The last time it was filed on Microsoft 22 years ago, it changed the tech giant forever.
The U.S. government has filed a federal antitrust lawsuit against the tech behemoth Google that can change your browsing experience forever. In a landmark lawsuit filed with the Department of Justice, Google is accused of illegally maintaining a search monopoly across the web, consequently throttling competition.
Google, which is owned by Alphabet Inc. has been accused of paying billions of dollars gathered by the advertisers to the mobile phone manufacturers to secure its place as the default search browser.
After years of allegations by lawmakers and consumer advocates for abuse of dominance in the digital browsing and advertisement industry, attorney generals of eleven Republican states came together to file the antitrust lawsuit with the government.
In a statement, US Deputy Attorney General Jeff Rosen said:
Google is the gateway to the internet and a search advertising behemoth. It has maintained its monopoly power through exclusionary practices that are harmful to competition.
This is not all, other business oligarchs like Amazon, Facebook and Apple are also under investigation which is being carried out by both, the Justice Department and the Federal Trade Commission. The anti competitive practices by the oligarch has not only affected its competitors but also the consumers by diminishing the quality and choices of search and jeopardizing the privacy of user data.
A report submitted by the subcommittee of House Judiciary concludes that Google established monopoly in the search by buying as many as 260 companies in 20 years from its inception.
Silicon Valley’s darling during the initial days has now turned into a goliath with a market value of more than 1 trillion USD and monopoly over 90 per cent of web searches worldwide.
The trial is most likely to begin during the second half of 2021 or in 2022. However, the company is refusing to accept the allegations put on it.
In a tweet, google said, “Today’s lawsuit by the Department of Justice is deeply flawed. People use Google because they choose to, not because they’re forced to or because they can’t find alternatives.”
According to the critics, mere billion dollar fines and practice changes won’t work. European regulators tried doing that in recent years and hardly things improved. Most probably, the company will undergo massive structural changes. Talking more precisely, Google might undergo a spin-off, separating Chrome browser as an independent company. But of course, this is only possible if the two parties do not make any settlement meanwhile.
The company, headquartered in California, in its defense claims that despite the massive share that it takes in the market, it has always ensured maintaining competition. It also claims that Google has created utility for consumers and amplified innovation.
The company offers maximum services to the users for free. However, only monetarily free because they still take your information in return for utility. This information is google’s weapon to make humongous sales of ads possible.
The most elementary and possible remedy according to Columbia Law professor Tim Wu, would be to not let Google be the default browser. However, that seems feeble to topple the dominance that the company has on the ecosystem.
This is not all, attorney generals of plenty of other states are yet to begin separate complaints out of the parallel investigation carried out against the tech behemoth. The move of Republican government is largely being witnessed as a retaliatory measure on the company for entertaining anti-conservative narratives. Democrats argued that while they do not oppose the lawsuit filed in the U.S. District Court in the District of Columbia, they still suggest for the laws to be in accordance with the digital era as the company has created multiple free products for consumer’s utility. This, according to Democrats, makes it difficult to prove whether Google’s practices have actually harmed consumers.
However, this is not the first time that Google is fighting a lawsuit like this. It recently fought one in Europe and will again fight back the one in the parent country with its global network of lawyers, lobbyists and economists.
The company has already started fighting against the federal allegations on the minute levels. Google’s Chief Legal Officer, Kent Walker, wrote in a blog — the lawsuit will do nothing to help consumers. To the contrary, it would artificially prop up lower-quality search alternatives, raise phone prices and make it harder for people to get the search services they want to use.
In 2019, Google earned revenues amounting to $34.3 billion through the search service, alone in the United States and the anticipated figure by 2022 is $43.5 billion.
These investigations by the prosecutors have been taking place for more than a year where rival companies were interrogated and asked for documents and information as proof to build the case. Two points that the Justice Department will have to prove in order to make the lawsuit successful are:
1) Google is dominant in search.
2) It monetarily tied up with companies like Apple and others to topple competition.
The codependency of Apple and Google — The giant tech bestfriends
While Google is being accused of paying smartphone manufacturers of keeping it as the default browser, another name that pops up is Apple. According to the prosecutors, Google has been paying Apple to stifle the search competition.
The investigations reveal that approx $8 billion to $12 billion are paid by google annually to Apple to sustain its position as the default browser.
In 2019, an estimated fifty per cent of search traffic on Google originated from Apple devices.
When Google slips from its prime position on iPhone devices, it is regarded as a ‘Code Red’ situation in the company’s headquarters. At Apple, 15 to 20 percent of the entire profit of the company comes from Google payments.