# United States v. Google/Conclusions of Law/Section 1

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CONCLUSIONS OF LAW
I. LEGAL FRAMEWORK
“Section 2 of the Sherman Act makes it unlawful for a firm to ‘monopolize.’” United States v. Microsoft, 253 F.3d 34, 50 (D.C. Cir. 2001) (citing 15 U.S.C. § 2). The offense of monopolization requires proof of two elements: “(1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.” United States v. Grinnell Corp., 384 U.S. 563, 570–71 (1966).
The D.C. Circuit’s decision in Microsoft explains how to evaluate claims of monopolization. The first element—“monopoly power in the relevant market”—consists of two inquiries: (1) market definition, both product and geographic, and (2) power within the relevant market. Microsoft, 253 F.3d at 51. The plaintiff bears the burden of proof on both. Id. The second element—“willful acquisition or maintenance” of monopoly power—involves a burden-shifting inquiry. The plaintiff bears the initial burden of establishing a prima facie case of anticompetitive effects resulting from the challenged conduct. Id. at 58. If the plaintiff makes out its prima facie case, the burden shifts to the defendant to “proffer a ‘procompetitive justification’ for its conduct,” that is, “a nonpretextual claim that its conduct is indeed a form of competition on the merits because it involves, for example, greater efficiency or enhanced consumer appeal[.]” Id. at 59. Finally, “[i]f the monopolist asserts a procompetitive justification . . . then the burden shifts back to the plaintiff to rebut that claim.” Id. “[I]f the monopolist’s procompetitive justification stands unrebutted, then the plaintiff must demonstrate that the anticompetitive harm of the conduct outweighs the procompetitive benefit.” Id.
​The court structures its conclusions of law consistent with Microsoft’s analytical framework. After first summarizing the principles governing market definition, infra Section II.A, the court in Section II.B addresses whether general search services is a relevant product market, and finding that it is, then evaluates in Section II.C whether Google has monopoly power in that market. In Part III, the court considers the three proposed advertiser-side markets. The court finds that Plaintiffs have established two relevant markets—search advertising and general search text advertising—but that Google possesses monopoly power only in the narrower market for general search text advertising. All parties agree that the relevant geographic market is the United States.
The court then determines whether Google has engaged in exclusionary conduct in the relevant product markets. Plaintiffs’ primary theory centers on Google’s distribution agreements with browser developers, OEMs, and carriers. The court first addresses in Part IV whether the distribution agreements are exclusive under Microsoft. Finding that they are, the court then analyzes in Parts V and VI whether the contracts have anticompetitive effects and procompetitive justifications in each market. For reasons that will become evident, the court does not reach the balancing of anticompetitive effects and procompetitive justifications. Ultimately, the court concludes that Google’s exclusive distribution agreements have contributed to Google’s maintenance of its monopoly power in two relevant markets: general search services and general search text advertising.
In Part VII, the court evaluates Plaintiff States’ additional theory of exclusionary conduct: that Google caused anticompetitive effects in the proposed markets by purposely advantaging its own advertising platform over Microsoft’s on its search engine management tool, SA360. The court finds that Google’s SA360-related conduct does not give rise to antitrust liability for two ​reasons: (1) as a matter of law, Google has no duty to deal with Microsoft and (2) Plaintiff States did not produce evidence of anticompetitive effects.
Finally, in Sections VIII.A and VIII.B, respectively, the court discusses the intent evidence in this case and Plaintiffs’ request for sanctions under Rule 37.