United States vs Google: Antitrust on Trial
US Prosecutors have started proceedings against Google, alleging that the company has intentionally and illegally stifled competition. Prosecutors referred to Google as an “unchallenged gateway”, where “competitors cannot emerge from Google’s long shadow”.
The senior DOJ lawyer opened with the grand claim: “This case is about the future of the internet and whether the Google search engine will ever face meaningful competition.”
Some fighting talk then, ahead of an epic confrontation. If this goes through, other tech giants are next in line to receive some of the same. Many believe that Microsoft will be next.
But does the DOJ have a point? Is Google being anti-competitive? There is no doubt that Google dominates the search market, but is this really a problem? Here’s our analysis and commentary.
Google argues that users prefer it because of the superior experience, not the anticompetitive practices.
It’s hard to argue with Google’s superiority. Since the beginning, Google has understood how to put the needs of the user at the very centre of its search engine. Frankly, it has been disappointing how Microsoft’s Bing and others have failed to keep up.
Google started by making things simple and relevant. It understood the value of links as a vote of confidence in the website and then it prioritised ensuring the quality of those links.
Its strategies have evolved. Google now evaluates websites based on E-E-A-T (Experience, Expertise, Authoritativeness and Trustworthiness) and utilises several purpose-built AIs (such as MUM and Bard). And now it pulls content directly into the user’s search page (controversial to those in the industry, but it does make things easier for users).
I’m just scratching the surface, but to be even briefer – Google got it. It had the vision and has maintained the passion and expertise to see it through. This is why it leads on its mission to “organise the world’s information and make it universally accessible and useful”.
However, although Google’s offering might be head and shoulders above its competition, many users and advertisers would like to see viable alternatives. Specifically, alternatives that don’t raise the same concerns around sensitive issues: Privacy, intellectual property, unfair manipulation of search results, censorship of content (or not enough censorship of content) – and more.
Without getting into a viability discussion of these arguments, surely markets need reasonable choice so that they can vote with their feet (or rather, index fingertip). A monopoly, and certainly one built on unfair practices, denies consumers and advertisers that choice.
What are the anti-competitive practices being levied at Google?
Largely, these concern agreements worth billions (typically more than £10bn per deal), whereby Google are paying to be the pre-installed online search engine for platforms such as Apple, Samsung, and Mozilla.
Google has also been accused of using its monopoly position to discourage Apple and Samsung from developing other means of proving some of their search requirements. The ‘all or nothing’ approach it has supposedly taken with Apple would have slowly prevented Safari from being able to develop a competitive alternative.
Google might be the best search engine, but these shenanigans do seem focussed on expanding their dominance. By removing the risk of non-conforming outliers, Google has tried to ensure that users are not able or motivated to change their default settings.
What is the legal governance around this?
Not clear. This case will be a bit of a trailblazer with implications for other tech giants.
It all depends on whether these practices are illegal because of their anti-competitiveness. The U.S. department Sherman Antitrust Act states: “An unlawful monopoly exists when one firm has market power for a product or service, and it has obtained or maintained that market power, not through competition on the merits, but because the firm has suppressed competition by engaging in anticompetitive conduct.”
Not much help there. “Anticompetitive conduct” is an ambiguous term, and there isn’t much precedent to guide us; society’s laws not being able to keep pace with technology is a frequent issue.
The $10 billion agreements that Google is accused of spending (in inducements to other companies to make its own search engine the default) would surely have been spent for a reason. This indicates that Google’s market dominance isn’t based on its superior product alone. The first question for courts to decide is whether Google’s actions are unlawful, and then whether such a monopoly position is tenable.
Does it matter?
I think so.
The laws here are intended to protect both advertisers and users – and to a lesser extent, competitors.
From an advertiser perspective, including our own clients, the concern is that with such a strong monopoly position there is little opportunity for other competitors to develop a viable product.
If market dominance is being unfairly held up, there is good reason to prevent that.
Even if “anti-competitive conduct” can’t be levied, it would still be wise to ensure an availability of choice. Other monopolies have been forcibly broken into smaller entities. That would undoubtedly be hard to do with search engines, but that returns us to the perennial issue: that technical advancements regularly outpace society’s ability to govern them.
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