On Tuesday, The United States Department of Justice sued Google, accusing it to have abused its power in a fashion that harmed its competitors as well as the customers and users. According to the long-expected lawsuit, 11 US states have joined hands with the DoJ charged Google for maintaining a monopoly in general search services and search advertisements through illegal means.
Deputy Attorney General of the DoJ, Jeffery A. Rosen stated that the business practices maintained by Google have given shape to massive concentrations of economic power within a few companies, like Google itself. As of now, the focus is on Google, because it is believed to be the gateway to the internet as well as a search advertising goliath.
What exactly did the lawsuit claim? Well, the statement concluded that Google harms its competition by paying other companies millions of dollars to hierarchize its search engine rituals. Furthermore, it restricts other companies by pushing its search tools on top whenever consumers browse the internet.
“Google achieved some success in its early years, and no one begrudges that, but, as the antitrust complaint filed today explains, it has maintained its monopoly power through exclusionary practices that harm competition. So the Justice Department has determined that an antitrust response is necessary to benefit consumers.” – The statement reads.
This battle is going to last years, to say the least, as it’s complicated with both parties having immense control and power in the world in general. Google has vehemently denied the accusations and claimed that the case is entirely flawed.
Source: South China Morning Post
We’ve always known that most Google practices are questionable, so why exactly has the DoJ made the allegations now? Well, do you recall that time when Mark Zuckerberg, Jeff Bezos, Tim Cook, and Sundar Pichai were summoned by the administration? Well, the US House of Representatives panel submitted an investigation report of bipartisan involving Amazon, Apple, Google, and Facebook. These companies have been on the radar in many countries and have gained the reputation of destroying their competitors by either buying the rivals or forcing the vendors to stop working with them.
Also, as per the DoJ lawsuit, Google has strange contracts with other major companies. For instance, Google would remunerate Apple approximately $8 to $12 billion a year with the agreement to make Google search the default on Apple devices. In addition, Pichai and Cook met to brainstorm ways to drive revenue by continuing strategic business.
According to aconversation between employees of Google and Apple, they intend to work as if they’re part of the same company.
Do you know that, last year, half of Google’s traffic came from Apple’s devices?
The hearing date has not been announced as of yet, but the judge who’ll handle this case has been selected. Apparently, US district judge, Amit Mehta is down for the job – he also has experience in a similar case and was named to the court by Barack Obama. Usually, anti-trust cases are not commonly found, but Amit had previously ruled to block the merger between two food distributors.
It’s essential to realize that this case will play a fundamental role in the coming few years. First of all, it is the biggest antitrust case that has taken place in the last couple of decades. It can be compared to the lawsuit that was filed against Microsoft in 1998, and to a certain extent to the case against AT&T in 1974, which obviously ended up breaking the Bell system.
People have highlighted this case’s similarities with the Microsoft cases for a reason: Like, if you remember, Microsoft was accused of shutting down channels for Netscape, and now look at Google, it’s following the same path. Silicon Valley isn’t really the only place that knows cloning of successful products!
When Microsoft got sued, other firms took over and Google was one of them. You can say that, if Google goes down, other tech firms like Bing and DuckDuckGo can take the lead. They’ve been in the game long enough to understand the dynamics. Therefore, if the prosecutors find anything monumental against Google, these companies are likely to be the beneficiaries.
Now, here’s the real question: How can the US Department of Justice prove that Google monopolizes and abuses its power? How can they prove with evidence that Google is not part of a healthy race but it’s gone far and beyond to restrict its competitors by forming alliances with other major companies like Apple?
Some experts predict that Google would likely make a case for itself by elaborating self-importance. For example, it would bite tooth and nail to showcase that the consumers prefer it over its rivals and that no one should undermine the company’s power by suggesting that its market is considerably narrow.
In defense, several experts have questioned why – why does Google have such a large share in the market?
Of course, Ken Walker, the Chief Legal Officer of Google has argued that “People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives.”
In addition, Google said that it does have a strong competitor in the market in the shape of Amazon. It is being speculated that Google will likely choose a global network of lawyers and lobbyist to fight this legal battle.
The Democratic lawmakers have also questioned Google and accused the company of monopoly over online search and advertisements.
Recent changes have compelled us to question the long term and short term impact in case the administration changes:
Source: New York Post
Some people believe that the federal government is not going to back down at any cost. On the contrary, if Biden wins against Trump in the elections, he will most likely hold a stronger opposition.
The reason is simple: Currently, there are too many points of view and unnecessary baggage. With a new administration, everything will begin with a clean slate, thereby all of the actions will orchestrate far more efficiently.
However, change will not occur overnight.
“The lawsuit will likely take years to be argued in court, and at this stage, the DoJ is not proposing any extreme remedial action, such as breaking apart the company. With over $120bn of cash, Alphabet is financially able to fight the allegations and pay fines that might result from any government actions.” – said Dave Heger, who is an analyst at a financial services firm.