The Federal Government Just Took a Big Step Toward Regulating Big Tech
The battle between Big Tech and the federal government is starting to get real.
The Justice Department on Tuesday sued Google over its dominance of the online search and search advertising markets, alleging that the $1 trillion Big Tech behemoth has used a variety of anticompetitive practices to keep its foot on the neck of the competition. The lawsuit is the largest antitrust case against a tech company since the Justice Department sued Microsoft in 1998, and could be a sign of things to come as Washington, D.C., continues to hold a magnifying glass up to Silicon Valley.
Among the maybe-not-quite-so-legal practices outlined in the 57-page complaint are the “exclusionary agreements” Google has struck with manufacturers like Apple to ensure Google is the default search engine on all of their products. The complaint estimates that these agreements have given Google control over around 80 percent of the online search engine market. “For many years, Google has used anticompetitive tactics to maintain and extend its monopolies in the markets for general search services, search advertising and general search text advertising — the cornerstones of its empire,” the complaint reads.
In a blog post, Google’s chief legal officer Kent Walker called the lawsuit “deeply flawed,” arguing that Google paying Apple to make itself the default search engine is “just like a cereal brand [paying] a supermarket to stock its products at the end of a row or on a shelf at eye level.”
Regardless of the extent to which Google’s legal team leans on the Cereal Shelf Defense, it’s sure to show up in court with nothing short of a rolodex of other analogies and arguments that may or may not be related to supermarkets, but that will almost certainly result in a years-long legal dogfight with the Justice Department.
“Absent a court order, Google will continue executing its anticompetitive strategy, crippling the competitive process, reducing consumer choice, and stifling innovation,” the complaint reads. “For the sake of American consumers, advertisers, and all companies now reliant on the internet economy, the time has come to stop Google’s anticompetitive conduct and restore competition.”
It’s unclear what exactly the government feels should be done to prevent Google from wielding so much control of the market, only that it needs to be something. On a conference call with reporters, Deputy Attorney General Jeffrey Rosen said “nothing is off the table,” including a potential “break up” of Google, something that has been advocated for by politicians like Sen. Elizabeth Warren (D-Mass.). “Aren’t we all glad that now we have the option of using Google instead of being stuck with Bing?” she wrote last March, referring to how the government’s antitrust case against Microsoft cleared the way for companies like Google to flourish.
The complaint filed Tuesday comes three months after a landmark congressional hearing in which the CEOs of Google, Facebook, Amazon, and Apple testified before the House Judiciary Antitrust Subcommittee. Google was grilled particularly hard about the company’s gargantuan ad share, its data-collection practices, and how it allegedly undercuts other online businesses by leveraging its dominant position to steal their content.
The subcommittee’s chairman, David Cicilline (D-R.I.), didn’t mince words in his first question to Google CEO Sundar Pichai. “Why does Google steal content from honest businesses?” he asked.
Pichai said he didn’t agree with the characterization and that, when you think about it, Google is actually good for small businesses. Pichai then began to launch into a story about “Kettle Kings,” a kettle bell manufacturer in Texas, but was cut off by Cicilline, who said that over the course of the committee’s investigation they’d heard numerous reports that Google stole content from small businesses. “Your testimony that that doesn’t happen isn’t consistent with what we’ve learned,” he said.
During a House antitrust hearing, Representative David Cicilline asked Google CEO Sundar Pichai about his company allegedly stealing content from small businesses https://t.co/TOyBHKFOkU pic.twitter.com/eHnZYM4OtC
— Reuters Business (@ReutersBiz) July 29, 2020
Cicilline had a few more blistering words for Google during his closing statement. “As Google became the gateway to the internet, it began to abuse its power,” he said. “It used its surveillance over web traffic to begin to identify competitive threats and crush them. It has dampened innovation and new business growth, and it has dramatically increased the price of accessing users on the internet, virtually ensuring that any business that wants to be found on the web must pay Google a tax.”
Cicilline indicated on Tuesday that he was pleased with the lawsuit, which could set a precedent for future litigation and, ultimately, regulatory action against other tech giants who have been accused of monopolistic practices. “Three weeks ago, I released a report outlining steps Google took to maintain and expand its monopoly power through anti-competitive actions,” Cicilline wrote on Twitter. “Today, DOJ finally brought an antitrust lawsuit against Google. This step is long overdue. It is time to restore competition online.
Three weeks ago, I released a report outlining steps Google took to maintain and expand its monopoly power through anti-competitive actions.
Today, DOJ finally brought an antitrust lawsuit against Google. This step is long overdue. It is time to restore competition online.
— David Cicilline (@davidcicilline) October 20, 2020
Pichai is expected to appear before Congress yet again on October 28th, along with Mark Zuckerberg of Facebook and Jack Dorsey of Twitter. The three CEOs have been called before the Senate Commerce Committee to discuss Section 230, a legal statute that insulates internet companies from liability over content posted by users, and which Trump whines about whenever he feels he has been wronged by social media platforms.
Antitrust issues will also be on the table.