Episode 2: Tim Cowen on the proposed search antitrust remedies

Summary

The Monopoly Report: Episode 2 Summary Featuring Tim Cowan on Proposed Search Antitrust Remedies

Introduction

In the second episode of "The Monopoly Report," host Ari Paparo delves deep into the intricate world of antitrust regulations affecting big tech, specifically focusing on Google's search and ad technologies. Joined by Alan Chappelle of the Chappelle Report and special guest Tim Cowan, Chair of the Antitrust Practice at Prescotte & Comley LLP, the discussion navigates the Department of Justice's (DOJ) recent remedies submission in the Google Search antitrust trial.

Correction and Episode Overview

Ari begins by addressing a correction from the previous episode regarding a misreported settlement between the Daily Mail and Google. He emphasizes the podcast’s commitment to accuracy and sets the stage for the current episode's focus on Google's monopolistic practices in search and advertising.

DOJ's Remedies in the Google Search Antitrust Trial

Timestamp: [02:12]

Tim Cowan provides an overview of the DOJ's remedies document, highlighting its concise 10-page structure. The DOJ identifies four primary issues, referred to as the "four Ds":

1. Distribution
2. Display
3. Data
4. Dominance

These points concentrate on Google's monopolization of two main markets: search and text advertising. Cowan explains that Google's dominance in these areas has led to distorted market conditions, primarily through contractual agreements with major players like Apple and Verizon, which have effectively excluded other tech competitors.

Framework vs. Specific Remedies

Timestamp: [03:00]

The discussion touches on criticism that the DOJ's document is too vague, lacking clear mandates such as forcing Google to divest specific units like Android. Cowan counters by explaining that the document sets a framework for further investigation and tailored remedies rather than prescribing specific solutions upfront. This approach allows for a more nuanced examination of how Google has established and maintained its monopolistic position.

Creating Competition in Search

Timestamp: [05:17]

Cowan outlines the DOJ's strategy to dismantle Google's monopoly by:

1. Stopping Infringement: Ceasing Google's current monopolistic practices.
2. Restoring Competition: Implementing measures to encourage new entrants into the search market.
3. Addressing Monopolist Spoils: Managing the value Google has accrued at the expense of consumers.

He emphasizes that simply divesting parts of Google is insufficient. Instead, the DOJ aims to establish a policeable boundary through technology licensing agreements and oversight committees to ensure non-discriminatory access to Google's search index and relevance algorithms.

Challenges in Implementing Remedies

Timestamp: [09:24]

Ari expresses skepticism about the feasibility of creating meaningful competition in search, questioning how the DOJ can ensure that new entrants will effectively compete with Google's entrenched position. Cowan draws an analogy to the traditional phone book system, suggesting that providing third parties with access to Google's index and relevance engine could foster competition, similar to how access to the White Pages enabled multiple Yellow Pages competitors.

Incentives and Compliance

Timestamp: [15:11]

Cowan addresses concerns about Google's willingness to comply with DOJ remedies. He cites his experience with BT in the UK, where regulatory measures successfully enforced non-discriminatory practices. By separating Google's core search functionalities into a new corporate entity and enforcing transparent, contractual agreements, the DOJ can incentivize Google to enhance its offerings while ensuring fair access for competitors.

International Coordination and the Digital Markets Act (DMA)

Timestamp: [28:09]

Cowan highlights the global nature of antitrust actions against Google, noting coordinated efforts among the DOJ, European Commission, UK CMA, and others. He references the European Commission's enforcement of remedies through the DMA, which complements the DOJ's approach by mandating access remedies rather than structural changes. This international cooperation underscores the widespread recognition of Google's monopolistic influence and the collective effort to mitigate its impact.

