Google is the world’s largest Internet search engine company. Its market value is about $1 trillion. It also reflects the importance of the company in people’s lives.
On October 20, the U.S. justice department filed a lawsuit with 11 states, alleging the Google monopoly.
Google is always acting as the dominant gatekeeper to the Internet. Moreover, for years, it has taken steps to prevent others from encroaching upon its position. They did many things, such as exclusivity agreements that prohibit the pre-installation of any competing search services.
Indeed, though the data collected by Statista, in which you can see the chart below, over 50% of the internet users in most of the leading countries choose Google as their searching engine.
Google has signed deals with business partners to ensure that these searches are carried out through Google rather than competitors. Moreover, it cannot be deleted, regardless of consumer preferences. Suppose you searched the water bottle, for the ads appeared at the top, Google can charge them monopoly prices because, as the customer, you would tend to buy items more advanced.
Because Google had done many things before to reduce its competitors, the lack of competition means advertisers have to pay more to appear in Google search results. At the same time, consumers are forced to accept Google policies, privacy protections, and the use of personal data. The Google monopoly here has been involved in disrupting the market, which is why the U.S. government is suing it.
Google’s chief legal officer, Kent Walker, used the same opinion. He argued that the lawsuit did nothing to help consumers. Instead, “It will artificially promote alternative search engines of lower quality than Google and lead to higher prices on mobile phones while making it harder for people to get the search services they want to use.”
From the government’s perspective, the giants should be more tightly regulated and recommended structural separation, forcing companies to break up or restructure their businesses. Not only Google, but there are also many technology giants today which acting like a technology monopoly, such as eBay, Microsoft, Amazon. We have learned that a healthy economy should have networks through all big and small companies from the class. The technology giants deprive small and medium-sized businesses of the opportunity to survive in this network. Therefore, they dominate the network and monopolize the prices of their product, which negatively impacted the market.For example, suppose you searched the water bottle, for the ads appeared at the top. Google can charge the advertisers the monopoly prices because you would tend to buy items more advanced than the customer. That is why the U.S. justice department filed a lawsuit against Google.
We could remind the technology giants of their responsibility to maintain the stability of the free market and not to dominate the network. We all know that the power of capital drives resources to favor the technology giants. We need that the third party stand on the opposite side of the capital, remind them to keep an eye on consumers’ interests when the market is significant. They should also firmly maintain the market rules when the market is ineffective and make a quick response.
Reference Links:
- For tech giants, a cautionary tale from 19th century railroads on the limits of competition
- The Fire of Truth: A Remembrance of Law and Econ at Chicago, William Landes, JLE (1981) p.193
https://professorgeradin.blogs.com/professor_geradins_weblog/2005/03/funnyinterestin.html
- Statista’s report on the percentage of Google searches on computers around the world in May 2020
https://www.statista.com/topics/1001/google/
- Behavioral Antitrust, AP Reeves, ME Stucke – Ind. LJ, 2011 – Hein Online
https://heinonline.org/HOL/LandingPage?handle=hein.journals/indana86&div=40&id=&page=
- Antitrust Law, Second Edition, Richard A. Posner, University of Chicago Press, Published 2001
- Google is facing the biggest antitrust case in a generation. What could happen?
https://www.theguardian.com/technology/2020/oct/21/google-antitrust-charges-what-is-next
- U.S. Justice Department files antitrust lawsuit against Google, BBC News