Antitrust Criminalizes Google’s Productive Virtue

What’s dangerous isn’t Google’s market power — it’s the unchecked political power used against it.

Written by Marek Michulka

A shorter version of this article was published in RealClearMarkets on May 6, 2025.

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The Department of Justice has successfully prosecuted Google in two separate antitrust suits, with the latest decision against Google announced April 17. The DOJ is now seeking to break up Google for its “illegal excess” of market power in internet search and advertising.

These cases reflect the basic premise of antitrust law: the notion that “excessive” market power is harmful and must therefore be restricted. But this premise is totally unjust. Google’s market power should be celebrated, not reviled or curtailed. Google has earned it by continually providing the world’s most excellent solution to one of the central problems of the internet age and by creating a stunning amount of value where none existed before.

Before Google, the internet was a chaotic sprawl of poorly indexed pages, clunky search engines, and primitive web directories that felt more like library catalogs than useful tools. And because accessing the internet was so inefficient, users had populated it with far less useful knowledge than it has today. Even in its relatively infant state, the internet was history’s greatest store of knowledge. But because it was not searchable, most of that value lay dormant. The true potential of the internet would only be realized when people could intuitively and reliably access the information it held.

This was Google’s breakthrough. At Stanford, Larry Page and Sergey Brin devised a groundbreaking algorithm called PageRank, which ranked websites not simply by keywords but by how useful they had been to previous users searching for the same terms. For instance, if someone searched “intro to economics,” Google would surface the pages that other users had found most helpful, as judged by factors like time spent on the page and links clicked. It was a revolutionary shift in how information was retrieved online. Suddenly, users could type what they wanted in natural language and receive pages that were proven to be useful.

The result was a tool so effective and intuitive that it quickly became indispensable. The value of Google to users compared to competitors like AltaVista or Yahoo was so obvious and immediate that it rapidly began to dominate the market. In 1998, when it was founded, Google served 10,000 search terms per day. In 1999, it served 3.5 million. Six months later, it served 18 million. By the early 2000s, its dominance was so complete that “google” even became a verb. Google wasn’t just one way to search the web, it was searching the web.

The easier it became to find useful information, the more worthwhile it became to upload useful information. Users began to expect that if they needed an answer, Google was the place to find it. In turn, creators, companies, and institutions began flooding the internet with information designed to be useful, relevant, and discoverable in the hopes of showing up in a Google search. Google didn’t just unlock the internet’s existing value, it also rewarded the creation of even more valuable content on the internet.

Among the most valuable types of content people searched for was advice on what to buy. Many search terms — “cheapest hair dryers,” “best laptops under $1,000,” “top-rated hiking boots” — amounted to variations on the question: “Which product should I get?” Recognizing and further incentivizing this behavior, in 2000, Google introduced AdWords (now Google Ads), allowing businesses to pay to appear alongside relevant search results. At launch, the platform served just 350 businesses and generated $7 million in revenue, but by 2013, it had over a million advertisers and was generating $50 billion in revenue.

Google’s ad service eventually became so valuable that Google developed an interconnected auction system linking together advertisers with publishers selling ad space. These tools were so successful that advertising accounts for over 70 percent (over $300 billion) of Google’s revenue.

Google earned its market power by creating the front door to what was already the greatest store of knowledge in human history, providing it for free, and, almost as an afterthought, developing one of the most effective systems in history for matching advertisers to buyers. These were unequivocally good things. Google revolutionized how people acquire knowledge and products — and its founders, employees, and shareholders profited exceptionally in the process.

It is for these virtues — for being an unprecedented source of knowledge, products, and wealth — that Google has now been condemned.

The DOJ officially charged Google with maintaining an illegal monopoly in the internet search and search advertising markets. In the search market, its primary offense has been its $20 billion per year deal with Apple making it the default search provider on their devices. According to the court, these “exclusionary” contracts substantially alter the character of the search market, making it more difficult for competitors such as Bing and DuckDuckGo to gain market share. In the advertising market, Google’s offense has been conducting “monopolistic” practices by centralizing all aspects of digital advertising — buying, selling, and matching — into their core business. This, according to the courts, prevents other ad-exchange services from operating competitively. As a result, the courts decided, Google possesses an illegal degree of power over these markets.

Without a doubt, Google possesses a form of “power” over internet search and advertising. But consider the character of Google’s power compared to the political power under which it now suffers.

Google possesses what is commonly called “market power,” which is the ability to make economic offers to large numbers of people. If those offers are excellent, then people accept them en masse, and if not, they don’t. Market power means only that Google has an unmatchably good proposition to offer. This has been the case with Google since its founding, and essentially continues to the present day.

Market power is neither gained nor maintained by coercion. The only kind of power that could allow Google to have a truly unassailable market position is a government enforced monopoly, which Google in no way possesses. Google’s lack of serious competitors in the search and advertising markets comes not because it has “prevented” other companies from competing — it outcompeted many — but because it has created a service that billions find superior.

In an ironic demonstration of the fact that Google does not “prevent” competitors from arising, Google’s long-term dominance is now coming under serious threat from AI-based search services, such as ChatGPT and Perplexity.

Google has provided decades of evidence that its search engine is a fantastically good service. From the profit and reputation of its revolutionary product, Google contracted with Apple, a revolutionary company in its own right, to become their default search engine. If Google were a less productive company, users would increasingly flock to superior secondary engines and Google would have not been able to afford Apple’s (staggering) $20 billion yearly fee for this privilege. If Google were no longer the best search engine available, Apple would also have increasing incentive to replace Google as its default. Google’s influence over Apple’s users is a form of power, but it is one earned and kept by means of productive virtue, and one which crucially plays to the benefit of all: Apple, Google, and their billions of satisfied users alike.

The same is true of Google’s advertising platform. As Google itself sparked the explosion of content on the open internet, it was uniquely positioned to be its central ad exchange. If Google were less excellent at understanding how and when to deliver advertising, their services would be quickly replicated and forgotten. As in the search market, Google does possess vast market power, but it is a power earned and kept by means of virtue.

In a free market (which digital search and advertising mostly are), people should celebrate, not revile, market power. Producers earn it by creating more value than their competitors, and they inevitably lose it if that changes. Market power is a good thing. Companies possessing it deserve to have their freedom protected, not restricted.

The DOJ, however, empowered by antitrust laws, possesses a very different form of power: “political power.” Political power means the capacity to direct the use of physical force in society, i.e., the power of legalized destruction. In this context, the DOJ has the power to dismantle Google and any other company that violates the dictates of antitrust law. Political power is what must be carefully reined in, so as not to violate individual rights. Failing to do so unleashes destruction on one’s own country and on the world.

And destruction is precisely what the DOJ promises to inflict on Google. The DOJ and the courts have determined that Google must be “broken up,” which means it will be scrutinized in order to determine which elements of its business contribute most to its market power, and those elements will be ripped from it. It is not yet clear what Google’s specific punishment will be, but the intent is clear: remedy by force the “evil” of Google’s excessive value-creation.

There are many different flavors of injustice in the world: one can minimize another’s virtues or exaggerate or invent their faults. But I can think of no injustice deeper or more sinister than casting virtues as vice. This is the character of the antitrust suit against Google. It is not an indictment of excessive market power, but a demonstration of unchecked political power targeting a company precisely for its success.