Justice Department Hits Google With Antitrust Lawsuit

[DanSkippy]

Suit follows lengthy investigation into company’s dominance of search traffic and effect on competition.​

The wide-ranging lawsuit included details on alleged deliberations within Google aimed at avoiding antitrust scrutiny.

The lawsuit in particular targeted arrangements under which Google’s search application is preloaded, and can’t be deleted, on mobile phones running its popular Android operating system.

Analysts estimate that it pays Apple alone about $10 billion a year, another deal the government cited as having suppressed competition.

Kent Walker, Google’s chief legal officer, said that, if successful, the lawsuit would result in higher prices for consumers because Google would have to raise the cost of its mobile software and hardware.

Source: https://www.wsj.com/articles/justic...ted-antitrust-suit-against-google-11603195203

 

[secretagentdad]

U can’t ban a company from doing marketing deals cuz their product is way more sticky than the competition and ur mad they have a huge market share.

I mean yeah their biz model is a little obnoxious so what. Branding was never particularly good for the consumer anyway.

I predict this just turns into more regulatory capture and they become the first 5 trillion dollar company.

 

[bernard]

Can they be forced to sell off Youtube?

 

[jstover77]

lol...Have they ever used Bing? Serious though, the GOP/POTUS has been going on for years about how they feel Google sensors Right Wing news stories and favors the left. Retribution? Makes you go hmmm..

 

[MrMedia]

The whole of the EU tried to sue Google and they practically told them to GTFO.

Pay the fine and move on.

 

[harrytwatter]

The whole of the EU tried to sue Google and they practically told them to GTFO.

Pay the fine and move on.

Yeah it's a poorly disguised shake down. U.S government fucking loves monopolies; they're campaigns are directly financed by many of them. I feel like closing corporate tax loopholes would be a better use of their time but that would require actually legislating and most of these corrupt fucks seem to fear doing that more than anything else.

 

[DanSkippy]

Can they be forced to sell off Youtube?

As a subsidiary of Google, LLC this could happen, but for now the focus of the antitrust lawsuit seems to be on Google's status as a default search engine.

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Minor Update
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TL/DR

Google's status as a default search engine is one of the central facets of the DOJ's complaint, which alleges that Google spends billions on agreements with web browsers, wireless carriers and smartphone makers to ensure that its search stays on top.

One of Google's biggest strengths is the sheer breadth of data it has amassed, which is difficult to replicate. Another reason Google is unlikely to cede its command over online search is the lack of a viable alternative and the challenge of building one.

The US government might potentially follow Europe's lead and mandate that Google give users the ability to choose their preferred search engines, as the company did on European Android devices.

European regulators have been at the forefront of trying to rein in Google, imposing antitrust fines totaling more than $9 billion and forcing it to allow Android users to pick their preferred browser and search engine. That doesn't appear to have worked — Google still had a roughly 93% share of Europe's search market as of September 2020, according to StatCounter.

Ultimately, it will likely take far more to bring down Google than any other company in history.

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Deposing Google or: Why It Is Hard to Displace This Search Gigant​

Google's status as a default search engine is one of the central facets of the DOJ's complaint, which alleges that Google spends billions on agreements with web browsers, wireless carriers and smartphone makers to ensure that its search stays on top.

One of Google's biggest strengths is the sheer breadth of data it has amassed, which is difficult to replicate. Another reason Google is unlikely to cede its command over online search is the lack of a viable alternative and the challenge of building one.

"Google's search index contains hundreds of billions of webpages and is well over 100,000,000 gigabytes in size," the DOJ said in its lawsuit. "Developing a general search index of this scale, as well as viable search algorithms, would require an upfront investment of billions of dollars."

The last company to come close was Microsoft, which had the resources to comfortably compete with Google. Bing is currently in second place behind Google, but with only roughly 3% of the global search engine market, according to StatCounter.

The US government might potentially follow Europe's lead and mandate that Google give users the ability to choose their preferred search engines, as the company did on European Android devices.

European regulators have been at the forefront of trying to rein in Google, imposing antitrust fines totaling more than $9 billion and forcing it to allow Android users to pick their preferred browser and search engine. That doesn't appear to have worked — Google still had a roughly 93% share of Europe's search market as of September 2020, according to StatCounter.

The biggest problem is that people are so conditioned to use Google that most users wouldn't bother picking anything else even when given a choice.

Sally Hubbard, director of enforcement strategy at the Open Markets Institute said "Google is too powerful. Fines don't affect it.[The EU regulations have] basically proven they can't be regulated with behavioral remedies." Another reason Google is unlikely to cede its command over online search is the lack of a viable alternative and the challenge of building one.

