3 Lessons on Sustainable Leadership from the Google Antitrust Ruling

When Google CEO Sundar Pichai spoke at a sustainability event at Stanford University in April, he said his biggest concern as a leader was maintaining public trust in the companies he oversaw. But four months later, Google was convicted of violating the Sherman Act, also known as the first antitrust law.

Is Pichai’s dream of trust turning into an antitrust nightmare? And does the Google antitrust ruling hold important lessons for other CEOs? Here are three lessons on sustainable leadership—and a bonus lesson on how NO think and talk about trust.

Lesson 1: Multi-billion dollar defaults don’t generate profits

According to the 277-page ruling, Google spends billions of dollars a year to be the automatic search engine in browsers like Apple’s Safari and Mozilla’s Firefox. And it seems to be worth every penny.

In exchange for lucrative payments, Google not only gets default placement on key search access points. Its partners also agree not to preload any other generic search engine on the device.

As a result, most devices in the U.S. and much of the rest of the world come pre-loaded with only Google apps, giving the company nearly 90% of overall search queries by 2020 and 82% market share by 2023.

As of May 2024, Alphabet, Google’s parent company, was the world’s largest internet company, with a market capitalization of $2.18 trillion.

But now an antitrust ruling is forcing Google to find new ways to make money. The default part is being removed from their multibillion-dollar default contracts. And they are having to face one of the oldest truths of sustainable leadership: that nothing lasts forever.

The antitrust ruling shows that while default-based contracts may be profitable in the short term, paying other companies to deceive users and make them believe they have no choice but to use your product is not profitable in the long term.

Lesson 2: Enslaving Users to Their Habits Is Counterproductive

John Sherman, the U.S. senator from Ohio after whom the Sherman Act is named, justified the passage of the first antitrust law in 1890 with the following statement:

“Monopolies are incompatible with our form of government. If we will not tolerate a king as a political power, … we should not submit to an autocracy of commerce.”

According to the antitrust ruling, Google is not only guilty of monopoly in the sense of “unreasonably restraining trade.” It is also guilty of monopoly in the sense of unjustifiably restricting users’ freedom of choice.

During the hearing, Antonio Rangel, a professor of neurobiology, behavioral biology, and economics, testified that the vast majority of searches are done out of habit. As such, the ruling reads: “Many users do not know that a default search engine exists, what it is, or that it can be changed.”

Google’s own research not only confirms this, but underscores the business benefits of enslaving users to their own habits: “Inertia is the path of least resistance. People tend to stick with the status quo because it takes more effort to change.”

In short, people use and benefit from Google because Google prevents them from seeing it as an option. NO use Google. With billions of dollars in default contracts, user inertia has been the foundation of Google’s strategy to become the king of commerce.

But now the antitrust ruling is a wake-up call for all Americans to rise up against this subtle oppression and remember that not only are we free to choose the search engine we want to use, we also live in a free country where leaders are punished for using their political and economic power to restrict the freedoms of others.

Lesson 3: Superiority is the problem, not the solution

The most important lesson about balanced leadership comes neither from the prosecutor nor the defense, but from a former Google executive.

According to Google, the company secured default distribution because of its “better product,” “better quality,” and “better business acumen.” The simple explanation for Google’s success, Google says, is Google superiority.

However, former Google Senior Vice President of Advertising and Commerce, Dr. Ramaswamy, has a different explanation.

When the court asked him why Google pays billions of dollars in revenue shares when it already has the best search engine, he replied that the payments “make the ecosystem uniquely resistant to change.”

In other words, Google’s superiority doesn’t cause the ecosystem to evolve. Rather, it makes Google to prevent ecosystem from evolving so that it can stay better. According to Ramaswamy, Google’s multi-billion dollar default transactions provide an extremely strong incentive for the ecosystem to do so Thread:

Partners receive remuneration NO to preload other search engines on their devices. Users are used to NO think they have a choice. And employees are trained NO to talk about Google as anything other than superior. But to say that others are doing nothing is NO what is sustainable leadership. In fact, it is quite the opposite.

Only by empowering everyone – partners, customers, employees and even competitors – to solve problems that no one can solve alone can leaders contribute to a sustainable marketplace and planet.

Bonus Lesson on Trust

At a forum at Stanford University, Pichai said the trust he and Google are seeking is hard-earned, easy to lose, and takes constant work to earn.

But viewing trust as something that executives and companies can gain, lose, and gain again doesn’t solve the antitrust nightmare that Google finds itself in. Instead, it turns trust into another cog in the buy-it-all machine of superiority that created it in the first place.

Trust is not something You build and maintain with I. This is something We build and maintain together. Like friendship, trust is a two-way street between equals, where one is not subordinate to the will of the other.

If you don’t trust people to make their own decisions—because you’re afraid they’ll choose another partner, product, or employer over you—you can’t expect them to trust you. You may think you put trust at the top of your decisions, but if you don’t trust people to know what’s in their own best interests, they won’t trust you to make decisions that go beyond your interest.

The Google antitrust ruling is a billion-dollar case study in how you can effectively buy, habituate, and manipulate people into doing—or not doing—what you want them to do over time. But sooner or later, someone will start asking questions. And if you’ve built your entire business and leadership around preventing people from making their own decisions, the trust you thought you earned but really bought will be worthless.