Case 1:20-cv-03010 Document 1 Filed 10/20/20 Page 1 of 64
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLUMBIA
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`
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`UNITED STATES OF AMERICA
`U.S. Department of Justice
`950 Pennsylvania Avenue NW
`Washington, DC 20530
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`STATE OF ARKANSAS
`323 Center Street, Suite 200
`Little Rock, AR 72201
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`STATE OF FLORIDA
`PL-01, The Capitol
`Tallahassee, FL 32399
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`STATE OF GEORGIA
`40 Capitol Square SW
`Atlanta, GA 30334
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`STATE OF INDIANA
`302 West Washington Street
`IGCS – 5th Floor
`Indianapolis, IN 46204
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`COMMONWEALTH OF KENTUCKY
`1024 Capital Center Drive, Suite 200
`Frankfort, KY 40601
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`STATE OF LOUISIANA
`1885 North Third Street
`Baton Rouge, LA 70802
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`STATE OF MISSISSIPPI
`P.O. Box 220
`Jackson, MS 39205
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`STATE OF MISSOURI
`P.O. Box 899
`Jefferson City, MO 65102
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`STATE OF MONTANA
`P.O. Box 200151
`Helena, MT 59620
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`Case 1:20-cv-03010 Document 1 Filed 10/20/20 Page 2 of 64
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`STATE OF SOUTH CAROLINA
`1000 Assembly Street
`Rembert C. Dennis Building
`P.O. Box 11549
`Columbia, SC 29211-1549
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`and
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`STATE OF TEXAS
`P.O. Box 12548
`Austin, TX 78711
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`
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`Plaintiffs,
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`v.
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`GOOGLE LLC
`1600 Amphitheatre Parkway
`Mountain View, CA 94043
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`
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`Defendant.
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`COMPLAINT
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`The United States of America, acting under the direction of the Attorney General of the
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`United States, and the States of Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana,
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`Mississippi, Missouri, Montana, South Carolina, and Texas, acting through their respective
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`Attorneys General, bring this action under Section 2 of the Sherman Act, 15 U.S.C. § 2, to
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`restrain Google LLC (Google) from unlawfully maintaining monopolies in the markets for
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`general search services, search advertising, and general search text advertising in the United
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`States through anticompetitive and exclusionary practices, and to remedy the effects of this
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`conduct.
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`2
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`Case 1:20-cv-03010 Document 1 Filed 10/20/20 Page 3 of 64
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`I.
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`NATURE OF THIS ACTION
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`1.
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`Two decades ago, Google became the darling of Silicon Valley as a scrappy
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`startup with an innovative way to search the emerging internet. That Google is long gone. The
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`Google of today is a monopoly gatekeeper for the internet, and one of the wealthiest companies
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`on the planet, with a market value of $1 trillion and annual revenue exceeding $160 billion. For
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`many years, Google has used anticompetitive tactics to maintain and extend its monopolies in the
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`markets for general search services, search advertising, and general search text advertising—the
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`cornerstones of its empire.
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`2.
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`As in many other businesses, a general search engine must find an effective path
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`to consumers for it to be successful. Today, general search engines are distributed primarily on
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`mobile devices (smartphones and tablets) and computers (desktops and laptops). These devices
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`contain web browsers (software applications for accessing information on the internet) and other
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`“search access points” that call on a general search engine to respond to a user’s query. Over the
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`last ten years, internet searches on mobile devices have grown rapidly, eclipsing searches on
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`computers and making mobile devices the most important avenue for search distribution in the
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`United States.
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`3.
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`For a general search engine, by far the most effective means of distribution is to
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`be the preset default general search engine for mobile and computer search access points. Even
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`where users can change the default, they rarely do. This leaves the preset default general search
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`engine with de facto exclusivity. As Google itself has recognized, this is particularly true on
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`mobile devices, where defaults are especially sticky.
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`4.