Advertising Monopoly and Potential Remedies

Timestamp: [20:55]

The conversation shifts to Google's dominance in the advertising sector. Cowan suggests that fostering competition in search inherently benefits the advertising landscape. By enabling diverse search engines to compete, advertisers would have access to multiple platforms, potentially leading to more relevant and cost-effective advertising opportunities. He argues against piecemeal remedies focused solely on advertising, advocating instead for comprehensive measures that address both search and advertising monopolies simultaneously.

Conclusion and Future Outlook

Timestamp: [33:12]

As the episode wraps up, Ari summarizes the key insights from Cowan and previews upcoming episodes, including discussions on the valuation of potential Google spin-offs and further expert analyses. The conversation underscores the complexity of dismantling tech monopolies and the necessity of multifaceted, globally coordinated strategies to restore competitive balance in the digital marketplace.

Notable Quotes

• Tim Cowan [02:24]: "What you've got to do is to look at what the problem is and tailor the remedies to address the problem in a way that is going to actually support an increase in competition."

• Alan Chappelle [05:21]: "I think there's really two ways that I look at this... this is just part of a broader process."

• Ari Paparo [10:06]: "How would the DOJ get confident that this scheme would produce competition other than just like a whiteboard approach?"

• Tim Cowan [15:11]: "If you create competition in search and it's not free, the user isn't going to be that interested in using it when they've got Google for free."

• Alan Chappelle [26:22]: "Is providing access really likely to lead us to a place where Google is no longer able to perpetuate its monopoly?"

Final Thoughts

Episode 2 of "The Monopoly Report" offers a comprehensive exploration of the DOJ's approach to addressing Google's monopolistic practices in search and advertising. Through insightful dialogue with Tim Cowan, listeners gain a nuanced understanding of the proposed remedies, the challenges in implementing them, and the broader international efforts to curb big tech's dominance. The episode serves as an essential resource for anyone interested in the evolving landscape of antitrust regulations in the digital age.

Transcript

[Ari Paparo]

This podcast is brought to you by Chalice. Chalice is the leading AI application for brands applying their own data and analytics in the real time decisioning of ad buys. And now Chalice can deploy custom AI as a pmp. We're talking real time curation at page level to drive any outcome. Learn more about AI that's yours at Chalice AI. That's Chalice AI. Welcome to the second episode of the newest podcast from Architecture Media, the Monopoly Report. The Monopoly Report is dedicated to chronicling and analyzing the impact of antitrust and regulations on the global advertising economy. If you're new to us, you can subscribe to our weekly newsletter at Monopoly Market tv. I'm Ari Paparo and I'm joined today by Alan Chappelle of the Chappelle Report, a monthly syndicated research report that provides an in depth look at these same issues for legal and policy pros. Alan is grabbing the reins of the Monopoly Report and he's doing a great job of it. Writing about TikTok this past week will the US spin out? TikTok was our latest newsletter and if you didn't read it, it was really interesting. Before we go into our guests, I have a correction. So last week in our first episode, Jason Kent was a great guest and he said that the Daily Mail had settled its complaint with Google on its civil antitrust case. And the CEO of the Daily Mail, Richard Cocapello, who's a friend of mine, he emailed me and he wanted us to make a correction that they have not settled with Google. So we apologize for having the wrong information on our show last week. All right, so this episode we have a great guest. We have a lot to talk about. We have attorney Tim Cowan, who is the chair of the antitrust practice at Preschool & Co LLP. Tim is a UK based competition attorney who's been integrally involved in competition cases for decades. He's provided feedback to the DoJ, the EU Commission, the UK Competition Markets Authority is well versed in all this. So Tim, thank you so much for being here.

[Tim Cowan]

Thanks very much, Harry. It's a pleasure.

[Ari Paparo]

So let's just jump right in. So last Tuesday, the Department of justice submitted its remedies in the Google Search antitrust trial. Do you want to give us a quick point of view on what they're asking for? What do you think about it?

