Google is a monopoly. The fix isn't obvious
- Reference: 1723721289
- News link: https://www.theregister.co.uk/2024/08/15/google_monopoly_fix/
- Source link:
Back in 2013, Google escaped unscathed from a US Federal Trade Commission probe when the watchdog agency [1]closed its investigation without bringing charges. Its other run-ins with competition cops around the world have been similarly inconsequential. There have been fines, but they've been immaterial.
In the past eight months, however, Google has lost two major US competition lawsuits: One brought by [2]Epic Games over Google's grip on the Android ecosystem, the other brought by the [3]Department of Justice over the Big G's market-dominating search advertising business.
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In the Epic Games case this week, the FTC – emboldened under boss Lina Khan – [5]urged the judge to consider an appropriate remedy and ignore Google's fretting about the potential cost of compliance.
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And in the DoJ's search advertising case, the focus has also turned to possible remedies, now that Google has been declared an unlawful monopolist.
The Chocolate Factory has [8]appealed the Epic verdict and also plans to challenge the DoJ's victory.
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However, given the EU's [10]preliminary findings in 2023 that Google violated antitrust laws with its advertising practices, and a separate trial this September over Justice Department [11]allegations about Google's ad tech operations, it's looking increasingly unlikely the search giant will survive in its current form or with its current arrangements.
Reports [12]suggest American prosecutors working on the search advertising case have been discussing remedies including a corporate breakup, to present at a September 6 hearing. These measures include possibly slicing off Chrome and Android from Google into separate entities; forcing the internet giant to ditch its exclusive deals that make it the default search engine on devices and in browsers; and/or making it share data with rivals.
Jason Kint, CEO for trade group Digital Content Next, told The Register that with regard to the DoJ's search advertising case, "Forced divestiture of Chrome and Android I think are both on the table for sure."
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"What the judge made clear was that they [Google] have an overwhelming monopoly in search," said Kint. "And they've abused it."
If the pending separate ad tech trial – which covers the backend auction part of Google's ad business – goes the same way as the search one, Google's DoubleClick business, or a related piece of ad auction infrastructure, could be on the chopping block.
One of the central issues in the DoJ's search ads case is the payments Google makes to Apple and Mozilla to be the default search engine in Safari and Firefox. If those go away, there will be blood – not just for Google but also for Apple and Mozilla.
Apple would have to find other revenue to replace roughly $20 billion in annual payments from Google. That might encourage the iBiz to compete with Google – by building its own search engine, or acquiring one. Mozilla, already [14]showing interest in the ad business, might be pushed further in that direction – an outcome unlikely to appeal to the anti-commercial portion of its constituency.
A fitting though unlikely outcome would be for Google to be forced to turn Chrome and the open source Chromium project over to Mozilla. That would probably involve the creation of an independent non-profit foundation that didn't reduce browser diversity – so Chrome and Firefox could continue to lead independent lives.
[15]Microsoft pushing, pushing, pushing Edge in Defender slammed as a 'dark pattern'
[16]Microsoft tweaks fine print to warn everyone not to take its AI seriously
[17]Apple tries again to make EU DMA officials happy – with new fees
[18]UK monopoly police launch full blown probe of Amazon's Anthropic tie-up
Chrome could also be operated as a for-profit business, but revenue generation might be an issue – netizens expect browsers to be free, so we'd be back to default search deals and selling information to advertisers.
The possibility of forcing the divestiture of Android is also intriguing – but it's unclear how Android development and app distribution would work if starved of Google's monopoly money.
It's worth asking whether any of Google's peers – Amazon, Apple, Meta, or Microsoft – could turn Android or Chrome into a business that better served the public. The answer is almost certainly not. After all, each of these giants also faces ongoing antitrust scrutiny. And each of them would probably look for ways to make Chrome or Android more extractive.
Side note: There are some within Big Tech that believe Google and others like it can outrun any monetary punishment. Whatever fine may be imposed against them, when it comes time to pay after all the ensuing appeals and challenges are over, the corporation being punished will have grown large enough during that time to comfortably file the original fine under its business expenses.