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`For years, Google has entered into exclusionary agreements, including tying
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`arrangements, and engaged in anticompetitive conduct to lock up distribution channels and block
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`rivals. Google pays billions of dollars each year to distributors—including popular-device
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`3
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`Case 1:20-cv-03010 Document 1 Filed 10/20/20 Page 4 of 64
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`manufacturers such as Apple, LG, Motorola, and Samsung; major U.S. wireless carriers such as
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`AT&T, T-Mobile, and Verizon; and browser developers such as Mozilla, Opera, and UCWeb—
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`to secure default status for its general search engine and, in many cases, to specifically prohibit
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`Google’s counterparties from dealing with Google’s competitors. Some of these agreements also
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`require distributors to take a bundle of Google apps, including its search apps, and feature them
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`on devices in prime positions where consumers are most likely to start their internet searches.
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`5.
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`Google’s exclusionary agreements cover just under 60 percent of all general
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`search queries. Nearly half the remaining queries are funneled through Google owned-and-
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`operated properties (e.g., Google’s browser, Chrome). Between its exclusionary contracts and
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`owned-and-operated properties, Google effectively owns or controls search distribution channels
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`accounting for roughly 80 percent of the general search queries in the United States. Largely as a
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`result of Google’s exclusionary agreements and anticompetitive conduct, Google in recent years
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`has accounted for nearly 90 percent of all general-search-engine queries in the United States, and
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`almost 95 percent of queries on mobile devices.
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`6.
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`Google has thus foreclosed competition for internet search. General search engine
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`competitors are denied vital distribution, scale, and product recognition—ensuring they have no
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`real chance to challenge Google. Google is so dominant that “Google” is not only a noun to
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`identify the company and the Google search engine but also a verb that means to search the
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`internet.
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`7.
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`Google monetizes this search monopoly in the markets for search advertising and
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`general search text advertising, both of which Google has also monopolized for many years.
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`Google uses consumer search queries and consumer information to sell advertising. In the United
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`States, advertisers pay about $40 billion annually to place ads on Google’s search engine results
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`4
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`Case 1:20-cv-03010 Document 1 Filed 10/20/20 Page 5 of 64
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`page (SERP). It is these search advertising monopoly revenues that Google “shares” with
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`distributors in return for commitments to favor Google’s search engine. These enormous
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`payments create a strong disincentive for distributors to switch. The payments also raise barriers
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`to entry for rivals—particularly for small, innovative search companies that cannot afford to pay
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`a multi-billion-dollar entry fee. Through these exclusionary payoffs, and the other
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`anticompetitive conduct described below, Google has created continuous and self-reinforcing
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`monopolies in multiple markets.
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`8.
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`Google’s anticompetitive practices are especially pernicious because they deny
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`rivals scale to compete effectively. General search services, search advertising, and general
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`search text advertising require complex algorithms that are constantly learning which organic
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`results and ads best respond to user queries; the volume, variety, and velocity of data accelerates
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`the automated learning of search and search advertising algorithms. When asked to name
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`Google’s biggest strength in search, Google’s former CEO explained: “Scale is the key. We just
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`have so much scale in terms of the data we can bring to bear.” By using distribution agreements
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`to lock up scale for itself and deny it to others, Google unlawfully maintains its monopolies.
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`9.
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`Google’s grip over distribution also thwarts potential innovation. For example,
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`one company recently started a subscription-based general search engine that does not rely on
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`advertising profits derived from monetizing user information. Another, DuckDuckGo,
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`differentiates itself from Google through its privacy-protective policies. But Google’s control of
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`search access points means that these new search models are denied the tools to become true
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`rivals: effective paths to market and access, at scale, to consumers, advertisers, or data.
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`10.
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`Google’s practices are anticompetitive under long-established antitrust law.
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`Almost 20 years ago, the D.C. Circuit in United States v. Microsoft recognized that
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`5
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`Case 1:20-cv-03010 Document 1 Filed 10/20/20 Page 6 of 64
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`anticompetitive agreements by a high-tech monopolist shutting off effective distribution channels
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`for rivals, such as by requiring preset default status (as Google does) and making software
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`undeletable (as Google also does), were exclusionary and unlawful under Section 2 of the
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`Sherman Act.
