On Tuesday 20 October 2020, the United States (US) Justice Department and eleven states filed an antitrust lawsuit against Alphabet Inc’s Google for allegedly using its power in the market to keep competitors away.
The lawsuit marks the largest antitrust case against a tech company in two decades, compared to Microsoft’s lawsuit in 1998.
What is it all about?
- The direct reasons behind the antitrust lawsuit:
The US Justice Department claims that Google acted illegitimately to preserve its position as a search and advertising engine on the internet. Google is using its anti-competitive strategies, handicapping the competitive process, and preventing innovation.
The antitrust lawsuit targets a series of interlinked actions taken by Google to harm competition and block existing and potential competitors from growing their audience. Google roughly holds 80% of the search market by entering into “exclusionary agreements” with browser developers and device manufacturers. For example, Android, Apple and Samsung made Google search the default on their phones. As a result, Google generated USD 34.3 billion in 2019 in search revenues in the United States, and it is expected to make USD 42.4 billion by 2022.
“Nothing is off the table” said Deputy Attorney General Jeffrey Rosen. Google has been for so long the unchallenged gateway of the internet for billions of users around the world and now has come the time to put an end to the monopoly exercised by Google and restore competition.
The company has long denied complaints of antitrust violations, and this time, it will also fight the government’s allegations, just like it did against the European Union. The company stated that people deliberately choose Google, not because they are forced to, or because they don’t find alternatives, but because the company actually gives its consumers what they want.
- The indirect reasons behind the antitrust lawsuit:
However, the antitrust lawsuit is not only about Google. It actually shows the US Justice Department’s intentions to oppose the monopolistic power of the largest corporations and especially technology giants like Amazon, Facebook, and Apple. It may set off a cascade of other antitrust lawsuits with a similar magnitude.
The antitrust lawsuit would probably be criticized as being politically motivated. Otherwise, what would explain the sudden rise of the antitrust lawsuit just a few days before the US presidential elections?
The Trump administration has long attacked Google, which owns YouTube and other online platform companies, for being biased. President Trump promised to hold certain companies accountable for oppressing conservative voices. Yet, experts found no evidence on such allegations.
- The aftermath of the antitrust lawsuit:
Google, the “Silicon Valley sweetheart,” is undoubtedly a powerful search engine holding a monopolistic position. It has invested billions in infrastructure, technologies, software, engineering, artificial intelligence, and talent, and nobody can deny that.
The antitrust lawsuit cannot just undo a decade of significant technological progress. As a matter of fact, Alphabet’s share rose nearly 1% after the lawsuit news against Google. However, a victory for the government could remake one of the United States’ most recognizable, powerful, and global tech company. Breaking Google’s monopoly in the tech industry will pave the way for the next wave of innovation, and the whole world will have the chance to see the next Google.
