It’s an anti-monopoly showdown in D.C. this week as the biggest anti-trust trial in a quarter-century gets underway. It’s the federal government vs. Google in a case that could see the internet empire dismantled.
For the next ten weeks, anti-trust lawyers and several states’ attorney generals will lay out the evidence showing that Google, owned by tech giant Alphabet Inc., illegally rigged the market to squeeze out competitors and lock in its search engine as the only game in town when it comes to finding info on the internet.
A decision from U.S. District Judge Amit Mehta probably won’t come until early 2024, but if he eventually rules in favor of the trustbusters, the process of taking Google apart would then get underway.
Regulators allege that Google uses commercial force and its nearly unlimited cash reserves to protect its command of the internet search market. The government says Google forces smartphone manufacturers to make its search engine the default on their products if they want access to the Android app store—an essential requirement for any non-Apple phone.
The charge echoes one the government made against Microsoft in a 1998 anti-trust case, and several members of the Justice Department’s current team were involved back then. Microsoft had followed a similar strategy to the one Google used. The software giant required computer manufacturers to make Internet Explorer the default web browser on their products if they wanted access to the popular Windows 95 operating system.
The monopolistic practice crushed competitors like Netscape in the early days of the internet and made Microsoft the ruler of the personal computer market.
Monopoly power
Standing as a textbook example of the monopolistic tendencies inherent in the capitalist system, Google has now reached the pinnacle of its development and stands poised for a takedown.
Among the four big tech corporations that dominate the infrastructure of the digital economy—Google, Amazon, Facebook, and Apple—Google is the clearest case of a classic monopoly. The company has almost total control over internet searches around the globe—around 90% of all searches go through its engine. Having Google search engines and Chrome web browsers installed as the default on every Android mobile phone sold, extends that power.
Meanwhile, a third of every dollar spent globally on online advertising flows to Google.
When it comes to getting eyeballs on a page, no company can compete. With Google search, YouTube, Google Maps, and a wide range of online advertising channels, the company is able to capture consumers at every turn—when they search for information or products, watch a video, request a pick-up from a ride-hailing app like Uber or Lyft, or request food delivery.
Consumers’ data is collected constantly and added to Google’s databases to further hone its market-dominating efforts.
A 450-page report from the U.S. House Judiciary Subcommittee on Antitrust released in late 2020 said the company’s control of general online search and search advertising gives it “gatekeeper” status, allowing it the ability to pick economic winners and losers even in other industries.
The report also criticized Google for abusing both advertisers and the public. It said the company often “misappropriates third-party content” to boost its own business, fills users’ search results with ads that generate profit for the company while pushing more relevant results further down the queue, and “extorts users for access to its critical distribution channel.”
Essentially, if businesses want to reach customers by appearing in search results, they have to pay up. But even then, they are often shuffled further down the search page in favor of higher-paying clients or Google’s own content and services.
Further reading:
> Empire of High Technology: Amazon, Apple, Google, Facebook achieve ‘monopoly power’
> Trustbusters target Facebook, but anti-monopoly effort shores up capitalism
> Trump’s Google antitrust lawsuit: Blow against monopoly or political theater?
The search dominance serves to corral advertisers to go with Google, and the advertising, in turn, determines what will show up in people’s search results. It’s a monopolistic loop that gives the company unparalleled power to determine what the public sees when they search, as well as control over the data that advertisers desperately rely on to market their products.
The combination of offering what many consumers found to be a superior search experience and illegally requiring the bundling of its various products might be how Google gained its position of dominance, but the government says the way it maintained that power was also against the law. Huge cash payments of billions of dollars annually keep Google as the default search engine on the iPhone and on web browsers like Apple’s Safari and Mozilla’s Firefox. The trustbusters say it’s a form of payola, a legal term referring to secret or indirect payments for favor.
Trump may have sunk the case
The prosecution of Google is the first major anti-trust case in the tech sector since the Microsoft breakup effort. While it could result in real action against Google, the current trial is the result of a pre-election stunt launched in the weeks before the 2020 U.S. elections.