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`11.
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`Back then, Google claimed Microsoft’s practices were anticompetitive, and yet,
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`now, Google deploys the same playbook to sustain its own monopolies. But Google did learn
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`one thing from Microsoft—to choose its words carefully to avoid antitrust scrutiny. Referring to
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`a notorious line from the Microsoft case, Google’s Chief Economist wrote: “We should be
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`careful about what we say in both public and private. ‘Cutting off the air supply’ and similar
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`phrases should be avoided.” Moreover, as has been publicly reported, Google’s employees
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`received specific instructions on what language to use (and not use) in emails because “Words
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`matter. Especially in antitrust law.” In particular, Google employees were instructed to avoid
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`using terms such as “bundle,” “tie,” “crush,” “kill,” “hurt,” or “block” competition, and to avoid
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`observing that Google has “market power” in any market.
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`12.
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`Google has refused to diverge from its anticompetitive path. Earlier this year,
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`while the United States was investigating Google’s anticompetitive conduct, Google entered into
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`agreements with distributors that are even more exclusionary than the agreements they replaced.
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`Also, Google has turned its sights to emerging search access points, such as voice assistants,
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`ensuring that they too are covered by the same anticompetitive scheme. And Google is now
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`positioning itself to dominate search access points on the next generation of search platforms:
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`internet-enabled devices such as smart speakers, home appliances, and automobiles (so-called
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`internet-of-things, or IoT, devices).
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`6
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`Case 1:20-cv-03010 Document 1 Filed 10/20/20 Page 7 of 64
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`13.
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`Absent a court order, Google will continue executing its anticompetitive strategy,
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`crippling the competitive process, reducing consumer choice, and stifling innovation. Google is
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`now the unchallenged gateway to the internet for billions of users worldwide. As a consequence,
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`countless advertisers must pay a toll to Google’s search advertising and general search text
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`advertising monopolies; American consumers are forced to accept Google’s policies, privacy
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`practices, and use of personal data; and new companies with innovative business models cannot
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`emerge from Google’s long shadow. For the sake of American consumers, advertisers, and all
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`companies now reliant on the internet economy, the time has come to stop Google’s
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`anticompetitive conduct and restore competition.
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`II.
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`JURISDICTION, VENUE, AND COMMERCE
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`14.
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`The United States brings this action pursuant to Section 4 of the Sherman Act,
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`15 U.S.C. § 4, to prevent and restrain Google’s violations of Section 2 of the Sherman Act,
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`15 U.S.C. § 2.
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`15.
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`Plaintiffs Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi,
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`Missouri, Montana, South Carolina, and Texas by and through their respective Attorneys
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`General, bring this action in their respective sovereign capacities and as parens patriae on behalf
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`of the citizens, general welfare, and economy of their respective States under their statutory,
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`equitable, or common law powers, and pursuant to Section 16 of the Clayton Act,
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`15 U.S.C. § 26, to prevent and restrain Google’s violations of Section 2 of the Sherman Act,
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`15 U.S.C. § 2.
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`16.
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`This Court has subject matter jurisdiction over this action under Section 4 of the
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`Sherman Act, 15 U.S.C. § 4, and 28 U.S.C. §§ 1331, 1337(a), and 1345.
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`7
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`Case 1:20-cv-03010 Document 1 Filed 10/20/20 Page 8 of 64
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`17.
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`The Court has personal jurisdiction over Google; venue is proper in this District
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`under Section 12 of the Clayton Act, 15 U.S.C. § 22, and under 28 U.S.C. § 1391 because
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`Google transacts business and is found within this District.
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`18.
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`Google is a limited liability company organized and existing under the laws of the
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`State of Delaware, and is headquartered in Mountain View, California. Google is owned by
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`Alphabet Inc., a publicly traded company incorporated and existing under the laws of the State of
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`Delaware and headquartered in Mountain View, California. Google engages in, and its activities
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`substantially affect, interstate trade and commerce. Google provides a range of products and
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`services that are marketed, distributed, and offered to consumers throughout the United States, in
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`the plaintiff States, across state lines, and internationally.
