"Google Exerts Dominant Market Influence"
Google's Monopoly Crackdown: U.S. Actions and Europe's Response
The gong has sounded loud and clear: "Google is a monopoly that's been abusing its power." Not a European or Canadian court this time, but the U.S. Department of Justice has made this damning declaration. This development points to a dire predicament for the search engine giant.
Alain McKenna's take on the matter is straightforward. After all, this judgment stems from the U.S. justice system under the reign of President Trump, who had a cozy relationship with American tech titans. Google's CEO, Sundar Pichai, was there alongside his counterparts from Amazon, Apple, and Meta, during Trump's swearing-in.
Yet, even if Trump chose to intervene against the Justice Department's verdict, he could only delay the inevitable, according to Stéphane Ricoul, a digital economy specialist from Geneva. "He can slow things down, create obstructions, but I don't think that'll halt the machine," Ricoul says. "In any case, the European Union will pressing forward."
Interestingly, for once, Brussels and Washington are on the same page. Google, apparently, monopolizes key technologies in digital advertising, pushing the web editors into a corner when they buy and sell advertising that reaches millions of customers. The European Commission takes it a step further, accusing Google of treating its own services more favorably than those of its rivals, and not ensuring transparent and equitable treatment of third-party services.
Europe also alleges that Alphabet does not treat creators fairly who sell mobile apps and digital services in the Play Store of mobile devices running the Android system. The Old Continent may have a broader reach in terms of opening digital markets than the United States, with Apple, Amazon, and Meta next in its sights, for similar reasons.
These unfair monopolies are the primary concern, says Brussels.
Google's grasp on the internet isn't shy, with few companies having an influence as wide as Google's. Its browser Chrome is the most commonly used for web surfing, YouTube is the go-to platform for hosting and watching online videos, and its web-crawling robots, advertising platform, and web traffic measurement are also dominant in their respective fields.
This dominance didn't happen naturally. To fortify the position of its search engine, Google has paid Apple billions of dollars annually, a practice the justice system is strongly advising it to discontinue. Google is also doing the same with Samsung to ensure its Gemini AI app remains the default digital assistant on Samsung devices, as generative artificial intelligence starts to make a splash.
Of all Google's moves that are causing a stir, this is the one that raises the most eyebrows at the U.S. justice system.
The U.S. justice system is weighing in with the possibility of divesting Google's Chrome browser as part of measures to dismantle its search engine monopoly. Other remedies could include separating Google’s ad server from its ad exchange to prevent self-preferencing, or spinning off its "Google Network" division into a regulated entity. Such moves would reduce Google's control over digital advertising, a significant revenue generator for the tech giant.
This potential breakup could pave the way for new antitrust actions against other tech giants, particularly concerning vertical integration and default-setting practices. Moreover, remedies might establish new transparency requirements for digital advertising markets, affecting publishers and competitors alike.
A breakup could also spur short-term stock volatility, but analysts believe divesting low-margin units could let Google prioritize high-growth sectors. However, the compliance costs associated with implementing court-ordered changes could strain resources and slow innovation in areas like AI. Protracted litigation could also amplify reputational damage and divert the leadership's focus.
In the broader picture, Google's predicament resembles the AT&T and Standard Oil cases of the past, and may prompt similar structural remedies for anticompetitive practices in search and advertising. If history repeats itself, Google may have to part with its browser Chrome, aside from abandoning certain practices related to online search, and potentially scaling back its ambitions in the field of AI.
- The U.S. Department of Justice, in its antitrust billions lawsuit against Google, has rendered a damning decision, stating that Google is abusing its monopoly power in technology.
- Stéphane Ricoul, a digital economy specialist from Geneva, suggests that even if President Trump were to intervene against this verdict, it would only slow down the proceedings, as the European Union is pressing forward with similar antitrust concerns.
- The European Commission alleges that Google's dominance in digital advertising has pushed web editors into a corner, treating its own services more favorably than those of rivals, and not ensuring transparent and equitable treatment of third-party services, which could be subject to structural remedies, similar to the cases of AT&T and Standard Oil in the past.