[Tim Cowan]

It's a very. One of the things that's extremely good about it is it's a very short document. There's only 10 pages. They're looking for what we describe as four Ds. So they're looking at the problem of distribution. That's the first one. The second one is the problem of display. The third is data. And the final one is dominance. And those four points all relate to what are basically two markets. What Google has monopolized is the market for search and the advertising market that relates to is text advertising. So those are the two markets that are monopolized.

[Ari Paparo]

So some folks were, I would say, disappointed in the doc because they felt it was too vague. They were looking for a headline that, you know, Google to spin off Android or something like that. And instead the docs kind of offered a lot of things, a lot of, A lot of suggestions. Do you have your point of view on that?

[Tim Cowan]

Yeah, I mean, look, what it's doing is it's setting out a framework. It's quite an interesting approach because the, you know, the process is to say, okay, here's our framework, and then there will be further investigation of and disclosure so that they're going to be looking at what you call in the state's discovery of documents and evidence from Google about the issues that they've identified. So what we know to date is that Google has monopolized the market for search and controls search text advertising in a way that raises price. But how it's done that is in two principal ways. One is through contracts. So got a series of contracts with Apple, Verizon, telecoms carriers, equipment manufacturers, OEMs, et cetera. And those contracts contain revenue sharing agreements and default settings in those revenue sharing agreements. So obviously the first thing you look at is to say, well, those agreements need to be adjusted because they've driven the exclusion of all of these other technology players from the market. Right. So this needs to be something to be done to address that. That's relatively simple. The second question, which is, well, how do we create competition? So the first thing that the DOJ is in the process of doing is stopping the infringement. Secondly is saying, okay, how do we put this right, because the market has been distorted. And then thirdly, what do we do about the spoils? What do we do about the monopolist that's generated huge value and benefit for itself at the expense of consumers in the market? So obviously it's not a simple exercise. You can't just say, okay, we're going to divest Chrome, or that isn't a solution. What you've got to do is to look at what the problem is and tailor the remedies to address the problem in a way that is going to actually support an increase in competition.

[Alan Chappelle]

But to get at why isn't this creating a better headline for me?

[Ari Paparo]

Comment?

[Alan Chappelle]

I think there's really two ways that I look at this. The first is that this is the first entree in a broader negotiation as between the doj and Google and the judge. And so this is just a starting point. Second thing is, is that regardless of how this plays out, the DOJ wants to leave itself with enough room that regardless of how it plays out, it can then point to this document and say, oh yeah, this is what we meant all along. And so it's just really part of a broader process. But Tim, I had a question because I've heard some conflicting reports like is the DOJ really considering a divestment of Chrome Play, the AI powered access points and features, or are they really just pushing for a consent decree which would require that Google provide access to the rest of the marketplace for those things, to Chrome data and data from Play and some of their AI products. Is there really a meaningful difference there between those two things?

[Tim Cowan]

I mean, look, go back to the first point, right? There is no competition in search. How do you create competition in search? Well, access to Google's index, access to its relevance engine by third parties. So if you're an existing player in search and you got access to Google's index and its relevance engine, you'd be able to improve and you'd be able to compete more effectively. So that would be a remedy that improves the outcome. But you've then got a problem because if you're not getting the same stuff that Google's getting, you're not getting the same inputs that Google's getting, if they can discriminate, they can continue to exclude you from the market. So how do you police that? Well, to police it and to assess the way that Chrome works, or the way that, you know, the search indexing system works or the relevance engine works, requires you to put it in some sort of a receptacle, a corporate vehicle. You have to have a boundary that you can measure discrimination against. So you need to look at what's being supplied between A and B and whether C gets, you know, equivalent treatment. Well, if, if A and B are just within the one company, you can't really see what's going on. So there's a need to create a policeable boundary and you then got transparency. So the sort of thing that you'd end up with is a technology license agreement. You know, what they get, you know, what other people get from a technology licensing point of view, you know, the commercials around that, you know, how quickly are things provided what happens on latency, what happens on, you know, the provision timing and that type of thing you then going to have. If there's a financial system, what are the cash flows, you know, all of those sort of things. And to make sure there isn't discrimination you need to have those probably properly contractualized and written up and then you can have an oversight committee. What happened in Microsoft was there's a technical oversight committee. So what you'd expect to see is an oversight committee that can police what's going on between different Google entities and third party entities. And I've described this as a policing system because I think that's the most effective way of thinking about it. People talk about divestiture. The policing system could be and could involve somebody else. So you could actually force a disposal. There certainly there's powers to do that or divestiture to somebody else. But that may or may not be necessary. That depends on whether or not you, you know, that's a, that's an additional question. Do you want to change the incentives of the ownership? Because at the moment you've got integrated incentives. Everything is about enhancing Google, enhancing Google's profitability, enhancing the value of search, the value of search funded advertising. That's within the single entity. If you wanted to have an indexing system, for example, that is just good at indexing, maybe it should be in separate hands. Those are the sort of considerations that are encapsulated there and they're within the framing of what the, the DOJ is looking at. And it's going to look, you know, through the disclosure process up to the hearing, you know, what's needed to make that work.