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`III.
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`INDUSTRY BACKGROUND
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`A.
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`19.
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`Search Engines, Search Advertising, and General Search Text Advertising
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`In the early 1990s, computer scientists and entrepreneurs explored different ways
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`to search and index the growing number of internet sites. The first computer program or general
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`“search engine” that could perform this task was designed in 1990 by a student at McGill
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`University in Montreal and called “Archie.” Other early general search engines emerged, with
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`different methods of gathering, organizing, and presenting information about internet sites.
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`Google’s founders launched their research project “Backrub” on Stanford University’s network
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`in 1996.
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`20. Most modern general search engines use software to “crawl” the internet,
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`indexing webpages and the information within them. As Google explains, “The web is like an
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`ever-growing library with billions of books and no central filing system. We use software known
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`as web crawlers to discover publicly available webpages. Crawlers look at webpages and follow
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`Case 1:20-cv-03010 Document 1 Filed 10/20/20 Page 9 of 64
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`links on those pages, much like you would if you were browsing content on the web. They go
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`from link to link and bring data about those webpages back to Google’s servers.”
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`21. When a search user enters a query into a general search engine, the software uses
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`algorithms to evaluate the relevance of information on any given webpage to the user’s query.
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`Depending on the query, some general search engines may also search selected proprietary
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`databases for pertinent information to offer additional “specialized” search results. The general
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`search engine then delivers the results on the SERP, with links to, and short descriptions of,
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`webpages the algorithm has curated and ranked. Sometimes, the general search engine will serve
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`ads with the search results.
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`22.
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`Given the internet’s enormous breadth and constant evolution, establishing and
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`maintaining a commercially viable general search engine is an expensive process. Google’s
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`search index contains hundreds of billions of webpages and is well over 100,000,000 gigabytes
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`in size. Developing a general search index of this scale, as well as viable search algorithms,
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`would require an upfront investment of billions of dollars. The costs for maintaining a scaled
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`general search business can reach hundreds of millions of dollars a year.
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`23.
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`General search engines are “one-stop shops” consumers can use to search the
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`internet for answers to a wide range of queries. The United States has only three general search
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`engines that crawl the internet: Google, Bing, and, to a lesser extent, privacy-focused search
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`provider DuckDuckGo. DuckDuckGo combines search results from different sources (including
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`Bing) depending on the search query. A fourth general search engine, Yahoo!, does not currently
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`crawl the internet and instead purchases search results from Bing.
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`24.
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`Consumers can find certain specialized information online using sources other
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`than general search engines. For example, consumers can search retail marketplaces such as
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`Case 1:20-cv-03010 Document 1 Filed 10/20/20 Page 10 of 64
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`Amazon or eBay to shop for products, or go to Expedia or Priceline to compare airfares. Search
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`sites that offer users a narrower, focused set of answers to queries are “specialized search
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`engines.” Specialized search engines are often able to give users deeper topical results than
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`general search engines by using specialized data or information gathered from users or supplied
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`by third parties.
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`25. Most general search engines do not charge a cash price to consumers. At least
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`one, Bing, even offers to pay consumers rewards for using its general search engine. That does
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`not mean, however, that these general search engines are free. When a consumer uses Google,
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`the consumer provides personal information and attention in exchange for search results. Google
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`then monetizes the consumer’s information and attention by selling ads.
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`26.
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`Search advertising first appeared on Google in 2000. During that same year
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`Google launched AdWords, its buying platform for search ads. Two years ago, Google rebranded
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`AdWords as Google Ads.
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`27.
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`To sell ads on its SERP, in 2002, Google adopted auctions for keywords;
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`advertisers would bid on selected keywords, and when those keywords arose in a query, the
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`winning bidder’s ad was shown. At that time, Google also started using a compensation scheme
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`where advertisers pay only when the user clicks on the ad, known as cost-per-click pricing. Some
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`SERP displayed multiple ads. Eventually, Google discovered that it could increase the number of
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`clicks—and its own profits—by ranking ads to promote those with greater relevance and
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`therefore higher expected click-through rates. To help determine placement of ads, Google still
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`uses a “quality score” based on various factors.