There's a real risk that a poorly targeted remedy would just allow some other data predator to thrive, or would degrade the overall ecosystem – as happened when wolves were [19]removed from Yellowstone. Imagine a Meta operating Google Play, and what the privacy disclosures would look like then.
The problem is that software platforms need regulation tuned to their specific abuses. Operating a software (or e-commerce) platform is similar to operating a shopping mall, except that platform landlords can impose arbitrary terms on tenants that would never fly in the physical world. In the tech industry, a platform is simply a vehicle for unfair competition – see the FTC [20]allegations against Amazon .
Say someone opens a shop selling maps and it proves popular. As the platform landlord, you may decide you too want to run a map shop. It would be a petty thing to do to a shop owner whose efforts and presence add value to your mall, but there's no law against it.
Chrome Web Store warns end is nigh for uBlock Origin [21]JUST FYI
And if your tenant's shop is doing better, you can rearrange the mall layout to make that shop harder to find while you move your own shop to the entryway where everyone will see it. Or you may decide to impose some arbitrary contractual rule that gives you an advantage. Perhaps you'll implement private APIs that make your maps function better while not allowing your tenant to use those APIs. Maybe you'll choose to charge a commission that makes it hard for the tenant to be profitable.
Such self-preferencing is common on software platforms, when it would cause an outcry or a lawsuit in an actual mall.
Forcing Google to divest Chrome or Android may help – but whatever remedy is imposed, it needs to also address self-preferencing, just as Europe's Digital Markets Act has done for designated gatekeepers. Platform owners should be forbidden from favoring their own services and competing unfairly with platform tenants. ®
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[1] https://www.nytimes.com/2013/01/04/technology/google-agrees-to-changes-in-search-ending-us-antitrust-inquiry.html
[2] https://www.theregister.com/2023/12/12/epic_v_google_epic_wins/
[3] https://www.theregister.com/2024/08/05/google_default_search_deals_violate/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Zr4mJLe24v-rEphUv-8cDgAAANc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://www.theregister.com/2024/08/13/ftc_google_android_monopoly/
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zr4mJLe24v-rEphUv-8cDgAAANc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Zr4mJLe24v-rEphUv-8cDgAAANc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[8] https://www.reuters.com/legal/transactional/google-asks-judge-overturn-epic-games-antitrust-verdict-2024-02-02/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zr4mJLe24v-rEphUv-8cDgAAANc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[10] https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3207
[11] https://www.justice.gov/opa/pr/justice-department-sues-google-monopolizing-digital-advertising-technologies
[12] https://www.nytimes.com/2024/08/13/technology/google-monopoly-antitrust-justice-department.html
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Zr4mJLe24v-rEphUv-8cDgAAANc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[14] https://www.theregister.com/2024/06/18/mozilla_buys_anonym_betting_privacy/
[15] https://www.theregister.com/2024/08/14/microsoft_edge_promotion_in_defender/
[16] https://www.theregister.com/2024/08/14/microsoft_services_agreement_update_warns/
[17] https://www.theregister.com/2024/08/09/apple_eu_compliance/
[18] https://www.theregister.com/2024/08/09/cma_launches_full_blown_probe/
[19] https://www.yellowstonepark.com/things-to-do/wildlife/wolf-reintroduction-changes-ecosystem/
[20] https://www.ftc.gov/news-events/news/press-releases/2023/09/ftc-sues-amazon-illegally-maintaining-monopoly-power
[21] https://www.theregister.com/2024/08/06/chrome_web_store_warns_end/
[22] https://whitepapers.theregister.com/
Be careful what you wish for. In the ad-slinging game the profitablity comes from their customers, the advertisers, so a fight for profitability might kick off the race to more privacy-busting profiling and tracking for consumers. I'm not disagreeing that Google has a stranglehold that needs to be broken but as a consumer of Google's products I'd like a lot of thought to be given to the potential outcomes and how consumers are protected before any solutions are jumped at.
