An article to understand the US government’s case against Google: the past and future of “angry youth-style antitrust”

According to reports, after 14 months of investigation, the US government finally filed a landmark lawsuit against Google on Tuesday, accusing the search giant of using unfair methods to maintain its monopoly in search and search advertising.

The U.S. Department of Justice, along with 11 states, filed a lawsuit against Google in federal courts, accusing Google of using the money it earned from its leading edge in the search field to “buy” other companies to maintain its leadership position and exclude competitors. For example, Google pays Apple billions of dollars each year to make its search engine the default search engine on the Safari browser, and devices using Google’s Android operating system are pre-installed with Google’s search engine.

The lawsuit reads: “Twenty years ago, the Internet had just risen. From a hastily established startup company, Google became the darling of Silicon Valley by virtue of its innovative search methods. Google has long ceased to exist. Today Google is only monopolized by the Internet. Gatekeeper.”

At a press conference, officials from the Ministry of Justice stated that the government will step in to protect consumers and Google’s competitors’ free access to the market. Officials said Google illegally maintained its monopoly through exclusive commercial transactions. These transactions help Google make its search engine and browser the default configuration on the device and exclude competitors.

“If the government does not enforce antitrust laws to ensure competition, we will lose the next wave of innovation,” Justice Department spokesman Marc Raimondi said at a press conference. “If this is the case, Americans will Never see the birth of the next Google.”

The lawsuit also argues that Google’s anti-competitive behavior is harming three key groups: American consumers, who are “forced to accept” Google’s often controversial privacy policy; advertisers, who must pay Google a “toll fee.” In order to reach their target customers; and technology companies that have a competitive relationship with Google, they “cannot get rid of the shadow of Google.”

The lawsuit initiated by the Ministry of Justice is the largest antitrust case against technology companies since the Microsoft antitrust case in 1998. “According to the antitrust law already enacted, Google’s actions are anti-competitive,” the new lawsuit reads. The Department of Justice also compared Google’s case with the Microsoft case of that year, which set its Internet browser as the default browser on the Windows operating system and cannot be deleted.

If the final result of the Justice Department case is to spin off Google’s search engine, then this lawsuit may pose a potential existential threat to Google’s business. Last quarter, Google’s search engine contributed $21 billion in revenue to the company, accounting for more than half of the total revenue.

Google naturally refuted the basis of the lawsuit, calling the lawsuit an “uncertain allegation” and emphasizing that consumers can easily use products from companies other than Google.

“The lawsuit filed by the Department of Justice today has serious flaws,” a Google spokesperson wrote in a statement. “People choose Google because they are willing to choose Google, not because they are forced to do so or because they cannot find Other alternatives.”

The timing of the suit comes at a time when political relations between large technology companies and the US government are becoming increasingly tense. Allegedly, Attorney General Bill Barr (Bill Barr) has previously requested that the proceedings be accelerated in order to initiate a lawsuit before the November presidential election.

Below, we will analyze this lawsuit in detail, its political consequences, and the future complicated situation facing Google and the Ministry of Justice.

Suing Google

The Department of Justice believes that Google search has a monopoly in the United States, and almost 90% of Internet searches come from Google search. The lawsuit alleges that Google tried to illegally maintain its dominance through anti-competitive behavior.

The Justice Department stated in its lawsuit that Google uses exclusive commercial contracts to restrict rival companies’ ability to place products on Google’s Android mobile devices and spend money to make device manufacturers (such as Apple) and operators (Verizon) give up Other search engines use Google’s search products instead.

The lawsuit argued that these actions violated the nearly 100-year-old Sherman Antitrust Law. The anti-monopoly law prohibits companies from monopolizing through “any contract, merger or collusion”.

The lawsuit also stated that Google took advantage of the profits generated by its huge market share in the search field by paying a certain amount to companies such as Apple, LG, and AT&T to make its products the default search engine on the other’s devices, thereby increasing potential The competition threshold of competitors and further consolidate their market position.

“For many years, Google has been using anti-competitive strategies to maintain and expand its monopoly on general search services, search ads, and general search text ads-these services are the cornerstone of Google’s business empire,” the lawsuit report wrote Tao.

But Google said that its contract is not significantly different from how other companies promote its products.

“Like most other companies, we spend money to promote our services, just like a grain brand will pay the supermarket and put our products in a prominent position,” Google wrote in an article in response to the Department of Justice lawsuit. .

The Ministry of Justice said that Google’s contract helps the company maintain its search monopoly because the scale of the search business helps the effectiveness of the business: the more user data it has, the more accurate the search results. In addition, the more people who use Google search, the more advertisers are willing to pay Google to reach the target group.

“Without quality, influence and financial resources, Google’s competitors will be unable to create any meaningful competitive pressure on Google’s long-term monopoly,” the lawsuit report said. “By stifling competition, Google harms the interests of consumers and advertisers. “

Thomas Campbell, former director of the Federal Trade Commission’s antitrust department and professor of antitrust law at Chapman University, said that another striking aspect of the Justice Department’s litigation is that its focus is on how lack of competition can reduce quality. , Not how Google’s monopoly will increase prices.

Campbell said: “Usually, in antitrust cases, the focus of contention is that due to the existence of exclusive behavior, the market is monopolized and consumers are forced to accept higher prices.” But in this case, “the point is that users can no longer obtain A search engine that protects their privacy.”

Earlier this month, the Antitrust Panel of the House of Representatives Judiciary Committee also issued a report. The scope of the report is broader than this lawsuit. The report of the Antitrust Panel of the House Judiciary Committee also discussed how Google prefers its own search results and suppresses the results of competing search platforms-such as restaurant reviews on Yelp or flight queries on Expedia.