[Ari Paparo]

It seems putting on my technologist hat instead of my policy hat, it sounds a little crazy. Like the idea that you're going to have this giant data feed of everything Google knows about searching and give it to let's say Apple and Microsoft and they're going to create a search engine that steals market share from Google. While consumers seem to prefer Google by quite a bit. It just seems like a fantasy to me. The whole thing seems absurd. Maybe I'm being a big overly critical, I guess turning this into a question. How would the DOJ get confident that this scheme would produce competition other than just like a whiteboard approach?

[Tim Cowan]

Well, I mean maybe I can make it simpler for you. This isn't a direct analogy but if you think about the old fashioned white pages, there was a database for names, addresses and telephone numbers, right? That's an electronic database. Now, if you're a Yellow Pages player, right, so you need access to names, address and telephone numbers and you want to advertise to people. There are lots of different competitors in Yellow Pages. When you had an integrated White Pages and Yellow Pages system within a monopoly in a telecoms business, you only got one answer. What you've got here is the same sort of thing going on because you've got an indexing system and you've got Google's advertising to that indexing system. So what really we're talking about is how do you create competition in the searching for and the use of the indexing system and the advertising on the side. So hopefully that clarifies the craziness. Seen things like that before, right? It's not crazy that you can create competition where it hasn't existed because it's been monopolized. I mean, if you go back, I mean, some of us may be able to go back 15 or 20 years when you had lots of different search engines and people use them all the time. So it's not crazy really to think, well, we have had, you know, competition in search. If you look going forward, we're not talking about turning the clock back. What we're talking about is actually creating some form of competitive pressure on the thing that we call Google search. Now, you and I may also remember the day when you actually got relevant results when you did a search. Now you get about 80% of the page is irrelevant stuff, right? And there's a lot of consumer concern. I've heard from people who are Googlers, ex Googlers, that the product isn't really any good. But actually what you're looking at is the outcome of a protected market, you know, when they've been paying 20 billion a year to Apple to stay out of search, which is essentially what the revenue sharing agreement does, it's little wonder that Apple stayed out of search. But what happens if Apple came into search and started competing, providing products that were relevant?

[Ari Paparo]

You know, the court can't force Apple to go into search. Like, the court could set up incentives that might encourage Apple to go into search, but they can't force another company to do anything.

