Finally. The U.S. Department of Justice, accompanied by 11 states, made a long-awaited announcement Tuesday, Oct. 20, opening antitrust proceedings against internet giant Google. For years, suspicions around the abuse of its dominance over smaller companies have hung over the Mountain View firm in Silicon Valley.
The inquiry targets online search activity and the advertising associated with it. The search engine alone holds more than 80% of the market share in the United States. The Justice Department accuses Google of “unlawfully maintaining monopolies” by automatically installing its search engine on smartphones running Android, the group’s own operating system, but also on those of Apple, which pays a dividend for it. These practices, say federal authorities, have deprived other search engines of normal competition conditions and have therefore illegally restricted their “paths to market and access, at scale, to consumers, advertisers, or data.”
The fact that there is an election should not be overlooked in this decision announced in the home stretch of a presidential campaign in which the role of social networks and Big Tech has been widely questioned. Two weeks ago, the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law called for better supervision of these companies. The bipartisan support in Washington for opening the proceedings shows how much the tide of public opinion has turned in recent years. There is a growing awareness that these firms, created by young computer geniuses in West Coast garages, have become sprawling businesses.
Tackling This Spectacular Dominance
The initiative is welcome in many ways. First, while the battle promises to be long, it provides an opportunity for the justice system to confront the Big Tech’s dominance over the internet. In 1998, the federal government accused another of these giants, Microsoft, of dominating smaller companies. After three years of litigation and threats to dismantle the company, Bill Gates’ firm negotiated a settlement that was supposed to clean up the landscape and open up a genuinely competitive market for nascent start-ups.
But these, in turn, have grown to be giants without anyone at the Justice Department raising any concern. Today, the market capitalizations of Google, Apple, Facebook, Amazon and Microsoft have reached astronomical levels. This power allows them to buy out competitors and expand their activities into increasingly more fields. It is therefore high time to tackle this spectacular monopoly, which has only intensified with the crisis caused by the pandemic.
The other merit of the complaint against Google is that it should make it possible to apply and adapt the American antitrust system to the digital economy, to its criteria and to its specific characteristics. The Justice Department’s decision restores the federal government’s role as regulator of competition against powerful monopolies, a role that many critics accused the Justice Department of neglecting. These proceedings will at last bolster the European Union’s fight against the power of GAFAM which the EU perceived as dangerous long before this.