Is Google the new Standard Oil?
January 7, 2021
In accessing this article, I am willing to bet that you likely opened a Google web browser and proceeded to then “google” the FMHS Catalyst website (maybe even using a Chromebook). I am using Google Docs to write this, and I will submit the final draft to Google Drive. Students at FMHS claim to use Google software for “practically all of [their] schoolwork.” Google is everywhere, but maybe not for much longer.
The US federal government as well as eleven states filed an antitrust lawsuit accusing Google’s parent company, Alphabet, of anticompetitive business practices on Tuesday, October 20th. The case largely focuses on Google’s practice of paying tech manufacturers such as Apple and Samsung to use Google as the default search browser, which has allowed the company to take over “…search distribution channels accounting for roughly 80 percent of the general search queries in the United States,” according to Brian Fung at CNN Business. The Justice Department claims that these practices are anticompetitive, harming consumers by stifling their ability to choose alternatives and discouraging innovation in the search market.
Representatives from Alphabet have fought back. Google SVP Global Affairs and Chief Legal Officer Kent Walker wrote that the lawsuit “relies on dubious antitrust arguments…[and] would artificially prop up lower-quality search alternatives, raise phone prices, and make it harder for people to get the search services they want to use.” He goes on to compare Google’s practices to how “a cereal brand might pay a supermarket to stock its products at the end of a row or on a shelf at eye level.”
Antitrust laws protect commerce from unlawful restraints and monopolies or unfair business practices and are nothing new. The first major monopoly restriction law was the Sherman Act passed in 1890 that “outlaws ‘every contract, combination, or conspiracy in restraint of trade,’ and any ‘monopolization, attempted monopolization, or conspiracy or combination to monopolize,’” according to the US Federal Trade Commission. The FTC was actually created as a result of the Federal Trade Commission Act in 1914, which also bans unfair methods of competition. The basic goal of antitrust law as described by the FTC is to “protect the process of competition for the benefit of consumers, making sure there are strong incentives for businesses to operate efficiently, keep prices down, and keep quality up.” The goal of antitrust is to protect the consumer’s interests in a capitalist system.
This recent lawsuit brought against Google was no surprise, and is likely to be the first of many attempts to limit the power of big tech. The Department of Justice as well as a bipartisan coalition of states have been investigating Silicon Valley giants for over a year. A separate congressional report was released recently alleging that Amazon and Apple have behaved anti-competitively in their functions as platforms for sale, and that Facebook has unlawfully practiced targeted acquisitions of potential competitors according to Fung.
The case will be heard by randomly selected US district judge Amit Mehta, who has ruled in antitrust suits against large mergers in the past, according to Kari Paul at The Guardian. Jan Wolfe at Reuters has reported that Alphabet has built a powerful legal team for its defense. The lead litigator is John Schmidtlein from the Washington law firm Williams & Connolly, who successfully defended Google in 2014. He is joined by Kent Walker and Susan Creighton. Ryan Shores, represents the Justice Department along with Jeffery Rosen, who is second in command to Attorney General Bill Barr.
Lawsuits are not unfamiliar to companies as influential as Alphabet, but this one has the potential to be a large blow to the freedom that big tech has experienced over the last three decades in America. Google stands to lose “[much of its] wider advertising business, which brought in $134.8 billion in revenue last year [and accounted] for 84% of Google’s total business,” Fung notes.
This case could represent a turning point in the tech industry worldwide regardless of the way Judge Mehta rules. If the United States wins, Amazon, Facebook, and other big tech behemoths could be next in line. If Google gains a ruling in its favor it could be the signal Silicon Valley needs to let tech become an industry completely dominated by a few powerful corporations. The question is; Will Google reserve its verb status for all of eternity or is “duck-duck-go-ing” the future? That now lies in the hands of the law.