Why Google should be afraid - very afraid - of pending anti-trust investigaiton
If investigation goes forward, no doubt it will be broad, lengthy and impossible to predict
This is the moment the US technology superpowers surely knew was coming: The US government is preparing to crawl all over Google to figure out whether it is an abusive monopolist. Google parent company Alphabet and the other tech giants should be quaking in their fleece vests.
News organisations reported late Friday that the US Department of Justice is preparing to open an investigation into Google’s compliance with antitrust laws. If it goes forward, an investigation will no doubt be broad, lengthy, messy and impossible for Google and its investors to predict.
That should terrify Google and every other big technology company - because there’s no guarantee that the antitrust Klieg light will turn on one company alone.
This isn’t Google’s first antitrust rodeo. The US Federal Trade Commission in 2013 closed without further action its own antitrust investigation into whether Google wielded its dominant web search engine like a cudgel to disadvantage rivals, drive up prices for advertisers and ultimately harm consumers. (Google did agree to some voluntary changes.)
And in recent years, the European Union antitrust watchdog imposed billions of dollars in fines after finding antitrust violations, including over how Google conducted business with its Android smartphone software and its internet shopping service. In the US and elsewhere, politicians from all party stripes have sought to attack Google or other tech giants for various perceived sins, including being too big for the good of industry and consumers. Being Google has meant dealing with perennial regulatory and political nightmares.
This latest chapter of “As Google Turns” may have started in January on Capitol Hill. “I don’t think big is necessarily bad, but I think a lot of people wonder how such huge behemoths that now exist in Silicon Valley have taken shape under the nose of the antitrust enforcers,” Bill Barr, now the US attorney general, said to US senators during a confirmation hearing. The DOJ’s chief antitrust enforcer, who represented Google during a merger more than a decade ago, has expressed similar views.
Antitrust investigations are difficult to predict, of course. Once the US government pores over every internal email and business development contract, there’s no telling what it will turn up. If the DOJ moves ahead, it will also be an open invitation for every company or individual with a gripe against Google to pile on, and an investigation will embolden critics of Facebook, Amazon and other tech giants as well.
It’s worth remembering that Google narrowly escaped a possible antitrust lawsuit the last time the US looked closely. Portions of communications between FTC commissioners and staff later showed that staffers wanted to bring an antitrust lawsuit on a few matters including on what they said was Google’s strong-arm tactics to scrape information from websites such as Yelp and TripAdvisor without their permission to improve Google’s search engine. Ultimately the FTC commissioners unanimously voted not to pursue a lawsuit and possibly a breakup of what was then a smaller Google.
That was a different regulatory agency during the administration of President Barack Obama, which was considered relatively cozy with Google. The current White House has been openly critical of Google, largely over bogus claims that it and some other tech companies unfairly suppress conservative voices online.
Washington is much different than it was in 2013, and sentiment in the capitol and beyond has soured as US technology superstars have grown even larger and more dominant. An investigation of Google is likely to be politically popular on both the left and the right. The politics and the optics aren’t in Google’s favor. Now we’ll see – again – whether the law is against the company as well.
Published: June 3, 2019 08:00 AM