US Justice Dept. Sues Google Over Abuse Of Power On Online Search Services

GOOGLE AND US JUSTICE DEPT

LAGOS SEPTEMBER 11TH (NEWSRANGERS)-A federal judge will start hearing claims this week from the Justice Department and a group of states that Google abused its power as a monopoly over online search services.

Google is synonymous with looking for information online and has leveraged its massively successful search tool to build a giant business spanning advertising, cloud computing and the online video powerhouse YouTube.

The outcome of the trial will have even broader implications than Google’s business. By putting decades of Silicon Valley practices under the microscope, it will provide an indication of how successful regulators in the United States will be in their efforts to rein in the power of Big Tech.

What’s this trial about?

A judge will consider whether, as the Justice Department and a group of states argue, Google abused its power as a monopoly. It’s the first monopoly trial against a tech giant since the landmark proceedings against Microsoft more than 20 years ago.

In the decades since, Google has amassed 90% of the search engine market in the United States and 91% globally, according to Similarweb, a data analysis firm.

Why does it matter?

If Google loses this case, the ruling could chip away at its stature and influence in the technology industry — something that could limit the way Google can compete in the marketplace and reshuffle power in Silicon Valley.

It is also a test for governments that say tech giants such as Google, Apple, Amazon, Microsoft and Meta, which owns Facebook and Instagram, have too much influence over our online lives. The nation’s antitrust laws were first written more than a century ago, and this trial will show whether they can be used to rein in the fast-moving tech industry.

What is Google accused of doing?

The Justice Department has accused Google, which is based in Mountain View, California, of illegally using partnerships with phone makers and internet browser companies to shut out rival search engines.

Thanks to agreements with companies such as Apple, Samsung and Mozilla, Google has been the default search engine when billions of web users open a browser on their phones, tablets and personal computers. The government has argued that Google’s multibillion-dollar payouts to partners have prevented other search engines such as Microsoft Bing and DuckDuckGo from accumulating a meaningful share of the online search market.

The Justice Department also claims Google’s practice of preloading its services on devices that use its Android software illegally helped the internet company maintain a monopoly.

What does Google say?

Google says that its business practices are legal and commonplace, and that when it pays to appear on Apple’s Safari browser or Mozilla’s Firefox, the agreement is akin to a maker of cereals paying supermarkets to stock its boxes at eye level.

The search giant has also repeatedly argued that it has numerous successful competitors in online search. The company points to companies such as Amazon and TikTok as thriving competitors. Even though they do not operate general-purpose search engines, Google argues that they are rival destinations where consumers go to find products or content that bypasses Google entirely.

Google has also said that the government is using a flawed argument to target the company because of its popularity. The company believes it is successful because it makes the best search engine. Consumers have a choice to use other search engines, it argues, but choose Google because they find it most helpful.

What does the government need to prove to win its case?

The government has to show that Google has monopoly power over the areas of the economy at issue in the case. The government will try to persuade the judge to take a relatively strict view of what a search engine is and to reject Google’s argument that e-commerce sites such as Amazon and social media services such as TikTok or Instagram are in the same market as Google’s search engine. The wider the market, the easier it is for Google to argue that it does not have monopoly power.

The government also needs to prove that Google’s commercial agreements meaningfully reduced competition among search engines by denying them a chance to forge similar deals with device makers or gain new customers. The Justice Department will also likely have to explain how these business practices directly or indirectly harmed consumers, which has for decades been an important bar for judges considering antitrust cases.

What will happen if Google is found responsible for violating the law?

The trial will have two parts. First, Judge Amit P. Mehta of the U.S. District Court for the District of Columbia will determine if Google violated the law. If it did, then Mehta will consider possible ways to fix the situation.

The Justice Department has not yet said what actions it would ask the court to impose on Google in the event of its victory.

“But it all starts with the court being convinced that Google has misbehaved,” said Bill Baer, a former Justice Department official.

Google’s president of global affairs, Kent Walker, highlighted the challenge of finding an appropriate remedy without forcing other companies that are not being sued, including Apple and Samsung, to change their business practices.

It is possible that the Justice Department will ask that Google be forbidden from signing exclusive distribution agreements to give other search engines more prominence on consumer devices.

What’s the broader context surrounding the trial?

The Justice Department’s case against Google focuses on whether the tech giant engaged in anticompetitive conduct to undermine other search engines, which rival the service that made the company a household name.

In the decades since Microsoft was accused of bundling its products together to prevent other web browsers from gaining traction in the market, the technology industry has drastically changed.

Google has emerged as the largest advertising business on the internet. Along with its success has come intensifying scrutiny from regulators around the world, questioning the company’s business practices and the competitive, political and social consequences of its popular products.

The European Union has been the most aggressive at trying to rein in Google’s power, and this case is the first in which the United States will square off against the company.

c.2023 The New York Times Company

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Posted by on Sep 11 2023. Filed under Business, International, National. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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