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`28.
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`Advertisers use various types of ads to achieve different objectives. Marketers and
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`advertisers typically refer to a “purchase funnel” or “customer acquisition funnel” to describe the
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`Case 1:20-cv-03010 Document 1 Filed 10/20/20 Page 11 of 64
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`average consumer’s various states of mind leading up to a potential purchase, and the type of
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`advertising most effective at each state. The following is an illustration of the purchase funnel:
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`Figure 1
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`
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`29.
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`Search ads enable advertisers to target potential customers based on keywords
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`entered by these users, at the exact moment users express interest in the topic of the queries. For
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`this reason, search ads are lower in the purchase funnel—closer to the consumer’s ultimate intent
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`to make a purchase—than other types of ads that are primarily intended to drive brand
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`awareness. The ability of search ads to provide advertising based on a consumer’s self-disclosed
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`interests, when the consumer is actively seeking information, makes search ads uniquely
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`valuable to advertisers.
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`30.
`
`Historically, general search engines such as Google sold only general search text
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`ads. General search text ads resemble the organic search results that appear on a SERP—what
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`Google refers to as the “10 blue links”—but with a subtle notation that they are “ads” or
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`“sponsored.” Google describes its text ads as follows:
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`11
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`Case 1:20-cv-03010 Document 1 Filed 10/20/20 Page 12 of 64
`Case 1:20-cv-03010 Document 1 Filed 10/20/20 Page 12 of 64
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`Text ads on the Search Network show above and below Google search results. It has three parts: headline text. a
`display URL, and description text.
`
`Comprehensive Insurance | Protect Yourself on a Budget | Get Your Free Quote Today
`www.cxampie.com/insurance
`Get affordable 8. trustworthy insurance. 10% discount on all online quotes, Easily compare insurance plans sideby-side in
`just a few seconds.
`
`
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`Figure 2
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`31.
`
`Over time, general search engines also began to sell some specialized search ads,
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`which promoted specific categories of goods and services such as retail products, hotel rooms, or
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`local services such as locksmiths and plumbers. Figure 3 shows a Google SERP that includes,
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`from top to bottom, specialized search ads (in this case, Google “Shopping Ads” designed
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`specifically to sell retail products), a general search text ad, and an organic search result.
`
`Google
`
`best Brown Shoe
`
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`Q All 0 S'ioapng
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`E) Images
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`IE1 News
`
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`
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`
`Aborl 1,620,000,003 rcurlls (l) 44 seconds)
`
`
`
`Ads - See best Brown Shoe
`
`
`
` Shopping Ads
`
`s~§~
`
`))
`
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`Banana Republic
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`Banana Republic
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`
`
`Spectal otter
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`Ad - wwwtobootcom/ v
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`Look You! Best With Our Handumlted Shoes. 8001:, And Sueakms Flee Shipping Ava lable
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`Figure 3
`
`12
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`Case 1:20-cv-03010 Document 1 Filed 10/20/20 Page 13 of 64
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`32.
`
`Some specialized search providers also sell search ads. For example, advertisers
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`can buy specialized search ads for goods sold on Amazon, hotels presented on Expedia, and local
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`services listed on Yelp.
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`33.
`
`As the number of users of a general search engine grows, advertisers benefit
`
`because they want their marketing campaigns to reach large groups of consumers. But users do
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`not benefit from indirect network effects in an equivalent way. As Google’s Chief Economist has
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`explained, “users do not decide which search engine to use based on the number of advertisers.”
`
`34.
`
`Today, the search advertising business in the United States is enormous—over
`
`$50 billion per year—and dominated by Google. Because of Google’s user base and scale, the
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`company’s search ads have become a “must have” for many advertisers. Advertising agencies
`
`and larger companies often have entire groups that manage search advertising, mostly focused on
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`Google.
`
`B.
`
`35.
