When the European Union looked at Google, it hit the company with about $9 billion in fines.
The US government is starting to scrutinize Google, along with the other big tech companies. What will it find when it looks?
We can’t predict the future, but we can tell you what regulators have focused on when they’ve looked at Google in the past, because they’ve looked at Google several times, both in the US and in Europe.
The main focus: Has Google leveraged its power as the world’s dominant search engine to gain unfair advantages in other businesses?
Up till now, American officials have decided that the answer is “no.” Maybe that will change.
Following the 2016 election, there has been a mounting call to regulate or break up or hem in giant tech companies that have, for the most part, had minimal government oversight in the US. Now the Department of Justice and the Federal Trade Commission are reportedly getting ready to look at Alphabet, Google’s parent company, along with Facebook, Amazon, and Apple; the Wall Street Journal says the DOJ has been “laying the groundwork” for an antitrust investigation that would “closely examine Google’s business practices related to its search and other businesses.”
Let’s start with the argument that some of Google’s competitors have consistently made for years without getting any traction in the US: that Google steers search users to results and content that benefit Google instead of giving them the best answer.
That’s what services like Yelp have long maintained: Yelp, which has a site dedicated to its criticism of Google, says that instead of serving up unbiased search results, the company routinely creates specialized displays like a “one box” which contain answers to a search query without requiring users to click through to the site that generated the answer. A related criticism: Google serves up search results that rely on results from Google’s reviews and data instead of using information from competitors like Yelp.
Here’s Yelp CEO Jeremy Stoppelman making the case on Twitter:
Wow Google, congrats on a new low. Consumer searches for Yelp gets “reviews” which are Google Ads. pic.twitter.com/gKSeOOhzWG
— Jeremy Stoppelman (@jeremys) June 20, 2017
Yelp and other critics argue that the problem is getting worse as people increasingly search and browse the web on phones, where screen real estate is at a premium and whatever result Google shows you first is even more important.
And while you theoretically have a choice to use whatever search engine you’d like, the overwhelming majority of people are going to use Google when they search, either because they’re using Google’s Android phones or Apple’s iPhones, which use Google as the default search engine as part of a deal worth billions.
In the US, the FTC did investigate Google over these complaints, and in 2013 it announced that it had found Google wasn’t doing anything wrong. But in 2017, the European Union explored similar charges and levied a $2.7 billion fine. Europe has also concluded that Google forced Android phone makers to install its search engine (resulting in a $5 billion fine) and that it used contracts related to its online ad business to punish rivals (which led to a $1.7 billion fine).
Google has cemented its dominance in online search adverts and shielded itself from competitive pressure by imposing anti-competitive contractual restrictions on third-party websites.
This is illegal under #EUantitrust rules.
Read more → https://t.co/wGnxS9s4Rn pic.twitter.com/ozLrWUHr72
— European Commission (@EU_Commission) March 20, 2019
Google’s critics in the US are hoping the DOJ will follow Europe’s lead and take Google to task for the gigantic clout it wields throughout our digital lives. Separately, House Democrats announced this week that they’re starting their own antitrust probes into Google and other tech giants.
“Right now, today, there are 10 fantastic cases that could be brought against Google,” says Barry Lynn, the executive director of the Open Markets Institute and a longtime antitrust researcher. For instance? “People should be paying a lot of attention to Uber’s potential case against Google in mapping, for instance. It could be about Chrome. It could be Android. It could be their manipulation within YouTube. … Anywhere you look inside Google, you’re going to find concentration of power.”
But “concentration of power,” or even monopolies, isn’t illegal in the US; antitrust regulators have looked for cases where companies abused that power. And over the years, both regulators and courts have become less likely to find fault with companies. Which is why there is well-earned skepticism over whether the DOJ — which may also look at Apple — or the FTC, which is already negotiating with Facebook over privacy violations, and may also look at Amazon — will end up levying material fines, or forcing any of these tech companies to make material changes, like divesting giant acquisitions they’ve made.
Charlotte Spaulding Slaiman, who focuses on competition policy for the internet watchdog Public Knowledge, thinks a more useful way to handle the “they’re too big” argument against Google and other tech giants isn’t to focus on punitive measures but on legislation or agreements meant to create more competition, which often dries up when internet giants get to a certain size.
It’s doubtful these investigations will produce meaningful results anytime soon. It’s very difficult to imagine Congress pushing serious legislation through America’s political gridlock (and that assumes politicians want to expend real capital regulating tech giants when they have other, potentially more resonant issues they could campaign on). And regulatory probes are by their nature a lengthy affair.
But even if you fast-forward to a conclusion, it’s harder to imagine what kind of meaningful reform regulators could impose. The $9 billion in fines plus penalties the EU has levied on Google don’t appear to have made an impact on its core search and advertising businesses.
On the other hand, Microsoft veterans will tell you their epic antitrust fight with the US government, which began with an antitrust probe 1992 and ended with a settlement a decade later, had a profound effect on the company, even though Microsoft wasn’t forced to break up or undergo any other major concessions. Instead, they talk about paralysis and distraction, which they now say made the world’s most powerful company miss the opportunity that internet search was about to create, which spawned … Google. Google will work hard to find ways to not get itself mired in a similar fight.
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