The Department of Justice (DOJ) just slapped Alphabet with Google’s antitrust lawsuit in what is considered the biggest lawsuit any tech giant has ever faced. The lawsuit aims at regulating the tech giant’s control over the billion dollar Search market.
Filed Tuesday, 20 October 2020, after a 16-month investigation, by the Department of Justice and 11 US states, the lawsuit argues about Google’s search dominance. The complaint states, “Two decades ago, Google became the darling of Silicon Valley as a scrappy startup with an innovative way to search the emerging internet. That Google is long gone. The Google of today is a monopoly gatekeeper for the internet, and one of the wealthiest companies on the planet.”
Tuesday’s briefing was held by Attorney General Jeffrey Rosen. Jeffrey has compiled a 64-page complaint that accuses Google of many wrongdoings, the main highlights of which are:
- Serving as a gatekeeper for the Internet
- Exclusionary practices that prevent competition
- Interlocking agreements that exclude competitors
- Illegal agreements
- Pre-installing its apps in multiple devices and make them undeletable
Now that you know everything about Google’s antitrust lawsuit, let’s discuss the elements that led to this landmark case and what could be its repercussions.
The Story behind Google’s Antitrust Lawsuit
Search is the bread and butter of Google. While the company has been exceptional in making ‘search’ incredibly innovative and user-friendly in comparison to other players, it is possible that the race was actually fixed.
Every year, this Alphabet’s subsidiary pays billions of dollars to device manufacturers (Apple, Samsung, Motorola), wireless carriers (AT&T, Verizon), and browser companies (Mozilla, Opera, Safari). The intentions might be to secure its default status for its search engine that handles nearly 90% of all queries in the US, and 95% on mobile devices.
The Department of Justice previously went to battle with Microsoft during the 90s over antitrust concerns. Any antitrust case takes shape when one or all of the following instances are present in a particular industry:
- Unfair business practices
- Suffocation of rival companies
- Lack of innovation
While Google does get the credit for finding innovative ways to transform a simple ‘search’ platform, the lucrative business opportunities present in the medium can invoke practices that impose dominance.
What has been the lawsuit’s impact?
The stock markets of US closed higher on Tuesday:
S&P 500: 3,443.12; up by 0.5%
Nasdaq composite: 11,516.49; up by 0.3%
Dow Jones industrial average: 28,308.79; up by 0.4%
The reactions of business leaders and policy makers from around the world were mixed. While some hailed CDJ’s efforts, some viewed it as an act of vendetta by the Trump administration.
How Google reacted?
Google’s immediate response was not towards the lawsuit, but its employee whom it asked to “stay focused.”
Kent Walker, Chief Legal Officer of Google, wrote in an email, “While we can expect some tough criticism and even misleading claims about our work, it’s important not to get distracted by this process, including speculating on legal issues internally or externally,”
In a separate email by Sundar Pichai, Chief Executive Officer, asked the same to googlers. He wrote, “Scrutiny is nothing new for Google, and we look forward to presenting our case. I’ve had Googlers ask me how they can help, and my answer is simple: Keep doing what you’re doing.”
Towards the lawsuit, an official response came from Kent Walker, Google’s Senior VP of Global Affairs, in the form of a lengthy post labeled “Deeply Flawed.”
Mr. Walker wrote, “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.”
The antitrust case creates grave concerns for other bigger players of the market such as Amazon, Apple, and Facebook.
Each of these companies have been popular for exercising monopoly at some point, but not very officially. In a previous blog, we discussed how Facebook was like Galactus (the planet devourer from Silver Surfer) that consumes every potential app – which it did with Instagram and Whatsapp in 2010 and 2014 respectively.
While each has something to lose, sooner or later, the CDJ’s eyes are on Google for the time being.