The BigTech Cartel Is Threatened After Judge’s Ruling on Google’s Search Monopoly
The BigTech Cartel Is Threatened After Judge’s Ruling on Google’s Search Monopoly
A look at Judge Mehta's court ruling against Google, and how the DOJ's antitrust enforcement is challenging BigTech's iron grip on the industry for digital services and IT.
“After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly.”
- Quote from U.S. et al. v. Google
Introduction
Regular internet users have known about Google’s search monopoly for many years. We use the term “googling” synonymously with searching the internet and the top search query on the second-most popular search engine, Microsoft Bing, was www.google.com a few years ago. In 2020, nearly 90% of all search queries in the United States went through Google. For mobile devices, the number was closer to 95%.
On August 5, Google’s monopoly on “general search services” and “general text advertising” was officially recognized by the US courts in a landmark decision by Judge Amit P. Mehta for the United States District Court for the District of Columbia. The case was brought by the United States Department of Justice (DOJ) on October 20, 2020.
We still don’t know how Google will be sanctioned. Many options are on the table. Judge Mehta has reportedly asked the DOJ and Google to come up with a process for determining a fix by tomorrow and scheduled a hearing on September 6 to discuss the next steps with the parties. Mehta’s verdict could be the beginning of a years-long court battle that will eventually make it to the Supreme Court. Alternatively, DOJ and Google could reach a settlement.
The last time an antitrust ruling of comparable significance was issued against a major US tech company was in June 2000 when Judge Jackson ordered the break-up of Microsoft as its remedy for monopolizing the market for operating systems and tying the Windows OS with its default browser, Internet Explorer.
The ruling was later partially overturned by the Circuit Court. The case was eventually settled between the DOJ and Microsoft with lesser antitrust penalties such as a term in the settlement agreement that required Microsoft to share its API with third-party companies.
Today, we will take a closer look at Google’s new official status as a search monopoly under US law and how the new ruling may impact the BigTech cartel after more than twenty years of regulatory restraint.
Google’s Monopoly
Google was once a small project started by the two Stanford University students, Larry Page and Sergey Brin, in a rented garage. Less than twenty years later, Google has a monopoly on internet search and a market cap of +$2 trillion.
The other tech giants have similar origin stories. Microsoft, Amazon, Meta, and Apple were all founded by young, driven entrepreneurs from humble office spaces but quickly made hockey stick curves on their stock charts year after year.
The early pioneers of the web and personal computers, famously Larry Page and Sergey Brin, Bill Gates, Jeff Bezos, Mark Zuckerberg, and Steve Jobs saw the internet revolution before the rest of us and managed to build the infrastructure for it. The first-mover advantage combined with lax antitrust laws in the US and an unskeptical embracement of the new tech products among America’s closest trading partners, enabled the five tech companies to grow at an unprecedented scale and pace to become more resourceful, knowledgeable, and economically prosperous than many of the world’s developed countries.
During most of the 00's and 10's, the US antitrust regulators treated the tech giant’ with a very light touch. After all, the companies contribute greatly to the US economy and do many good deeds for the global society by connecting people online and providing them with a nearly infinite amount of information right at their fingertips. Together, the five companies have enabled the intelligence explosion that is the internet.
Now, the recent decision against Google marks the first significant antitrust ruling against the BigTech cartel since the Microsoft case in 2000. And the reckoning has just begun.
On grounds of antitrust, the Federal Trade Commission (FTC) and 17 states sued Amazon in September. The Department of Justice (DOJ) sued Apple in March. A separate lawsuit by the DOJ aimed against Google's advertisement business is expected to go to trial in September. Meta faces charges from 40 states and the FTC for its acquisition of Instagram and WhatsApp more than a decade ago.
We can wonder why the passive stance towards BigTech among US regulators has drastically changed in the late 10s to early 20’s.
A big part of the explanation may be that the five companies are on a trajectory to grow so large and powerful that even the US government cannot contain them. We can think of AI development and (mis)information on social media as examples of how technological forces – for better and worse - are shaping society at the expense of democracy and state control.
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