In a 64 page complaint with 194 numbered items, the US Justice Department and 11 states sued Google Tuesday for antitrust violations, alleging that it weaponised its dominance in online search and advertising to kill off competition and harm consumers.
Google’s response, via tweet, points to the fierce opposition it plans to serve up: “Today’s lawsuit by the Department of Justice is deeply flawed. People use Google because they choose to — not because they’re forced to or because they can’t find alternatives.”
The lawsuit marks the US government’s biggest move since its case against Microsoft more than 20 years ago. This comes after 15 months of investigation and could be the opening scene of more antitrust actions against other Big Tech companies.
Here, IANS extracts 10 key takeaways from the Justice Department’s case against a company that now controls about 90 per cent of global web searches. From how it began to where it is now, these excerpts sum up the short history of the rise and rise of a wildly successful online empire.
The last 20 years: “Two decades ago, Google became the darling of Silicon Valley as a scrappy startup with an innovative way to search the emerging Internet. That Google is long gone.”
The Google of today: “A monopoly gatekeeper for the Internet, and one of the wealthiest companies on the planet, with a market value of $1 trillion and annual revenue exceeding $160 billion. 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.”
Precedent: “Almost 20 years ago, the D.C. Circuit in United States vs. Microsoft recognised that anticompetitive agreements by a high-tech monopolist shutting off effective distribution channels for rivals, such as by requiring preset default status (as Google does) and making software undeletable (as Google also does), were exclusionary and unlawful under Section 2 of the Sherman Act.”
Keeping it quiet: “Referring to a notorious line from the Microsoft case, Google’s Chief Economist wrote: “We should be careful about what we say in both public and private. ‘Cutting off the air supply’ and similar phrases should be avoided.”
Internal policing: “In particular, Google employees were instructed to avoid using terms such as “bundle,” “tie,” “crush,” “kill,” “hurt,” or “block” competition, and to avoid observing that Google has “market power” in any market.”
A taste of things to come: “Absent a court order, Google will continue executing its anti competitive strategy, crippling the competitive process, reducing consumer choice, and stifling innovation. Google is now the unchallenged gateway to the Internet for billions of users worldwide.”
Exclusionary: “Google’s exclusionary agreements cover just under 60 percent of all general search queries. Nearly half the remaining queries are funnelled through Google owned-and- operated properties (e.g., Google’s browser, Chrome). Between its exclusionary contracts and owned-and-operated properties, Google effectively owns or controls search distribution channels accounting for roughly 80 per cent of the general search queries in the United States.”
Monopoly revenues: “In the United States, advertisers pay about $40 billion annually to place ads on Google’s search engine results page (SERP). It is these search advertising monopoly revenues that Google “shares” with distributors in return for commitments to favour Google’s search engine.”
Scale is the key: “When asked to name Google’s biggest strength in search, Google’s former CEO explained: “Scale is the key. We just have so much scale in terms of the data we can bring to bear.” By using distribution agreements to lock up scale for itself and deny it to others, Google unlawfully maintains its monopolies.
Good to know: “For mobile browsers, Google is the default search provider for both Apple Safari (approximately 55 per cent share) and Google Chrome (over 35 per cent share), which together account for over 90 per cent of the browser usage on mobile devices in the United States.”