`
`Importance of Scale
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`Scale is of critical importance to competition among general search engines for
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`consumers and search advertisers. Google has long recognized that without adequate scale its
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`rivals cannot compete. Greater scale improves the quality of a general search engine’s
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`algorithms, expands the audience reach of a search advertising business, and generates greater
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`revenue and profits.
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`36.
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`The additional data from scale allows improved automated learning for algorithms
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`to deliver more relevant results, particularly on “fresh” queries (queries seeking recent
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`information), location-based queries (queries asking about something in the searcher’s vicinity),
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`and “long-tail” queries (queries used infrequently).
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`37.
`
`Scale is also important for search advertising because advertisers pay more to buy
`
`ads from a search provider with a large audience of potentially interested customers. Google can
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`Case 1:20-cv-03010 Document 1 Filed 10/20/20 Page 14 of 64
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`deliver enormous audiences, especially in mobile, which its competitors cannot. Google’s scale
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`also enables it to better discern which ads are most relevant for which queries.
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`38.
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`Further, to recoup the large investment in creating and maintaining a general
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`search engine, scale is critical to generating the necessary revenues and profits. Even a
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`competitor that syndicates its search results from other general search engines must make
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`substantial investments to compete. The most effective way to achieve scale is for the general
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`search engine to be the preset default on mobile devices, computers, and other devices, as
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`described in more detail below.
`
`C.
`
`39.
`
`General Search Engine Distribution and Default Status
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`Search is like many other businesses in that the owners of general search engines
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`can benefit greatly from a network of distributors to get their products to consumers. Distribution
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`of general search engines takes place primarily through search access points, such as browsers
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`and search apps, typically located on mobile devices and computers. More recently, searches
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`have become available on IoT devices.
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`40.
`
`General search service providers can enter into agreements with various
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`distributors, including computer and mobile-device manufacturers, cell phone carriers, and
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`browser developers, to secure preset default status on computer and mobile-device search access
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`points.
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`41.
`
`New computers and new mobile devices generally come with a number of
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`preinstalled apps and out-of-the-box settings. Computers and mobile devices generally have apps
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`preinstalled that include search access points, such as browsers, search apps and widgets, and
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`voice assistants. Mobile devices may also have hardware features—such as a home button
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`triggering a voice assistant—that a consumer can use to invoke apps with search functionality.
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`Each of these search access points can and almost always does have a preset default general
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`search engine. Being the preset default general search engine is particularly valuable because
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`consumers rarely change the preset default.
`
`1.
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`The Mobile Search Distribution Channel
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`42. With roughly 60 percent of searches, mobile devices represent the largest and,
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`over the last five years, fastest growing search distribution channel.
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`43.
`
`In the United States, Apple iOS devices—those running on Apple’s proprietary
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`mobile operating system—account for roughly 60 percent of mobile-device usage. Apple’s iOS
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`is a closed ecosystem; Apple does not license iOS to third-party mobile-device manufacturers.
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`Another roughly 40 percent of mobile-device usage comes from devices that use Android, an
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`open-source mobile operating system controlled by Google. Unlike iOS, Android is licensable,
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`which means third-party mobile-device manufacturers can use it as the operating system for their
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`devices. All other mobile operating systems, combined, account for less than one percent of
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`mobile-device usage in the United States.
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`44.
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`General search services can be delivered to mobile-device users through a variety
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`of search access points, including: (1) a browser, (2) a static search bar (search widget, referred
`
`to in Figure 4 as the QSB or quick search box) on the device’s home screen, (3) a search app,
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`(4) artificial intelligence software (voice assistants) accessed by a button or voice command and
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`designed to answer voice-initiated queries, and (5) other apps that link to general search engines,
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`such as smart keyboards. Figure 4, from a 2018 Google strategy deck, provides a more specific
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`breakdown of how Google delivers its general search service on Android devices.
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`15
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`Case 1:20-cv-03010 Document 1 Filed 10/20/20 Page 16 of 64
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`
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`Figure 4
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`
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`45.
