17]
A
I don't know if I've tried it before, but I want to now. Govind Butada of Visual capitalist explaining that most of the world's coffee comes from the coffee belt horizontal geographical region that stretches along the equator between the Tropic of Capricorn and the Tropic of Cancer. From this region, the top 10 coffee producers control nearly 90% of the global annual global coffee supply. Thank God for coffee. I had to get to 10am the other day before I grabbed my first cup.
[02:45]
B
So Brazil is like the Google of.
[02:46]
A
Kashi trying to fight people. Yes, exactly. Exactly. Right. Good pivot. Today's real topic, the Google trial verdict. Well played, Jeremy. So Trishla Oswar and Kendra Barnett of Adweek remind us that last August might have been late. After a landmark court battle, U.S. federal Judge Amit Mehta found that Alphabet owned Google, had maintained an illegal monopoly in the online search space, pointing to the company paying certain folks like Apple $20 billion a year to be the default search engine on its devices. We had to wait a year, but the sentence is in. Lily Jamily and Rachel Klun of the BBC explained that Google will not have to sell its Chrome browser or Android os, but must share information with its competitors, at least for the next six years. The U.S. department of justice had demanded that Google sell Chrome, but this decision means it can keep it just no more exclusive deals and also it has to start sharing data with folks. Jeremy, what were some of your top takeaways from the verdict?
[03:56]
B
It was funny because actually Yuri was the first person that I reached out to right afterwards just to talk about it. Thank God for Slack. I thought it was almost like a best case scenario if you're Google, especially given some of the very strong wording that had come out before directed at Google. With this particular case, that was my number one takeaway is Google got away and was quite lucky in this regard. It remains to be seen how lucky everybody else will feel about just having access to select Google data over a certain number of years.
[04:37]
A
Yeah, it definitely feels like Google one. That appears to be the general consensus. Yuri. Shares of Alphabet spiked 8% in the extended trading. Meaning investors appear to be pretty relieved by this.
[04:49]
C
Yeah, I mean they, they lost the trial in the sense that they are called a monopolist. But yeah, they have to be happy with the, with this stage, the remedy stage. Yeah, basically the big punishment is the exclusive, non exclusive, they're no longer able to do the exclusive deals and the sharing data. In terms of the exclusivity, they had basically given up on that. That was not even, I think a major question whether to have to give that up and they had to give up some data, but it wasn't super, super important. That said, the data that they are going to have to share is going to I think make some difference for generative engines, sort of training generative engines. I don't think it's nearly enough data to absolutely handicap Google, but I think it will make some marginal differences for those engines. And given how close the battle for generative AI is right now, I think it is meaningful.
[05:53]
A
Oh, interesting. Okay. Because there were concerns that, okay, how much will these measures actually level the playing field? Jim Jansen, principal AI scientist at Qatar Computing Research Institute, former professor at Pennsylvania State University, says it's hard to know how much Microsoft, OpenAI and others will benefit one from Google. The fact that Google can still pay vast sums to be the most featured search and search engine, they just can't be exclusive deals like you were saying. Two, the data sharing part of this, they were saying it appears to be quite limited. It's only available to qualified competitors. There might be a fair few of those, but only qualified ones and will include just some of its search index and interaction data. Nothing ad related. But Bill Baer, who was an assistant attorney general for antitrust in the Obama administration, agrees, saying the real question is going to be are these data licensing requirements going to be sufficient to create the potential for a more competitive search market? It sounds like you're saying yes to a certain degree. Right?
[06:55]
C
I'm saying maybe. There are a couple things here that are still unclear. One is what exactly is the data they're going to have to share? I mean, it's search index data, snapshots of search index data and user interaction data. The details of that are going to have to be determined by a technical panel. Exactly what types of data will come out that will have some effect on how much impact it will have. And it will also make a difference in terms of training some of these generative engines and whether or not it makes a difference. I'm not saying it will, but I'm saying it's possible that it might.
[07:34]
A
Yeah, yeah.
[07:35]
B
Like the key, the wording that you were using was like, will it make it more competitive? It'll make it more competitive. Will it make it competitive? No. And I think that that's largely part of the problem is if you're trying to create a true remedy here, you do have Google that's very dominant. It was becoming slightly less dominant. Yes. And largely that's in part because there are so many different offerings to consumers in terms of how to search. We didn't even really talk about Chrome yet and the fate of Chrome. But I think that Google has so many advantages that to create a more competitive environment for other players but not going that far doesn't really change the landscape all that much.
[08:18]
C
Yeah, it depends on really how close. If this hadn't, if this agreement, if this remedies phase hadn't happened, say the trial, they were declared not a monopolist. Do these remedies make the battle closer? Do they give some advantages to competition? I think it does. And the real question is, is it enough to make a real difference in terms of who wins and who doesn't? And that's really an open question still.
