What comes next: Google abused its monopoly power

What comes next: Google abused its monopoly power

I wrote recently about the landmark antitrust decision in which Google was found to be a monopolist who abused its power regarding general search and text advertising. The U.S. Department of Justice (DOJ) is asking the court to impose sanctions against Google to ensure that Google can no longer monopolize the search engine market.

More specifically, you may recall that the judge concluded the following:

  • Google had a monopoly on general search services and general search text advertising.
  • Google engaged in exclusionary conduct, blocking its rivals from the most effective channels of search distribution, namely out-of-the-box default search settings.
  • Google’s exclusive distribution contracts significantly contributed to maintaining a Google monopoly.
  • Google failed to preserve its employees’ chat messages

However, at the time of the decision, the court declined to impose any sanctions on Google. We all speculated about what those penalties would be: could it be fines? A requirement to implement a “choice screen” to inform users about other search options? Or perhaps it could be what many have feared—a forced break-up of the company.

Well, we have just learned further details about what the DOJ is seeking. It has been reported that the following is being proposed:

  • Putting an end to exclusive agreements that Google has with companies like Apple and Samsung.
  • Prohibiting certain kinds of data tracking.
  • Imposing “behavioural and structural” remedies that would ensure that Google could not use its Chrome browser or Android phone in a way that advantages its search engine

Although the phrase “behavioural and structural” remedies were used and no details were given, some have interpreted this to mean asking a federal judge to force Google to sell off parts of its business in what would be a historic breakup.

Shortly thereafter, Google responded in a post titled, “DOJ’s radical and sweeping proposals risk hurting consumers, businesses, and developers.” Lee-Anne Mulholland, Vice President of Regulatory Affairs, noted that Government overreach in a fast-moving industry may have negative unintended consequences for American innovation and America’s consumers.

Essentially, Google asserted the following:

  • Forcing Google to share search queries, clicks, and results with competitors risks consumers’ privacy and security.
  • Hampering Google’s AI tools risks holding back American innovation at a critical moment.
  • Splitting off Chrome or Android would break them — and many other things since this would change their business models, raise the cost of devices, and undermine Android and Google Play.
  • Changes to the online advertising market would make online ads less valuable for publishers and merchants and less useful for consumers.
  • Unreasonable restrictions on how Google promotes its search engine would create friction for consumers and harm businesses.

Google concluded its message by stressing that it looked forward to making its arguments in court.

We might need to wait for a resolution in this case for some time. Some believe the saga is far from over, given that there will be appeals…

competition
consumers
DOJ
Google
Internal Controls
Monopolist
Monopoly
risk management
Sanctions
search engine
Text advertising
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