The Anticompetitive Nature of Google
Google was brought to court as early as 2017 by the European Commission for anti-competitive behaviour. Accused of using its search to give advantage to its own shopping comparison service over others, the organisation unsuccessfully appealed the case and had to pay 2.4 billion euros in fines. In 2018, Google was hit with another lawsuit regarding anti-competitive behaviour with relation to android devices, facing a record €4.3 billion fine. Finally, in 2019 the organisation faced a third fine for stifling competition in online advertising, culminating in a €1.7 billion fine.
Although the legal standards in Europe make it easier to prove market dominance than those in the United States, Google has similarly been charged with anti-competitive behaviour and ‘anti-trust evils’ multiple times over the last five years. In 2020, three separate lawsuits were pursued against Google, the second two only a few days apart from one another. Now, just three years later a fourth case is being battled.
Although not all of the aforementioned lawsuits occurred under the Biden administration, the latest 2023 case slots neatly into the context of the Biden administration’s toughened stance on antitrust. In 2021 Biden created a sweeping order which aimed to reshape antitrust laws in an aim to revitalise competition. Fear of the power of big tech within the digital markets has increased scrutiny on monopolies and killer acquisitions- particularly by dominant companies. It was recently suggested that Meta be blocked from acquiring a VR startup by the Federal Trade Commission due to thoughts it might disrupt competition.
The first case was filed in October 2020 by the United States Department of Justice. The case claimed that Google was monopolising search and search advertising. In essence, Google placed their own ads and comparative shopping actions at the top of the search results. The case also mentioned the exclusionary agreements Google entered into which prevented competition. One example given in the case was the agreement for Google to be the default search engine on all Apple devices. This case was filed under the Trump administration and is expected to go to court in September 2023.
The second case, led by Colorado and Nebraska, meant a collection of states filed an antitrust lawsuit in December of 2020- just shortly after the first case. This case pursued roughly the same argument as the former, but added that Google’s actions discriminated against the vertical search business. In essence, both cases complained that Google’s monopoly took away the choice of the consumer by controlling the options that were obviously available. Both the European Commission (EC) and the US Department of Justice (DOJ) expressed qualms that this level of control over the digital market would harm innovation and originality. Studies from the EC case in 2017 showed that page one of search results received 95% of all clicks, while page two immediately drops down to only 1% of all clicks. Google increasing its traffic using a search engine monopoly would therefore be at massive cost to other services. The second US case similarly expressed that Google took advantage of the reliance of certain ‘vertical providers’ upon Google, ultimately damaging their ability to acquire consumers.
The third case was filed a mere two days after the former. This lawsuit was pursued by nine Republican states, led by Texas and it focused more upon Google’s monopoly of search advertising. According to several studies, Google owns over 90% of many parts of the digital advertising supply chain- an aspect of control which the organisation abuses. The Texas case also contained allegations regarding an illicit deal between Google and Facebook which gave Google preferential treatment for its ads. The Texas lawsuit was dismissed by federal court, and was recently called ‘unfounded’ in a comment by Dan Taylor (Google Vice President of Global Ads). In that same comment by Mr Taylor, he responded to the 2023 case, stating ‘the Government shouldn’t pick winners and losers in a competitive industry.’
The January 2023 case states that Google has tried to take control of digital advertising, citing internal Google documents where an advertising executive at Google had questioned the legality of the procedure. The case analogies Google’s search advertising power- stating the equivalent in the banking world would be if Goldman or Citibank owned the New York Stock Exchange. Prosecutors have asked the federal court to suggest Google initiates a break between its advertising segment and the rest of the company. The lawsuit has had a mixed reception because Google helps advertisers. However, the many iterations of antitrust lawsuits brought against Google might imply that there is some substance to the claims. Google on the other hand, contrary to the findings of the DoJ, claims that this case would reverse ‘years of innovation’. Antitrust and competition plays an important role in preserving originality and innovation- helping the digital market by stopping any one company from gaining an unequal amount of exposure. It seems strange, therefore, that a company serially preventing other organisations from gaining business would suggest that the DOJ was reversing innovation.