Charlotte Slaiman, director of competition policy at tech advocacy group Public Knowledge said "The data that Google has been able to build out over these many years, from click and query data, from users doing searches and clicking, that's a big part of what has allowed their predictions of what users will click on to be so accurate. So I think that is also something that might need to be targeted. The data that Google has been able to build out over these many years, from click and query data, from users doing searches and clicking, that's a big part of what has allowed their predictions of what users will click on to be so accurate."

One suggestion is to try to diminish Google's role in finding services for which there are strong competitors — think Yelp or Expedia. Slaiman says US regulators could put in place measures that give users more direct access to those specialized services while pulling back Google's influence in reaching them.

"People might continue to go to Google for some searches that Google does a great job of, but plenty of these specialized search engines provide better quality in the area that they specialize in,' she said. "If I'm looking for a plumber, I might not want the plumber that has received the most clicks, and Google is not doing that level of quality control that some of these specialized search providers are offering."

Ultimately, it will likely take far more to bring down Google than any other company in history.

-- CNN's Rishi Iyengar reporting

 

[bernard]

Apple can do it and they, like Google, have serious market share already with their phones, tablets and macs.

As for the Android thing, sure, but it's minor, haven't changed a thing in terms of coverage. Europeans use Google more than Americans do.

What could make a difference is the Microsoft model. Move Youtube out from under Alphabet, move Google Flights etc out.

That's what you want.

You want the core business, search+ads, to remain as Google, and then you want the other companies to compete as stand alone business without being able to leech on the big Google engine.

 

[DanSkippy]

Here is some information that I managed to gather, and perhaps there's someone more knowledgeable on BuSo willing to explain this to the non-American members.

Understanding the economics of the creation and maintenance of the Standard Oil refining monopoly is important both as a matter of industrial organization and for current antitrust law.[1]

In the most prominent of later monopolization cases, United States vs United Steel Corporation, the Court attempted to distinguish monopolies created by what might be regarded as exclusionary practices versus those created on the merits; exonerating the merger-to-monopoly in the steel industry in the U.S.[2]

Given this modern standard, it is important to understand whether the creation of Google's alleged monopoly derived from the business acumen of its principal founders, Sergey Brin and Larry Page, or from other competitive advantages, versus from ulterior practices antithetical to competition.[3]

To safeguard the incentive to innovate, the possession of monopoly power will not be found unlawful unless it is accompanied by an element of anticompetitive conduct.[4]

1. https://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=5937&context=fss_papers
2. https://scholarship.law.ufl.edu/cgi/viewcontent.cgi?article=1269&context=facultypub
3. https://www.justice.gov/sites/default/files/atr/legacy/2009/05/11/236681.pdf
4. https://www.justice.gov/atr/competi...conduct-under-section-2-sherman-act-chapter-1

 

[DanSkippy]

Initial Observations on The Google Antitrust Lawsuit​

Since last year, a bipartisan coalition of state law enforcement officials had been investigating Google for antitrust violations and coordinating with Justice.

On Tuesday, October 20, 2020, the Department of Justice and eleven Republican state attorneys general filed a long-anticipated antitrust lawsuit against Google, alleging that the tech giant has unlawfully monopolized the markets for general internet search services and search advertising.[1] Alphabet Inc’s Google must respond to the U.S. Justice Department’s antitrust lawsuit by December 19, 2020.[2]

The complaint follows an investigation of “Big Tech” platforms that the Department of Justice launched last summer and represents the Department’s most significant antitrust case since the Microsoft litigation that began over twenty years ago.

The Department of Justice claims that increased competition resulting from the Microsoft case paved the way for Google to grow from a small startup into the «Internet behemoth» it is today, leading Google to deploy the same anticompetitive tactics it opposed decades ago.

The lawsuit marks the first time the federal government has sued Google in the United States.

That same day SVP, Global Affairs at Google, Kent Walker pointed to its blog post responding to the DOJ complaint and calling it “deeply flawed.” Walker argued that “people use Google because they choose to, not because they’re forced to, or because they cannot find alternatives,” and concluded that Google “will remain absolutely focused on delivering the free services that help Americans every day.” [3]

On Thursday, October 22, 2020, Google executives argued that the government lacks evidence of any harm to consumers at Google’s hands, invoking statements from government officials who investigated the company in the past and said they found no evidence of anticompetitive conduct.[4]

Monopolization Doctrine: The Basics​

An antitrust plaintiff typically establishes that a defendant has monopoly power by showing that it has a dominant market share that is likely to be durable. In addition to establishing that a defendant has a dominant market share, monopolization plaintiffs typically must prove that the defendant’s dominant position is likely to be durable.

Plaintiffs usually try to satisfy this burden by showing that the defendant is insulated from potential competitors by significant entry barriers. First, a Section 2 plaintiff must make a prima facie case that a defendant’s conduct had anticompetitive effects. If the defendant cannot adduce such an argument, the plaintiff prevails.

