DOJ takes the gloves off against Big Tech
The internet has been a powerful source of innovation and opportunity in the half-century since the first electronic message was sent between experimental nodes at UCLA and Stanford. And in some industries, it remains a great equalizer — giving upstart creators and service providers the sort of access that used to be the exclusive province of big corporations.
That’s why policymakers in the United States have been loath to intervene, worried that any rules they set would be counterproductive or quickly rendered obsolete by the rapid pace of change.
The gloves have now officially come off. The U.S. Department of Justice filed a much-anticipated lawsuit Tuesday accusing Google of abusing its dominant position in online search and advertising to cement its market power. The lawsuit, which was joined by 11 state attorneys general, is likely to be just the first in a salvo of antitrust cases, legislative proposals, rule-makings and other governmental initiatives to rein in Big Tech companies.
According to the Justice Department’s complaint, Google has used exclusive contracts with manufacturers and mobile phone services to make sure Google would be the default search service on browsers and mobile devices, and to guarantee that its apps would be placed prominently on products’ screens. This conduct led it to control more than 90% of the searches, the complaint alleges, while also buttressing its dominant position in online advertising.
Google defended its actions and argued that consumers are free to choose other services for their searches.
Failing a negotiated settlement, the courts will ultimately decide whether Google’s behavior crossed the legal line. But with California and three dozen other states still investigating Google, there will almost certainly be more cases filed, just as there are more concerns about the company than the Justice Department addressed, including whether Google competes unfairly by favoring its own products (such as Youtube and Google Maps) in its search results, and whether Google inappropriately uses its advertising network to boost its own products by collecting data from consumers on competitors’ sites.
Monopolies aren’t necessarily illegal — efforts to preserve them are.
That’s why antitrust authorities at the state and federal level are also scrutinizing Facebook, which has a track record of trying to gobble up or crush companies that could compete with its social network, and Amazon, which has been accused of competing unfairly with the many small and midsize businesses that sell products and services through its platform.
And then there is the flak that Twitter, Facebook and Youtube (which, like Google, is owned by Alphabet) have taken for the way they limit what users can say or post on their platforms.
For Big Tech, it’s a reckoning that’s been a long time coming. The internet is still capable of supporting vigorous competition and a free-flowing exchange of ideas, and rapidly changing technology still has the potential to disrupt markets and topple once-dominant corporations. But as much as lawmakers and regulators need to keep those realities in mind, they also need to make sure dominant companies don’t leverage their power to choke off competition and leave consumers with too few good alternatives and too little innovation.
Los Angeles Times