As the Justice Department continues with its antitrust investigation on Google, focusing on the search giants’ dominance in the online advertising industry, the European counterpart has compelled some changes that will set regulatory precedent.
Phone users in Europe have, for the first time in many years, been presented with a menu option that allows them to choose other search companies as their default search engines. The choice menu has become a feature of new Android phones and devices running on Google software.
In 2018, the European authorities ruled that Google abused its dominance in smartphone software and gave itself undue advantage over competitors. Based on the ruling, the search giant is trying to make amends by developing new devices with new features that allow users to use search choices other than Google. But that has brewed more trouble for the Silicon giants.
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The attention of the United States Justice Department has been drawn to it, and it appears ready to get Google to do the same in the US. The Justice Department is reportedly preparing a big antitrust battle with Google this summer. It is said to be one of the biggest monopoly actions taken by the United States in years.
Google has been a company of interest in Europe and the United States over the years. Since last year, the Justice Department and state attorneys generals have been investigating the company’s web practices, especially on web search and ads. Google has a huge influence when it comes to the internet. It controls about 90% of online searches and receives one-third of every dollar spent on online ads according to New York Times.
The call to break Google up over its dominance as it tends to muzzle competition has been voluminous for years, and it appears the European governments have opened a chance for the Department of Justice (DOJ) to pursue a legal challenge against the company’s influence.
But experts believe that following Europe’s line of action will do Google no harm.
“It doesn’t seem like too much of an imposition on Google’s business model, while opening the floodgates to competition a bit. The fact that Europe has gone first gives the D.O.J a benefit to see how it’s working,” said Michael Carrier, a law professor at Rutgers University Law School.
In 2018, Google was fined a record €4.34 billion with a demand that it stops its anti-competitive practices. Though the company is appealing the ruling, altering power of default to allow other companies on devices using its operating system seems like a win for Europe.
Google’s search accounts for almost 100 percent of Android smartphones and the company is paying Apple billions of dollars to be the default search choice on iphones.
In 2001, the US government and Microsoft ended their long fought antitrust battle on the decision requiring the company to alter some of its default software to allow users to switch to applications of their choice. That included allowing users of the Microsoft Windows to use browsers other than explorer.
In 2006, Google told antitrust officials that Microsoft should give Internet Explorer users a choice of another default search engine when starting the browser. And that set a precedent that has come to hunt Google right now.
But it is not the first time Google is getting caught in the controversy of monopoly. In 2017, the company and the Russian Federal Antimonopoly Service agreed, as part of settlement, that it will update its chrome browser in Android phones so that users can have choice of using other search engines as default.
Though Google has agreed to alter its default software to accommodate other companies, its terms and conditions have become a challenge that many have found unacceptable. The internet giant is limiting the number of non-Google search engines to three in any country. It is also forcing interested companies to participate in quarterly auctions to decide how much they will pay to be featured.
Gabriel Weinberg, chief executive of DuckDuckGo, said even though he sees the preference menu as a good way to increase competition, Google’s tactic is unfair to small businesses and consumers: “pay-to-play auction is bad consumers (and competition), Google knows how to work the system and consumers lose in the end,” he said.
For now, the big players in the game appear not interested in the auction, and that leaves Google and small companies like DuckDuckGo in the play. And it’s not clear if European governments are going to do something about the pattern the company has employed to administer the choice menu.