You can google it! Trump’s Department of Justice (DOJ) announced overnight its long-waited anti-trust suit against the internet giant’s search monopoly. But the case falls short by only targeting the low-hanging fruit of its pre-loaded distribution deals.
It bypasses the monopoly in what Google actually sells to advertisers: you, or at least the algorithmic predictions of what you’re going to do, harvested through its family of services: the Chrome browser, Gmail, Google Maps, YouTube, Google Nest, Google Assistant, etc, as well as search itself.
It’s more a sequel to the DOJ’s 1998 case against Microsoft bundling Internet Explorer in its software suite. (Ironically that helped open the door to Chrome becoming the world’s dominant web browser.)
Its core claim reflects the findings of competition regulators in Australia and Europe:
The Google of today is a monopoly gatekeeper for the internet and one of the wealthiest companies on the planet. For many years, Google has used anti-competitive tactics to maintain and extend its monopolies in the markets for general search services, search advertising, and general search text advertising — the cornerstones of its empire.
It’s unusual for a case of this scale to be launched so close to an election, particularly when Trump makes big tech such a big part of his conspiracy-laden stump speech. The New York Times reported last month that DOJ staff were concerned Trump’s Attorney-General William Barr was hurrying the case along to help his boss.
Maybe. But Democrats want action too. Leading Silicon Valley critic Senator Elizabeth Warren said: “Two things can be true at the same time: Bill Barr is a corrupt Trump crony … and the Justice Department has the power to pursue a legitimate, long-time-coming suit against Google for engaging in anti-competitive, manipulative, and often illegal conduct.”
At the moment it’s an all-Republican affair, with Trump’s DOJ supported by 11 Republican states.
The case focuses on Google’s strategies for making its engine the dominant player in mobile search by embedding it in the android operating system used by most phones and by paying Apple about US$7 billion to make it the default search engine in iPhones.
Google says it’s “trivially easy” to change your search engine on mobile, and many phones also come pre-loaded with competing apps. If most people choose not to, they say, it’s because Google is just better than its competitors.
In a blog post it said: “The bigger point the lawsuit misses … is that people don’t use Google because they have to. They use it because they choose to.”
Maybe, says DOJ, but people rarely do and that gives Google de facto exclusivity. It points to Google’s arrangements around the android operating system, which the company bought, redesigned and made open-source to encourage take-up as the universal mobile standard.
While android is open-source, Google reaches pre-installation and revenue-sharing agreements with phone makers to pre-load its applications, some of which can’t be deleted or readily bypassed. Acting together, says the DOJ, these two agreements foreclose rivals and protect Google’s monopoly.
The company has also locked up deals to make its search engine the default application in all major browsers (the major access point for search) in exchange for a share of Google’s advertising revenues. (This has been criticised by the Australian Competition and Consumer Commission (ACCC) and by European regulators.)
It is investing heavily to ensure Google search is the dominant player in emerging voice activation.
The action doesn’t seek specific remedies beyond the monopoly finding, and Google’s parent, Alphabet, will fight the case, relying on the decades-long gutting of anti-trust law by corporate-funded legal action and Republican-appointed judges. (That’s why Democratic legislators want to toughen the laws before taking action.)
But it will force the company to act carefully, just as the Microsoft Internet Explorer case restrained that company from expanding outside its core software market 20 years ago.
Australia’s media publishers will be hoping the US action encourages Google to settle payments for content, either through the ACCC mandatory code or in some global agreement. Or it may encourage the company to dig in and fight on both fronts.