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`In the United States, both cell phone carriers and manufacturers sell mobile
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`devices. As discussed above, these phones or tablets typically have search access points preset
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`with a general search engine as the default. These preset defaults are usually governed by a
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`distribution or licensing agreement. For instance, Google has contracted with Apple for many
`
`years to preset Google’s search engine as the default for Apple’s Safari browser and, more
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`recently, other search access points on Apple’s mobile devices. When a consumer takes a new
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`iPhone or iPad out of its box, all the significant access points default to Google as their general
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`search provider. Indeed, Google has preset default status for an overwhelming share of the search
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`access points on mobile devices sold in the United States.
`
`46.
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`For mobile browsers, Google is the default search provider for both Apple Safari
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`(approximately 55 percent share) and Google Chrome (over 35 percent share), which together
`
`account for over 90 percent of the browser usage on mobile devices in the United States.
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`16
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`Case 1:20-cv-03010 Document 1 Filed 10/20/20 Page 17 of 64
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`
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`47.
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`Consumers typically do not change their mobile device’s default search functions,
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`making securing preset default status for search access points important for effective distribution
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`of general search engines (and delivery of search ads). As one search competitor noted in 2019,
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`“For the most part, despite the simplicity of changing a default setting to enable customer choice,
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`experience shows us that users accept the default search experience that comes with their device
`
`or the browser.” This fact is especially true on mobile devices; as Google observed in a 2018
`
`strategy document, “People are much less likely to change [the] default search engine on
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`mobile.” Alternative methods of obtaining search access points or encouraging general search
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`engine usage—such as direct marketing to consumers—are not nearly as effective as
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`preinstalling search access points on mobile devices and computers.
`
`2.
`
`The Computer Search Distribution Channel
`
`48. When using a computer, most consumers access a general search engine through a
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`browser, either by (1) typing a query directly into the address bar at the top of the browser, or
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`(2) visiting a general search engine web page and entering a query. Many browsers default to a
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`general-search-engine web page as the home or start screen each time a user activates the
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`browser; this offers users a convenient way to start their search experience.
`
`49.
`
`In the United States, Google Chrome is the leading computer browser, with
`
`almost 60 percent market share. Apple’s Safari browser has approximately 16 percent share on
`
`computers. Mozilla’s Firefox has approximately 7 percent share, and Microsoft’s Edge and
`
`Internet Explorer together have approximately 15 percent share. Other small browsers have a
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`combined share of less than 4 percent. With the exception of Microsoft, most browser developers
`
`have agreed with Google to preset its search engine as the default search provider.
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`Case 1:20-cv-03010 Document 1 Filed 10/20/20 Page 18 of 64
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`50.
`
`Preset default settings are important for computers. Consumers may not
`
`understand that they can change the browser’s preset default general search engine, or consumers
`
`may not bother to invest the time to make such a switch.
`
`51.
`
`For both mobile and computer search access points, being preset as the default is
`
`the most effective way for general search engines to reach users, develop scale, and become or
`
`remain competitive.
`
`D.
`
`52.
`
`Distribution Agreements in Mobile and Computer Channels
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`General search services providers typically enter into licensing and distribution
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`agreements with manufacturers and carriers that distribute mobile devices with search access
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`points. In the United States, roughly 60 percent of all search queries are covered by Google’s
`
`exclusionary agreements. On mobile devices, Google’s exclusionary agreements cover more than
`
`80 percent of all U.S. search queries.
`
`53.
`
`Of the remaining search queries not covered by Google’s exclusionary contracts,
`
`almost half take place on search access points owned by Google. Google is a vertically integrated
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`search provider and distributes search in part through several of its own properties, including for
`
`example its browser (Chrome) and phone (Pixel). Between its exclusionary contracts and owned-
`
`and-operated properties, Google effectively owns or controls search distribution channels
`
`accounting for roughly 80 percent of the general search queries in the United States.
`
`54.
`
`Google’s distribution agreements come in three basic types, with the specific
`
`terms of each agreement depending upon the counterparty and the search access points at issue.
`
`First, Google requires Android device manufacturers that want to preinstall Google’s proprietary
`
`apps to sign