The DOJ’s Swing at Google May End Up Hitting Firefox

An odd thing happened on the way to the remedies phase of the Department of Justice’s (DOJ) case against Google’s dominance of the search market.

The DOJ’s proposed remedies may undermine the very competition they aim to foster — particularly in the browser market. The potential ripple effects of their proposal run counter to consumer choice and stand to benefit one of the largest tech companies — Microsoft — all in the name of “competition.”

The DOJ’s Proposal: Banning Pay-for-Default Search Deals

At the heart of the DOJ’s antitrust case against Google is a proposed ban on “pay-for-default” search deals. These agreements involve paying device manufacturers and browser makers to set Google as the default search engine. At trial, the DOJ argued these deals unfairly entrench Google’s market position, stifling competition in the search market.

While the DOJ professes a desire to level the playing field, it may deal a severe blow to one of the few remaining alternatives in the browser market: Mozilla’s Firefox.

For years, Mozilla has relied heavily on a search deal with Google for as much as 80% its revenue. This financial arrangement has been crucial in allowing Firefox to remain a free, open-source alternative.

If the DOJ’s proposed ban on pay-for-default deals comes into effect, Mozilla will likely face a significant financial crisis. Without Google’s competitive bid, Mozilla may be forced to accept a much lower offer from the next highest bidder — most likely Microsoft’s Bing. This financial hit could severely impact Mozilla’s ability to develop and maintain Firefox, meaning that consumers will have one fewer browser to choose from.

Boosting Microsoft at the Expense of True Competition

The irony of this situation is palpable. In an attempt to curb Google’s dominance, the DOJ’s actions may inadvertently strengthen an even bigger player — Microsoft — whose market cap is larger than Google’s:

• Microsoft could reap a double reward: increased usage of Bing at a discount.
• More likely though, opening a new browser window to a Bing search prompt will frustrate users, driving them away from Firefox altogether.

This isn’t a theoretical concern: Mozilla briefly switched default search providers to Yahoo. Users revolted, and Mozilla quickly switched back because “Yahoo Search consistently failed to retain users and search volume over time, reducing the potential revenue [for Mozilla].” Mutual lawsuits and recriminations ensued.

Firefox is an open source browser, known for its standards-compliant design. That bears spelling out. The World Wide Web Consortium (W3C) has, for years, worked with stakeholders among browser and web developers to propose and refine standard models of code so that any developer who writes a standards-compliant website could count on it appearing and functioning more or less identically on any standards-compliant browser.

For many years, standards compliance was theoretical — Microsoft’s buggy and non-compliant Internet Explorer (IE) was so dominant that web developers developed their websites for IE. Most internet users didn’t bother with another browser, because the default was IE-compliance, not standards-compliance.

The debut of Firefox in 2004 changed that — suddenly a standards-compliant browser was taking market share and web developers could finally go back to writing interesting web applications — and could dispense with IE-specific hacks because the competition spurred Microsoft to improve IE, and its later versions were highly-serviceable browser.

A financially weakened Mozilla may struggle to keep Firefox competitive, potentially driving users towards Microsoft’s Edge browser or even Google’s Chrome. The result would be consolidation — precisely contrary to the novel theories of competition policy undergirding the DOJ’s case against Google.

The Need for Holistic Antitrust Approaches

The DOJ’s case against Google serves as a stark reminder of the complexities involved in regulating the tech industry. Proscribing search defaults runs counter to user choice, and ultimately undermines the dynamic, competitive browser market.