The countdown to the United States’ Department of Justice’s decision to file a lawsuit against Google, over anti-competition practices was followed by a series of antitrust investigations involving US big tech companies.
Google, Facebook, Apple, Microsoft and Amazon are all in the list. As the investigations uncover evidence of antitrust and anti-competition practices, the US regulatory agencies wield a sledgehammer toward the bottom-line of the inquiries – a possible breakup of the big techs.
While there seems to have been a break from the hook for others now, Google finds itself at the grip of the US government’s determination to make a statement.
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Early last week, the Justice Department announced it has filed a civil antitrust lawsuit in the US District of Columbia to stop Google from unlawfully maintaining monopolies through anticompetitive harms.
“Today, millions of Americans rely on the Internet and online platforms for their daily lives. Competition in this industry is vitally important, which is why today’s challenge against Google – the gatekeeper of the Internet – for violating antitrust laws is a monumental case both for the Department of Justice and for the American people,” Attorney General William Bar said in a statement after DOJ filed the suit against Google.
In the so many fronts where the Silicon tech giant was found wanting for monopolistic practices, the DOJ pointed out Google’s move to muzzle competitors by entering into a series of exclusionary agreements that collectively lock up the primary avenues which users access search engines.
Google entered into long-term agreements with Apple to be the default – and de facto exclusive – general search engine on Apple’s popular Safari browser and other Apple’s search tools. It was a deal that started between the two companies as far back as 2005, and has over the years defied the companies’ differences to grow bigger into a multibillion dollar deal.
Google became the default search engine in virtually all Apple devices that Google’s former chief executive, Eric Schmidt joked that the two companies could be merged and called “AppleGoo”.
However, the Apple-Google relationship went sour when Google quietly started developing the Android operating system for non-Apple devices, a rivalry that Apple didn’t see coming. It irked Steve Job so much that he vowed to destroy Android. “I’m going to destroy Android. I will spend my last dying breath if I need to,” he was said to have told his biographer Walter Isaacson.
But then the partnership between the companies on iphones remained intact and untouched by the outburst. It was such a lucrative deal for the Silicon giants to blow up. Though there were some changes, Apple introduced Siri a year later and used Microsoft’s Bing to underpin the virtual assistant instead of Google, it didn’t hurt their relationship. In 2017, Apple announced that Google is helping Siri to answer questions.
Today, the deal puts estimated $8 billion to $12 billion to Apple’s coffers yearly, accounting for 14 to 21 percent of the company’s annual profit. And it is probably the biggest single payment that Google makes to anyone. But on the other hand, it gives the search giant 92 percent dominance over web searches and places the highest sum of ad revenue into its hand.
So it is a marriage the tech giants don’t want to end, even though it is flourishing at the expense of competitors like DuckDuckGo and Bing, who are left reeling on leftovers of the Google and Apple partnership.
The Justice Department said nearly half of Google’s search traffic comes from Apple devices, and by restricting competition in search, Google’s conduct has harmed consumers by reducing the quality of search, lessening choice in search, and impeding innovation.
“By suppressing competition in advertising, Google has the power to charge advertisers more than it could in a competitive market and to reduce the quality of the services it provides them,” the DOJ said in a statement.
Google has argued that the Justice Department is painting an incomplete picture; that its partnership with Apple is more like Coca-Cola paying a supermarket for prominent shelf space. The company said it dominates web search because consumers prefer it, not because it is buying it from Apple.
The anti-competition suit, although considered long overdue, sends a warning message to the other companies that have been under the radar. Facebook may likely be the next on line as the social media company has been recently engulfed in allegations of monopolistic engagements, including buying up potential competitors, cloning and copying innovations to stifle smaller companies.
After the July’s antitrust hearing that saw the CEOs from Amazon, Apple, Microsoft and Facebook testified alongside Google’s CEO Sundar Pichai, the companies have upped their lobbying game. They have spent a combined total of $14.7 million lobbying, with each of them, apart from Microsoft, increasing his spending power.
The subcommittee found that they each hold monopoly power and made recommendations to reform antitrust laws, and did not rule out the idea of breaking them up.
It is not clear what the consequence will be for Google if it loses, what is clear is that a lot will change for the internet search giant.