In an effort to portray President Donald Trump as a populist enemy of big business, Attorney General Bill Barr and several GOP state attorneys general filed suit. Federal regulators had already been gathering evidence and building an anti-monopoly case against Google for years. Barr jumped the gun, however, hoping to piggyback off the government’s efforts in order to help his boss.
Since it was oriented toward scoring votes for Trump, many worried the DOJ’s premature filing of a case could end up giving Google a get-out-of-jail-free card.
Bipartisan investigations in every state except Alabama had been probing Google’s business practices for a number of years, and the DOJ’s own effort has been in the works since June 2019. Many of the career attorneys working on the anti-trust lawsuit have described it as the “case of the century,” on par with the legendary 1911 breakup of the Standard Oil monopoly.
They told the New York Times in the fall of 2020 that a powerful amount of evidence had been amassed against Google, but that they were still working to make the case airtight before it went to trial. They were put on a rush schedule by Barr, however. According to the Times, almost all of the 40 attorneys involved rejected Barr’s order but were overruled.
They wrote a memo hundreds of pages long pleading for more time to put together both the evidence proving Google’s monopoly status as well as the demands that should be made on the company. They also explicitly rejected being made into political tools for the benefit of Trump’s re-election effort.
The lawyers “expressed concern that Mr. Barr wanted to announce the case in September to take credit for action against a powerful tech company under the Trump administration.” With Trump’s campaign struggling to change the topic from his disastrous mismanagement of the coronavirus pandemic, Barr attempted to give Trump a new mantle to run on: conqueror of the unpopular tech giants.
Trump had also repeatedly claimed that Google was “RIGGED” against him and that it only showed “anti-Trump” news stories in search results, so it was a familiar target in the eyes of his supporters.
Right-wing legislators like Sen. Ted Cruz, R-Texas, and Rep. Jim Jordan, R-Ohio, had also been claiming Google’s YouTube and other platforms censored conservatives. Data from search results and social media platform usage actually show the opposite; conservative voices are some of the most highly circulated. With Elon Musk at the head of Twitter (now known as X), that is even more true now than in 2020.
Fearing retribution, several of the lawyers working on the case anonymously said that Barr’s election-oriented deadline may have weakened their case and “ultimately strengthen[ed] Google’s hand” in mounting a defense. They worried the entire anti-trust investigation could be portrayed as a politically driven effort on the president’s behalf—a claim Google will likely make in court.
Headed for a breakup?
The trial begins just as Google is celebrating the 25th anniversary of scoring its first investment—a $100,000 cash infusion from Sun Microsystems boss Andy Bechtolsheim. His check allowed Google’s founders, Larry Page and Sergey Brin, to get their Silicon Valley start-up off the ground.
Today, Alphabet is worth an estimated $1.7 trillion, with most of that money coming from its $224 billion in annual ad sales flowing from its network of digital and software services and anchored to its Google search engine.
Testimony is expected from current CEO Sundar Pichai, who took over from Page four years ago, as well as other top executives. High-ranking corporate officials from other companies, like Apple, may also take the stand.
The best-case scenario from an anti-monopoly view would be the dismantling of Google’s total control, but even a smaller anti-trust victory might see the company compelled to abandon its practices of forced software bundling and paying to be a default search engine.
In the Microsoft trial at the turn of the century, the company lost. It managed to score a partial reversal of the verdict on appeal, however, and later settled with the government. It managed to avoid a forced breakup, but the case opened a hole in its market strategy.
Amid the company’s legal problems and bad publicity, a new company arrived on the scene and was able to move in and take away a sizeable chunk of Internet Explorer’s business.
That upstart competitor? Google.
We hope you appreciated this article. At People’s World, we believe news and information should be free and accessible to all, but we need your help. Our journalism is free of corporate influence and paywalls because we are totally reader-supported. Only you, our readers and supporters, make this possible. If you enjoy reading People’s World and the stories we bring you, please support our work by donating or becoming a monthly sustainer today. Thank you!
CONTRIBUTOR
Comments