The USA v. Google
In what seems to be a climax in the recent American investigation into anti-competitive behaviour by Bigtech, the Attorney General has filed an anti-trust lawsuit against Google. The highest profile anti-trust action taken by the US Government since its battle with Microsoft in the 1990s, many are watching with great anticipation.
The charges against Google’s unlawful use of monopoly power ranges from the linguistic to the quantitative. The lawsuit notes that Google has became so dominant that ‘ “Google” is not only a noun to identify the company’, but ‘also a verb to search the internet’, connoting the reliance people have on the company’s search engine. To support its claim, the lawsuit claims that ‘Google effectively owns or controls roughly 80%’ of search distribution channels in the United States.
The lawsuit maintains that Google pays device makers to place its own search engine in advantageous, easy to access positions, used its contracts with device makers ‘to block other search engines’ and required its search services to ‘be given a prominent position on all handsets that include its Play app store and other services’. Calling the case ‘deeply flawed’, Google’s chief legal officer, Kent Walker, claims that ‘People use Google’ not because they are forced to or due to a lack of choice, rather because they wish to. While the strength of the case is yet to be seen, what it does show is the weakness of competition regulation in the US.
The standard of anti-trust in the US is consumer harm. However, Google brings many benefits to consumers as a free search engine which is constantly being improved. Moreover, asking device makers to have their search engine preinstalled is a convenience which many consumers appreciate. Should they have a different preference, changing engines is still a quick and free process. Anti-trust enthusiasts appeal for the reform of antitrust law, inserting socioeconomic goals above consumer welfare. However, would this truly be beneficial?
Jessica Melugin, an associate direct of the Centre for Technology and Innovation at the Competitive Enterprise Institute, argues not. She argues that, in fact, it stifles innovation; a crucial part of today’s economy. Melugin premises her argument on the claim that what are innovative business decisions may seem ‘enigmatic to outsiders’; simply because it’s foreign and misunderstood does not mean it is wrong. Melugin fears that over-enforcement of anti-trust regulation, through thwarted business practices, may sap crucial entrepreneurial energy in America’s economy, preventing new improvements and inventions from seeing the light of day. Consequently, she argues, that consumer should always be king.
Additionally, preventing unfair barriers to competition, the purpose of competition law itself, may be hindered by its own drafting processes. When drafting new laws, major players in the industry will be consulted, however, this is not necessarily true for smaller businesses; an example of how those same regulations could be challenges to entry themselves. Consequently, antitrust action goes to compound the problem, ‘stifling competition instead of preserving it.
