US experts: Ruling on Google's monopoly may reshape the technology industry
2024-08-11
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Reference News reported on August 11On August 7, the US Newsweek website published an article titled "What would it mean for us to label Google a monopoly?" The author is Mark Weinstein, a well-known US technology analyst. The full text is translated as follows:
On August 5, U.S. District Court Judge Amit P. Mehta ruled that Google violated antitrust laws to maintain its monopoly in online search. The judge clearly stated in the verdict: "Google is a monopolist, and its actions are intended to maintain its monopoly."
This landmark ruling marks the first major antitrust ruling against a tech giant in the modern digital era. It is the right decision and it is long overdue. It will also reshape and improve the tech industry.
According to the case, Google's anti-competitive behavior included paying billions of dollars each year to sign exclusivity agreements with companies such as Apple and Samsung. These agreements ensured that Google was the default search engine on all of their devices and browsers. According to the court's ruling, these agreements "required a monopoly of 45% of the general search text advertising market."
It is hard to disagree with the judge’s finding. These agreements prevent any potential competitor from reaching the scale necessary to pose a challenge. This allows Google to charge advertisers higher prices without competitive pressure. All the while, Google uses its search engine to prioritize its own products and content, putting competitors at a disadvantage in search results. More than 90% of web searches are conducted through Google.
Data is the new oil. Google is a data company. It aggregates vast troves of our data to further enhance its search power and dominance.
Big Tech giants are the new nobility in town. They have unprecedented global reach and can influence our thoughts, opinions, purchases, and votes to a greater extent than any country or government. These giants decide which stories you see and which you don’t through algorithmic leverage. This helps manipulate our thoughts and opinions from behind the scenes of their carefully curated (based on personal data and artificial intelligence) newsfeeds.
The Google ruling and pending remedies are particularly important. They will affect a series of antitrust cases currently underway against other large technology companies. The U.S. Department of Justice has filed a lawsuit against Apple, accusing the company of blocking consumers from choosing other phones; the U.S. Federal Trade Commission has sued Meta, a platform company, for suppressing emerging competitors, and Amazon for exploiting sellers on its platform.
The heaviest penalty a big tech company has received so far is the $5 billion fine the FTC levied on Meta in 2019 for privacy violations. If the penalty is enforced to the maximum, the fine could exceed $7 trillion. Tellingly, Meta's stock price immediately surged after the FTC announced the fine, quickly recouping its losses.
Why are the penalties so light traditionally? Because big tech companies spend millions of dollars every year lobbying lawmakers or government officials. Among members of Congress who have power over privacy and antitrust issues, 94% have received donations from political action committees or lobbyists from big tech companies.
New antitrust remedies are needed to address this unique challenge. Big Tech’s monopolies over data and content must be broken. New policies that support startups and smaller competitors are essential. Increased competition is essential to curbing Big Tech’s outsized influence over our media, news, personal data, and democracy. The last tech giant to face antitrust penalties was Microsoft nearly 25 years ago. Today, we are in a different era.
The question of weakening Google's dominance will be decided at another hearing. This is a difficult matter. Finding a large company guilty is one thing, but what kind of punishment will have the desired effect of freeing up the market? There must be a mandate to prevent Google from entering into exclusive agreements that exclude potential competitors, placing its own products at the top of search results, or other self-serving behavior. There must also be strong, enforceable penalties for violations.
Breaking up these giants—starting with Google as the first domino—will be transformative. The online tech industry is only about 30 years old. It’s too early to close the door on the free market and allow a handful of tech companies to dominate unchallenged. We’ve only scratched the surface about how these emerging technologies can best serve consumers. Antitrust laws are designed to support a free and competitive business environment where America’s entrepreneurial spirit can flourish. Let’s get started.