[Tim Cowan]

Well, of course, but I mean, at the moment what we do know from the trial is that Apple looked extremely closely and going into search and looked at the money side of that, it's an expensive thing to do. So if you're going to replicate what we call the monolith, which is Google has an integrated rolling system, indexing system, relevance engine, criteria for what's relevant and what's not. And then you layer on top of that an ad network that's all completely integrated. Right. If Apple's going to do that's a very expensive thing to do. So what's your minimum efficient scale to get into that market? Well, it's billions, right? It's really expensive. And Microsoft tried that and you know, that didn't work out terribly well. And we know that from the European Commission decision, it's about a billion a month that you've got to spend to get into that. And you'd have to spend that to get in against Google. But what you'd have here is a system where, you know, under the remedy, if you get access to some of the stuff that Google's built that nobody's ever going to replicate, like the index, then you could create competition in search results pages. The ordering, the amount of clutter on the screen, you know, the amount of advertising, the ordering of results. You could multiply lots of different feeds to that. So you could have both a richer set of results, a more specific set of results. You could do vertical search. You could do all sorts of things with search results, including stuff from Google. I think that's quite an exciting opportunity for lots of different companies. So lots and lots of different businesses get into that game. And the lower, it would have a much lower cost of entry. So, you know, you're right to say Apple, you can't force Apple to do it, but maybe if it wasn't being paid 20 billion a year to stay out, it would be interested in getting in.

[Alan Chappelle]

I'm going to come at this from a slightly different perspective than Airy does, because he comes at it from more of an ad tech product perspective, I guess. But just from a pure policy perspective. One thing that Google does really well is take these exact type of scenarios and spin them into ways that benefit Google. I mean, you can only just look at what's going on with the competition of markets authority and the entire privacy sandbox fiasco. So one can imagine a court requiring Google to provide access and then Google forcing the marketplace to jump through a whole bunch of hoops and setting up procedures and maybe being not always clear on what the rule set is in order to get actual access to that data. You know, there's a lot of games that can be played. I mean, I guess the thing I'm sort of left wondering is, is providing access really likely to lead us to a place where Google is no longer able to perpetuate its monopoly?

[Tim Cowan]

I think that's a great question because it raises the issue of incentives. Why would Google have an incentive to comply? Right. So my history was that I did competition and regulatory work for BT in the uk, the big telecoms operator. So I ran that function for a while before becoming general counsel of the global operation. So I had the joy of defending the position and putting forward a proposal when we were seeking to find a way of making money internationally. Putting forward a proposal to Ofcom. It's not just like your fcc, this is actually a competition authority in the uk it's integrated where we said look, we can break out our local access business like they used to be. In the US you had separate Bell operating companies, Bell Atlantic, BellSouth et cetera, running a separate business. We can run that separately. We can also run other businesses and we can offer you a non discrimination obligation which is quite unlike what they got wrong in America. So what happened in the state is that you moved the Bell operating company into separate shareholders hands. We didn't change the monopoly, it didn't really create competition. You just put it in a different place. And what we said was look, we will only use that which we give to third parties. So the non discrimination use of the local access business was available to everybody and that worked out pretty well. It's ended up becoming regulated for other reasons, but that worked out pretty well. Opening the use of the monopoly facility in the interests of the incumbent firm. So in the interests of Google, if Google were to provide third parties that which it uses, you can police that. So if you separate out parts of the activity that's currently integrated, you can see what Google uses, you can make sure that third parties use it. Now if you create a new organization which is going to do that, then it's in Google's interest to upgrade the thing that it uses for itself. Right. So you change the incentive. We've been working with an organization called the Movement for an Open Web and MO involves a group of businesses that are in analytics, ad tech, publishing. And that proposition is something that works pretty well for the advertising and advertising technology and publishing businesses. You know, provided Google treats third parties equally and in a non discriminatory way, then you know, you can see massive opportunity there for a very, a much bigger market. A market that is not constrained as it currently is by only the Google presentation. You could see, you know, vast opportunities. It's not just for the apples of this world to get into this. This could be multiple different websites that are focusing on different vertical activities that would, that would potentially, you know, create a Much more thriving ecosystem. So yeah, there's an opportunity there to get around that problem of dragging the feet. Can I just make one other point you made earlier? The reference, the fact this is a process of negotiation. I'm not sure that's right. I think that we've seen Google get offers, undertakings, made representations, lots of things that haven't worked and that's gone on for about 10 years. The DOJ does not look like it's for turning. This is an organization which is pretty clear on its approach. What may happen is that when the, you know, the process has got a bit further through in front of the judge, the judge may be asked to, you know, provide some interim order that could be quite soon, that could be during the course of 2025. So you can see a modified final judgment coming up and an interim order to make sure that what is being, what we found is a breach of the law. And that breach of the law means that Google has basically ripped everybody off.