However, if the defendant presents a procompetitive justification for its behavior, the burden shifts back to the plaintiff to show that the anticompetitive challenged conduct’s anticompetitive harms outweigh its procompetitive benefits.

Monopoly: Power​

The Department of Justice further contends that Google’s dominance is likely to be durable despite the significant entry barriers surrounding these markets. Because a search engine’s accuracy improves as it obtains more data from more searches, the Department of Justice argues that Google derives crucial benefits from its enormous scale. While 60% of all “general search” today comes to Google via its partners, the DOJ said, 20% of search takes place on Google properties like Chrome and Google.

In addition to its deal with Apple, Google has allegedly entered into such revenue-sharing agreements with every “significant” non-Google browser other than those distributed by Microsoft. The Department of Justice contends that because of these agreements, 85 percent of all browser usage in the United States occurs on Google’s Chrome browser or a browser covered by a revenue-sharing agreement with Google.[5]

Mozilla CLO Amy said, “small and independent companies such as Mozilla thrive by innovating, disrupting and providing users with industry-leading features and services in areas like search,” and argued that “the ultimate outcomes of an antitrust lawsuit should not cause collateral damage to the very organizations – like Mozilla – best positioned to drive competition and protect the interests of consumers on the web.”[6]

DuckDuckGo CEO Gabriel Weinberg said, “his company has kept much of its focus on privacy concerns that are core to its business ethos. But,” he said, “the company has been more than willing to engage with regulators when asked.” In a previously released blog post, Weinberg wrote that “right now there is no global device search setting on Android and you need to either make DuckDuckGo your default browser or make DuckDuckGo your default search engine in your preferred browser.”[7]

Google CEO Sundar Pichai argued that “Google competes with other online sources of information, including news websites, social media platforms, and specialized search engines like Amazon and Expedia.”[8]

In response, the Department of Justice contends that these other services are not “reasonably interchangeable” with general search engines because few consumers would regard them as suitable substitutes for most types of search queries.

Online booking sites are the first to admit that Google’s preferential ranking of its search results when consumers are looking into travel options has hurt their ability to drive traffic.

Expedia CEO Peter Kern said, “We have no ax to grind against Google, except that we don’t think the marketplace is equitable.”[9]

TripAdvisor CEO Steven Kaufer went so far as to say that “TripAdvisor would be in a different position if it weren’t for Google.” [10]

Monopoly: Exclusionary Conduct​

The Department of Justice argues that default search engines are so “sticky” that default status gives Google “de facto exclusivity” at the key distribution channels, reaching an almost similar conclusion as the 2014 EU Antitrust Commission[11]

This is a factual claim that Google will probably deny. Google’s “pre-installation” agreements are a form of “tying” arrangement in which Google has conditioned certain products’ availability on the pre-installation of Google Search.

The Department of Justice argues that this “tie” reinforces the dominance of Google Search because many device manufacturers want access to the Play store, the other Google apps, and the relevant APIs. Google will likely argue that would harm consumers, who benefit from ready-to-use default features on their devices and browsers.

Finally, if the case results in Google’s counter-parties entering into new revenue-sharing agreements with other search engines, it is unclear how that outcome benefits consumers.

Conclusion​

The Google litigation is enormously significant and likely to affect the other three “Big Tech” firms—Apple, Amazon, and Facebook—continuing antitrust investigations. The Department of Justice’s lawsuit may also not be the only antitrust action against Google. A separate group of state attorneys general is reportedly preparing a broader suite targeting Google’s ad-technology platform.[12]

Sources:
1: https://crsreports.congress.gov/product/pdf/LSB/LSB10544
2: https://www.reuters.com/article/us-...u-s-antitrust-lawsuit-by-dec-19-idINKBN2782EQ
3: https://blog.google/outreach-initiatives/public-policy/response-doj
4: https://www.rollcall.com/2020/10/21/the-google-antitrust-lawsuit-five-key-takeaways/
5: https://finance.yahoo.com/news/why-...-regulators-to-break-up-google-220514440.html
6: https://blog.mozilla.org/blog/2020/10/20/mozilla-reaction-to-u-s-v-google/
7: https://spreadprivacy.com/one-click-away/
8: https://crsreports.congress.gov/product/pdf/LSB/LSB10544
9: https://www.geekwire.com/2020/exped...pleased-see-government-finally-taking-action/
10: https://www.cnbc.com/2020/10/23/tri...kaufer-cheers-doj-lawsuit-against-google.html
11: https://ec.europa.eu/commission/presscorner/detail/en/MEMO_14_87
12: https://www.bostonherald.com/2019/09/06/ny-attorney-general-announces-facebook-antitrust-probe/