[08:47]
A
Yeah. Jason Asian of Ink was saying the case was Making the case that antitrust remedies aren't necessarily about punishing bad behavior, they're about restoring competition. And the court decided it seemed a lighter touch was enough because it doesn't feel like they've been handed down a bigger penalty as you would have expected. But that's not really the point here. The point is to try to level the playing field. Are they doing that? We shall see. Also, Mr. Jansen of the Qatar Computing Research Institute was saying that this is an administration nightmare because there's all sorts of privacy issues. He was saying that it will be complicated for Google and the court to manage the data sharing because users agree to share their data with Google, not a third party when they do their searches. So they have to figure that piece out as well. Sneaky winner, Apple, right? It gets continue to get paid by Google to host its search engine. Just won't be an exclusive contract. And Wall street analysts estimating that if Apple wasn't allowed to make, wasn't allowed to receive these payments, its annual profit would have been cut by 15%. So this seems like a big win for them as well.
[09:53]
C
And it's really interesting because I think a key part of the remedies phase of the trial was testimony by Eddie Cue of Apple who said that traffic to Google from Safari went down in March for the first time ever. And I think that was an indication to judge Meta that Gen AI was actually making a difference and starting to have an impact. And Google's stock price dove at that point. But of course, he had some mixed motives there because Apple does benefit a lot by this ruling.
[10:30]
B
And Apple, we're talking about stock price before Apple went up as a result of being able to keep a lot of the benefit that they were getting from this deal.
[10:40]
A
Yeah, yeah. Economists also pointing out that this may even encourage the forging of closer ties between the two firms, with some speculating that Apple will partner with Google running the latter's Gemini AI products on the iPhone. So maybe these guys get closer together as a result. Assistant Attorney General Abigail Slater was saying hopefully, rather hopefully saying the judge's ruling restores competition to the search engine market, but further measures could be needed. So it seems like they're somewhat okay with the verdict or the sentencing, but maybe we'll pursue stronger measures down the road going to the Gen AI piece of this. In a statement after the ruling, Google said today's decision recognizes how much the industry has changed through the advent of AI, which is giving people so many more ways to find information, close quote. It seems the judge agreed, writing, quote, the emergence of Gen AI changed the course of this case. Close quote. Jeremy, what do you make of the argument that the rise of AI search and the competition that comes from that was the reason to enforce more light touch remedies?
[11:53]
B
I mean, I can see it both ways. I think that you can easily make an argument that the rise of AI search further fuels Google's dominance by obviously there's this ad tech component to what's going on with Google right now that's under scrutiny. And as publishers are starved from organic traffic, they're getting less traffic generally. We've discovered, we've actually charted quite a bit of that for our clients. And as a result, I think there's an argument to be made that maybe you should actually be harsher on Google because of this. At the same time, I can see the fact that you do see a little bit of the perplexities of the world and anthropics and obviously ChatGPT being pretty major and maybe saying, well, there is a little bit more of a competitive landscape that is encroaching on Google's territory. So therefore maybe we don't have to slice and dice their company because there are companies that have Google in the crosshairs already, you know. So I see both ways, but ultimately I think that the AI overviews have a chance to, over time, really cement Google's dominance and its strength in the marketplace.
[13:07]
A
Yeah, Yuri, this is interesting because this is what happens when you take five years to make a decision, right? Things change. And this lawsuit was technically filed back in 2020 during the first Trump administration.
[13:21]
C
It absolutely changed into five years, 2020. Google was an undisputed leader in search, still is the undisputed leader in search, but in terms of generative AI search, ChatGPT actually has more daily users and more interactions if you take away AI overviews, which are its own pseudo or partial generative search. But Gemini is catching up at the moment, though. ChatGPT is leading, and that's a fair question, whether it's a separate market from search. I agree with Jeremy, though, that over the long run, Google has distribution advantages, especially after this trial, has cache advantages, has infrastructure advantages. They probably make it the favorite to become the winner in the long range. But at the moment, I would say that OpenAI and ChatGPT are ahead in the race for generative AI.
[14:23]
A
Yeah, it feels like there is some validity to this idea of AI search engines are the new competition for Google. And Jeremy, you'd written in a piece and you cited some data saying 41% of US adults now use AI tools like ChatGPT for deeper answers. 32% go to Reddit, 21% TikTok. There's resolve and Polefish, younger folks driving this trend. So it does. And you mentioned some of the data showing that ChatGPT is catching up or coming, pulling level in a lot of respects of search, depending on what metrics you're looking at.
[14:58]
C
But I mean, just to amend that, if you look at search Overall, ChatGPT is minuscule still next to Google search. But when you look at specifically these elaborate questions with full answers, that's where it becomes much more complicated.