[Ari Paparo]

So an interim order might be what, that they stop paying Apple or some more concrete step that's easy to execute?

[Tim Cowan]

Yes, it's going to be something that's definitely going to be easy to execute because it would be an interim order. It depends whether Apple appeals an interim order, depending the outcome of an appeal, for example, was the sort of thing that you'd expect to see.

[Ari Paparo]

What would you say to the cynics point of view, which is the court saying you can't pay Apple 30 billion anymore is the best thing that could ever happen to Google?

[Tim Cowan]

Yeah, I mean they wouldn't have to pay the money. So Google would be richer in the short term, wouldn't it?

[Ari Paparo]

Yeah. And then you have to hope that some competitor steals consumer market share. When consumers overwhelmingly prefer a Google search.

[Tim Cowan]

They prefer Google search because they haven't really seen an alternative and the alternatives have been paid to go away. So it's not just Apple. I mean, Verizon was paid 1.4 billion according to the judgment last year to only ship, you know, products that have got Google Search in them, they get paid a rev share as well. So this, you know what, I've had difficulty because I'm, you know, look at the maths and you say, well, if it's 20 billion to Apple and it's one and a bit to Verizon and then this presumed, this payments to AT&T, you know, all of the, and this isn't just limited to the, to the US this, this is across the world. So all the telecoms carriers who are technologists that know quite a bit about how to do things with, you know, communications and platform technology, they've all been paid off to stay out of the market. So as soon as you stop that, what's going to happen? That's an interesting future, I think, for all of us.

[Ari Paparo]

Like the Mozilla foundation gets the vast majority of its revenue from Google, as an example. So let's transition a little bit to ads. So as background, and you can correct me here, I'm sure you will, which is that they were found to have a monopoly in text ads. Not in, not outside of that. And it's an interesting situation because, like Google Ads is a huge product. You know, it's where all the demand comes from for Google. And in a Bloomberg article earlier this year, they talked about spinning out Google Ads and as a potential remedy. I don't know if that was a leak or what. It seems really complicated to say that, like you can run the search engine, but you can't run the advertising engine that monetizes it. Have you given much thought to the ads remedy?

[Tim Cowan]

I think it goes back to that central point. You know, how do you create competition? Well, if you create competition with search and it's not free, the user isn't going to be that interested in using it when they've got Google for free. So free at the point of use kind of comes with the territory. If you're going to be in the search game, you're probably going to have to provide it free, which means you probably need to provide it funded by advertising. Now, you know, if you've got other income streams, you know, that might well work. But from a holistic DOJ point of view or a, you know, what would be a improving the competitive process, how do you ensure that competition is being resorted rather than distorted, if that's an expression, how do you do that? Well, probably what you need to do is to get access not to the Google Ad feed, but to the data that fuels it. So Google's Hoover is scooping up huge amounts of interaction data from end users. Yes, they have search histories, yes, they have browser histories beyond anything that anybody else would ever dream of. But they've also got interaction data and market data and long tail data, which is just unavailable to anybody else. And from that they create their own IDs for advertising that they used to be shared, like Apple's ID for advertising is shared. And you can see a world in which the remedy would certainly say, well, any third party that wants to use this ID should be freely available. To use it because that's what Google uses. Now we also think that Google uses a lot of other sources of information. So again it comes back to policing the boundary.