 

The Justice Department’s case only focused on the search business and did not discuss other Google-dominant industries such as online advertising, smartphone operating systems and web browsers. Critics believe that Google uses its advantages in various fields to strengthen its other businesses.

Democratic state attorneys general may be able to address these other issues in future lawsuits. The Ministry of Justice may also continue to expand the scope of litigation as the case progresses.

The complex factors behind the regulation of large technology companies

At the same time that Google was being sued, public and political opposition to the financial and political influence of major technology companies has reached an unprecedented level. Both Democrats and Republicans want to supervise large technology companies, although they have not yet agreed on why and how to supervise these technology giants.

President Trump, as well as many Democratic and Republican lawmakers, are increasingly aggressive, believing that major technology companies such as Google have accumulated too much market power so far. They believe that these companies have stifled competition, leaving consumers with no choice but to use the services of these companies on the Internet.

This is contrary to the general legal attitude of the US government for decades. Historically, the previous view was that to split a company, you must not only prove that it is a monopolistic company, but also prove that consumers paid higher prices for its products because of the lack of competition.

However, in the past few years, this thinking has changed. To a certain extent, this is thanks to the academic movement initiated by a new wave of influential legal scholars—”hipster antitrust” (angry youth antitrust), and the increasing influence of large technology companies on the American public Rising bipartisan political resistance.

“This is a major shift in the government’s attitude towards monopoly power,” said Sally Hubbard, director of executive strategy at the Open Markets Institute, an antitrust nonprofit organization.

Earlier this month, the House Judiciary Committee led by the Democratic Party concluded a year-long investigation of major technology companies and concluded that Google, Amazon, Facebook, and Apple all use monopoly power to protect their respective advantages in the industry. status. This survey laid the foundation for lawmakers to introduce new regulations regulating technology companies in the future.

Democratic activists such as Elizabeth Warren and Bernie Sanders have long insisted that the United States needs new laws to break up these large technology companies. They said that these technology companies have accumulated too much market power and are harming the American people and the American economy.

At the same time, the Republicans have lashed out at technology companies for a more specific reason: unproven, so-called “anti-conservative” bias. Facebook and Twitter recently conducted fact-checks on the content published by Republican politicians and some conservative news organizations, and even blocked unfounded content, which aroused further dissatisfaction among Republicans.

Some conservatives, including Trump, have repeatedly called on Congress to abolish Article 230. This landmark Internet law aims to protect social media companies from litigation for content posted by users on their platforms. Some Democrats, including presidential candidate Joe Biden (Joe Biden), also want to reform Article 230, but the appeal is different from that of Republicans.

At a press conference on Tuesday announcing the lawsuit against Google, Ryan Shores of the Department of Justice made it clear that the lawsuit did not resolve the issues under Section 230.

“This antitrust case is independent of social media issues and has nothing to do with some other (at least for us) technical issues related to distortion or prejudice stipulated in Article 230 of the Communications Act,” Shoals Say.

But the timing of the lawsuit is related to these broader discussions of technological reforms.

In fact, some people have questioned whether the Department of Justice is so eager to deal with Google’s case to initiate a lawsuit before the election to please Trump. Trump has always demanded that the case be advanced as soon as possible, which is part of the Trump administration’s broad policy against large technology companies.

If Biden is successfully elected as the next president of the United States, the Department of Justice under his administration may continue to hear the current case and improve various allegations, or it may completely withdraw the case. Several legal experts said that considering the bipartisan support for regulatory technology companies, the potential Biden administration may somehow continue to advance the lawsuit.

In addition, a poll conducted by Pew Research in June showed that the American public is also increasingly questioning the power of large technology companies. About half of the respondents believe that the supervision of major technology companies needs to be strengthened.

According to previous reports, even some of Google’s own employees (usually anonymous) also said that the company should be split to help Google regain its entrepreneurial spirit. They believe that Google needs such a spirit to maintain continuous innovation.

What does this mean for Google’s future?

Before this lawsuit is resolved in any meaningful way, Google and the Justice Department will face a long and complicated road.

It may take several years for this case to have a result; you know, it took several years for Microsoft’s Ministry of Justice to issue a monopoly case before finally reaching a settlement.

Similarly, Google’s antitrust case may be delayed for several years-and Google obviously has a great chance of winning, or Google can learn from Microsoft and reach a settlement with the US government to avoid being split.

But at the same time, the threat of antitrust actions will also linger, forcing Google to stay in a defensive state, and may slow down the company’s development and prevent it from continuing to adopt business strategies that have made the company successful—for example, acquisitions. Companies such as YouTube, Android, and DoubleClick.

Hubbard said: “When the Microsoft case ended, we saw that they changed their business practices and had widespread impact on the entire industry.” Hubbard believes that in the same way, today’s lawsuit will not only affect Google, but also Influence other technology giants (such as Amazon, Facebook, and Apple) so that they can no longer recklessly acquire competitors or adopt dubious commercial contracts to consolidate their market power.

If more state attorneys general sign to support this lawsuit, the influence of the Justice Department v. Google case may be greater.

However, so far, no Democratic state attorney general has signed up to support the case, but a few state attorneys general, including New York State Attorney General Letitia James, have stated that they have completed their own independent investigations. Later, they may sign up to support the Justice Department case.

Of course, the Justice Department or individual states may also file more lawsuits against Amazon, Facebook, and Apple. As the case goes through, Congress may also pass new legislation.

But regardless of the final outcome of the Justice Department’s lawsuit, for large technology companies, the lawsuit itself has already marked an obvious turning point. Giant companies like Google, while arbitrarily expanding their business empire, will no longer be able to expect to continue to circumvent outdated regulations with impunity. On the contrary, they will be regarded as potentially harmful institutions, and their power needs to be supervised by the government, so they will also face increasingly strict scrutiny and enforcement.