[15:18]
B
Yeah. So exactly. It's almost like to paraphrase what you were saying before, should we treat it as its own thing or is this just the future evolution of search and everybody's going to be searching like that? So it's kind of like almost like the really old days of the Internet. I am older than I look. I know. I just use a lot of beauty products. If you look back like a long time ago, people had directories that people found things. So Google was like the new search in that you could write for a natural query. Otherwise you would go into like a yacht Yahoo directory to find sites that were like actually indexed by hand by human beings, you know, so. And then search evolved. So I do think, like, at some point, pretty much everything becomes generative search, or the vast majority eventually does become generative search.
[16:02]
A
Yeah, I don't envy. That's a good point. I don't envy Judge Mehta's position because he was arguing. Unlike the typical case where the court's job is to resolve a dispute based on historic facts, here the court is asked to gaze into a crystal ball and look into the future. Not exactly a judge's forte, he says. He continues saying, these new AI competitors. The new AI competitor reality, sorry, gives the court hope that Google will not simply outbid competitors for distribution if superior products emerge.
[16:37]
B
Marcus, quick follow up. You're good at research. Can you get his email address? Because there's a lot of these judges who. And legislators who I think could very much benefit from just like pinging us directly and asking us what's going to happen so we can tell them and we can make better informed decisions.
[16:54]
A
Funny call, which I know. Do you think he's a pro plus subscriber?
[16:57]
B
Probably, yeah. If not, he should be. We'll give you a discount. Judge Mehta.
[17:04]
A
You mentioned earlier, gents, that there's another case going on and it's an ad tech One Google is under scrutiny for. And in another, Mr. Milley of the BBC noting that regulators will have another shot at forcing a breakup later this month in the remedies phase of the different antitrust case, the US government is mounting against Google over its dominance in ad tech. Steve Law of the New York Times thinks this case will influence other judges who are weighing how to handle monopoly cases in their courtrooms. Yuri, does this ruling in your opinion have any bearing on the second Google Ad tech case?
[17:44]
C
I think it does have a bearing in two ways. One, it sets precedent. It's the first major antitrust trial in the tech world, I'd say since Microsoft, Netscape, there have been others, but the first major one. So I mean that first of all just sets the precedent. It sets the tone a little bit as well in terms of Google, it's changing business position. So I think in those two ways it has an influence going forward. That said, these are totally different issues and it's a totally different court. So it doesn't mean that Judge Brincoma is going to come back and say, you know, take a very light touch as well like Judge Amedda did. It could be totally different. But I do think this decision does influence what she does.
[18:31]
B
Okay, Jeremy, I agree. I mean the Google brand name is the Google brand name. These are not operating as, I mean even if they're different departments and different unit, the fact is these are different parts of a business. But ultimately Google has been branded as a monopolist that then doesn't get reined in the way that you might, you know, if something was a monopoly. So you know, that's kind of like, I think the precedent. I agree, that's being set. I think the only counterpoint is yes, because this is a totally different judge in a totally different venue. Does somebody look and say, well, we didn't correct as much as we ought to have in this particular case and therefore in mine, I have to factor that in and maybe come down harsher. Yeah, I wouldn't totally rule that out. And I think the other thing that we left out is there's a lot of scrutiny on the ad tech side in Europe right now. So does that set some kind of precedent that we look at and we say there is a little bit of arguably alleged self dealing or benefit that Google gets by operating its own ad exchange. So I think that those are all the variables that I would look at when trying to decide how the other case is going to pan out.
[19:47]
A
Yeah, I've got BBC article pulled up right here. Liv McMahon, BBC saying Google just fined about over $3 billion in the EU for allegedly abusing its power in the ad tech sector. This is what Jeremy was just talking about. There was a piece in the Economist gents that was reminding us myself not so long ago, America's tech giants looks like they were vulnerable to a tech lash. That was the word of the year for a couple of years or one of the words. And this kind of douses cold water on that notion to a certain extent. That said, there is still time for tech lash to happen because this is just one of many cases you mentioned, the ad tech case going on with Google. Meta not the judge the company faces a ruling from a judge as early as this fall in an FTC lawsuit over allegations that it snuffed out its nascent competitors. Amazon has its own FTC lawsuit over allegations it squeezed small merchants which are scheduled to go to trial 2027. And the DOJ has sued Apple, saying the company makes it hard for consumers to ditch its devices. So plenty of time. But that tech lash has not happened quite yet. Google did say that it would appeal against both remedies, so maybe none of these actually happen. I think a lot of the experts have said that it probably will lose on appeal, but it is still appealing the exclusive contracts piece of this and having to share data as well. That's all we've got time for for today's episode. Thank you so much Jens for hanging out with me today. Thank you. First to Jeremy.
[21:19]
B
Pleasure as always.
[21:20]
A
And of course to Yuri.
[21:21]
C
Great to be here as always.
[21:23]
A
And thanks to the whole editing crew and to everyone for listening in to behind the Numbers New Market video podcast made possible by DG Media Network. Rob Rubin will be here tomorrow hosting the Banking of Payments show, talking about why stablecoins have taken over the payments conversation and why retailers are racing to launch them.