[Ari Paparo]

Wouldn't the issue be like putting ads into search? Right, because the IDs and the off site stuff is important but fundamentally most of Google's money comes from text ads and search results. So is the opportunity to get other advertising platforms into the search results on google.com or do you think it's something else?

[Tim Cowan]

I think it's the other way around. I think the idea is that you're not trying to reinforce Google's dominance by saying okay, Google's the only way that you're going to get access to the market and therefore we're going to force other publishers, other sources of advertising into that funnel. I think it's the other way around. I think we need different relationships, different funnels, different search competitors to come in. So the likes of Doc go, the likes of Ecosia that we see at the moment, you could imagine, you know, a much broader range of search competitors and search in itself. It's not the simple software at the front interface that's complicated. It's the, you know, how to, how to optimize the way that words are, you know, when you have an, when you do an accessibility, you know, a query making sure that the systems understand the question that's being asked so that you then have answers that are triggered from searching all of the web, all of the websites that are available. That's the basic proposition.

[Ari Paparo]

So are you, is your chain of logic that like the search monopoly is the core problem and then the ads monopoly will just follow the consumers to other search venues and you don't, you wouldn't advocate, I'm putting words in your mouth. You wouldn't advocate an advertising specific remedy.

[Tim Cowan]

Well if you create competition in search then the advertising is funding the new competitors in search. So that should enable you to get access to more advertising from different sources. At the moment I'm told that if you're a competing search engine you can get a feed for, you know, there is a pre existing product that Google offers which is hey, you know, come here. But you have to then also take Google's ad network. Well I can't see the DOJ accepting that that's bundling the monopoly with the non monopoly product. So what they'll say is no, you can get access to the search and you can do your own advertising and you can get access to their search, their advertising network if you want. But that needs to be opened up so that there's options for competitors.

[Ari Paparo]

Right. But Judge Meadow found that the advertisers were harmed, that the prices had gone up on the advertising. And even if Google's share went down to 50%, they would still have a lock on all those advertisers. So I'm more of now I'm putting on my advocate hat. I think they should have a remedy that's advertising specific on google.com or into AdWords.

[Tim Cowan]

Yeah, I mean I think there'll be a bias towards allowing market forces to do what they can. So if you go back to 2014 and you look at what happened with header bidding, you know, the big publishers number of people got together and bypassed the Google system. It's a different technology that as I understand it used JavaScript but the way that worked was to increase volume and lower price. So publishers were certainly in a, in a much more, you know, much better off. You could see that if you had multiple search engines with multiple outlets and multiple advertising opportunities, it's quite likely that that's going to increase competition. What's also true, which might be a bit of a surprise, is your advertisers should make more money. So if you go back to a cluttered screen with 80% of it not being particularly relevant to anyone and not providing a result, that actually translates into advertisers pushing prices or being pushed to put prices up to struggle to get into the top of the results. But they may well be better off advertising. You know, if you were a, there used to be a thing called MapQuest where you used to be able to go and work out your trek or your travel plans and go walking, hiking, canoeing or whatever. It's the best place to advertise. Walking, hiking and commute and doing equipment. If you've got relevant results next to relevant adverts, that's likely to be more valuable for advertisers, but in a narrower space. Right. And that potentially comes out of having a broader range of different types of search and search engine that's all going to be likely to increase pressure on Google. So it creates competition in search and in search advertiser.

[Alan Chappelle]

So Tim, you've got some insights into a number of the different competition and antitrust cases around the world. I mean, it seems like you've had some involvement with the state AG case. You've certainly had some interactions with the doj. I know of some of the work you've done with the CMA with respect to the third party cookie deprecation in Chrome. Australia, European Union. I'd love your take on how, number one, it seems like this is rather unprecedented, the number of entities that, that seem to be going after Google at this time. But like, in my brain, I just wonder, do all of those entities are ultimately need to sign off on this, or is the DOJ completely separate here? Because Google's going to try to negotiate something that's going to work in their best interests, but that would mean, you know, shuttle diplomacy across a whole bunch of different entities. Anyway, the question here is I just love your kind of thoughts for how that process plays out.

