As a young, scrappy, and naive company, Google’s Code of Conduct (since 2000) consisted of the phrase “Don’t be evil.” The company applied those words to how it served its users; how it wanted to provide users unbiased access to information, focusing on users’ needs and giving them the best products and services that the company was capable of.
The phrase was also about doing the right thing more generally, such as following the laws of the land and acting honorably. That was then, and, apparently the tide has turned at Google, both in spirit and perhaps in deed, to the point that the company reportedly removed the “Don’t be evil” phrase from its code of conduct around April/May of 2018.
It’s no surprise then that the US justice department filed a lawsuit against Google on 20 October 2020, accusing the company of abusing its position to maintain an illegal monopoly over search and search advertising. While the European Union (EU) has gone after Google over the years with several law suits exceeding $9 billion for anticompetitive practices – and President Trump had in 2018 attacked the EU for its decisions – the present lawsuit from the Trump government appears to be the first antitrust action against the company to result from investigations by American regulators.
As expected, there are several theories as to why the suit is coming at this time, barely a week before the US presidential elections. Steve Lohr of The New York Times believes there is a political motive in his 20 October 2020 article on the matter: “Politics steered the timing and shape of this suit. Attorney General William P. Barr wanted to move quickly to take action before the election; making good on President Trump’s pledge to take on Big Tech. Eleven states joined the suit.” This could be intended to help Trump’s campaign for re-election. Democrats have criticized big tech companies for dominance and anticompetitive practices, while Republicans, including Trump, seem to be more concerned about the censoring of conservative speech by these companies. The latter might as well have provided the impetus to attack Google at this time. Note, however, that, irrespective of the timing of the suit, the essence of the accusations appears to be valid, as the EU’s actions have demonstrated.
“Countless advertisers must pay a toll to Google’s search advertising and general search text advertising monopolies,” the complaint reads, “American consumers are forced to accept Google’s policies, privacy practices, and use of personal data; and new companies with innovative business models cannot emerge from Google’s long shadow.” “As the antitrust complaint filed today explains, (Google) has maintained its monopoly power through exclusionary practices that are harmful to competition,” Jeff Rosen, US deputy attorney general, reportedly told reporters on a conference call. “If the government does not enforce the antitrust laws to enable competition, we could lose the next wave of innovation. If that happens, Americans may never get to see the next Google.”
The US justice officials have also challenged an arrangement in which Google’s search application is preloaded, and cannot be deleted, on mobile phones running its Android operating system. The company pays billions each year to “secure default status for its general search engine and, in many cases, to specifically prohibit Google’s counterparties from dealing with Google’s competitors,” the suit states, in a move that has “foreclosed competition for internet search.” Google’s alleged anticompetitive practices are “especially pernicious because they deny rivals scale to compete effectively”, and thwart potential innovation, the suit alleged.
Apple and Amazon appear from two different angles in Google’s antitrust deals. Google’s biggest smartphone deal is reportedly with Apple, manufacturer of iPhone, in which Google pays Apple $8 billion to $12 billion in advertisement revenue every year. In this manner, in 2018, the two companies agreed to “work as if we are one company.” The deal is reportedly quite beneficial to both companies, accounting for 15% to 20% of Apple’s annual profits, while almost 50% of Google’s search traffic last year came from Apple devices. The deal is so important that Google views losing it as a “Code Red” scenario, according to the DOJ’s complaint.
It is well known that numerous operating systems (OSs) introduced to compete with Google’s Android eventually fizzled out! The justice department is also blaming Google for the failure of Fire Phone introduced by Amazon in 2014. Fire Phone used Microsoft’s Bing as its default search engine, but is driven by a “forked” version of Google’s Android mobile OS. However, “Google’s anti-forking provisions and policies limited the growth of Amazon’s mobile phone, and of Fire OS, because major manufacturers declined to support Amazon’s phone out of fear doing so would risk their lucrative deals with Google,” the lawsuit says.
What should you expect? The government and Google could reach a settlement; otherwise they will be headed to court, with trials and possible appeals. So, it could take a while. US government’s option to break up Google is a possibility, and several tech experts have, for some reasons, focused on YouTube being removed from Google.
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