[Tim Cowan]

I think the thing that perhaps isn't known to many people in America is how late to the party the DOJ is. The cases that were originally brought against Google for monopolizing search were brought in front of the Federal Trade Commission in 2010. I was involved in that. You know, this has gone on for over a decade. That didn't go very far. So the Federal Trade Commission didn't push it. It went in front of the European Commission under Commissioner Vestager and she took a decision in 2017 in search. Now that's been appealed and appealed by Google. And on September 10 this year, the final top European court handed down a judgment saying, google, you lose. You have monopolized search. You are abusing your dominant position in European speech. So that's very consistent with, with the DOJ's case in front of matter. So you've got coordination now that's coordination between enforcement authorities. So DOJ's talking to European Commission. So I think you've got already that's pretty tightly coupled. That's there. The problem the Commission had from 2017 onwards was its enforcement arm. And its enforcement mechanism is pretty weak because it had only taken a case against search in relation to shopping. It couldn't do something about search in relation to news or a search in relation to maps or search in relation to images. And so that was a real problem. So instead what happened was they said, well, we need legislation. And so this is a specific piece of legislation called the Digital Markets act, the dma. And that now does address as a remedy, Google's approach across the board. And that's been enforced for over a year. That's being in that, you know, that's gone through the European Parliament, that's been through the, you know, the entire legislative process, while the DOJ hadn't taken its case. So you can see why I'm saying it's late to the party. So, you know, that's all being enforced at the moment. So I think you're seeing international coordination. In the last three years, there's been an increased interest through the G7 to have quarterly meetings among, you know, the DOJ's equivalents in other countries around the world. So the Australians, the uk, the Europeans and others there, and Canada, et cetera, they're all involved in the G7 coordination. So, you know, I think you're seeing unprecedented, really international coordination to deal with. And it's not just Google. This is. This is, you know, online platforms that are controlling everybody's access to everything everywhere.

[Ari Paparo]

As a follow up on that, is there a specific timeline by which you expect Google Search to have some action from under the dma?

[Tim Cowan]

Well, there's an enforcement action which is being looked at at the moment. I don't know quite. I mean, it's kind of imminent at the moment, like this month because they've started their investigation. I haven't looked at the dates. Yeah, I mean, the DMA action is happening now.

[Ari Paparo]

And would the outcome be structural in some form, like similar to the remedies we're talking about here?

[Tim Cowan]

No, it can't be under the dma.

[Ari Paparo]

Okay.

[Tim Cowan]

The dma. DMA actually provides for an access remedy which is very similar to what the DOJ is doing. So you can see that there's a coordination in principle. But as I go back, the point I would make is if there's a structural change that needs to be part of a mechanism that's going to support the creation of competition. So that's really about a policing mechanism which the DOJ can address. It's not a penalty for Google. I mean, if Google had to sell something, it'd probably get good money for it. So I don't see it as being a financial downside, but it is potentially quite important as a way of creating a corporate boundary that you can police things across.

[Ari Paparo]

Right. And to be clear, you think that's possible under the DMA also, or do you think that's only in the U.S.

[Tim Cowan]

No, that's not possible under the DMA.

[Ari Paparo]

Okay, that's not possible. That's good insight. I think it's a good place to tie this up. So that was a really great conversation. I learned a lot and it gave me a lot of perspective. We've got more episodes coming in, the Monopoly Report set for October. I think we're going to have Terry Kawaja here talking about the valuation of a Google spin out and some other activities, as well as some more experts. So please subscribe to the show on Spotify, Apple, YouTube or wherever you listen to podcasts. So, Tim Cowan, thank you so much for being here.

[Tim Cowan]

Thank you.

[Ari Paparo]

And Alan, thank you for continued manning of the ship.

[Alan Chappelle]

My pleasure.