Also - I think that this has got a long way to run yet. Google will drag this all the way to the Supreme Court before giving up and use the time to position itself to profit from whatever break-up scenario ensues should they lose the case and be broken up.
Break up Google how, exactly? Split Google Search away from the paid search ads which still functionally pay for Google's search? That still leaves one company with a monopoly on Google Search and one company with a monopoly on those paid search ads.
There is a real and significant risk here of a similar breakup to AT&T's '80s breakup, which only resulted in a number of local monopolies instead of a national monopoly for telecommunication for a long time.
The same risk exists for Google's Banner advertising offering, Google Analytics, Google Search Ads 360, Google Looker Studio/Looker Pro/Looker, Google Drive, Google Chrome etc.
I hate Google with a passion, but if they're going to get got on their BS, they need to be got right.
If you read the article
it touches on the difficulties of that approach.
Maps
I think your map shop example gives a clue.
I don’t think the problem is the size of Google and its ilk The bigger problem is the laws that are NOT in place to stop the horrendous business practices these companies employ to get where they are.
If (for example) dodgy profiling of customers to provide targeted advertising was outlawed then Google’s advertising business would fall off a cliff. Advertising works go away though - it would just revert back to how it used to be done. And many more (smaller) companies would get on in the act on a level playing field
Other examples include the sneaky use of Captchs (however you spell it) which serves little purpose above tracking people in a way they don’t know is happening. Again, there should be laws in place to stop stuff like this.
The only reason chrome exists is to track users and gather information from them. Again, this should be outlawed. Google would very quickly lose interest in maintaining a loss leader like chrome if all that lovely data wasn’t forthcoming
The problem is not the business size - it’s what it (and others) are allowed to get away with that is the real problem
Meta store
"Imagine a Meta operating Google Play, and what the privacy disclosures would look like then."
They do operate an app store, with an expectedly long and incomprehensible privacy policy. It's just for VR apps, which are technically Android apps, since their OS is forked from it. They don't have a monopoly, so they behave, mostly. Icon because it's what we all are these days.
Re: Meta store
Imagine Elon Muskrat running the Google search engine
Perhaps the buying and selling of businesses should be outlawed
Perhaps the buying and selling of businesses should be outlawed. This was supposedly done with slavery in the USA. It could be done with businesses too.
There are lots of stories out there of competition getting bought up just to close them down so there's less competition, etc...
I'm sure there would be complected issues in implementing this. Like, What to do about businesses that already have done, or only doing this? In some cases it maybe better for customers to have a few companies rather than several smaller companies. What about companies that also operate in other countries? What about existing agreements that maybe counter to this idea? ...
Two words : Consent Decree
The problem as illustrated in the article is that you can't fix capitalism with capitalism.
I don't know if G needs to be a fully regulated industry, onto itself, but stronger regulations are needed for sure, and maybe a novel "private public partnership" approach say where there is a government compliance officer at the board level .
iBiz to compete with Google? Ha!
"That might encourage the iBiz to compete with Google – by building its own search engine"
Like MS tried to do with Bing, you mean? Good luck with that. Bing is a joke compared to Big G.
"or acquiring one."
Which one? Microsoft won't sell Bing to Apple. Number three on the list is Yahoo! Which! Is! So! Marginal! It's! Not! An! Option! And the rest is even worse: Ask.com, DuckDuckGo... Take your pick.
So... No.
Re: iBiz to compete with Google? Ha!
The problem here is the expectation that net profits of 25% - 35% are the norm, not the exception. Vey few companies outside of the likes of Google, Apple, Meta make these sort of margins year after year. Even without Google's money, Apple would still be making margins that most companies can only dream of, and they don't rely it - it's not a survival issue, they're just used to it. There needs to be a reset to the expectation that minimum net returns are over 20% or you're a lame duck. The bubble needs to burst
Defeatist option
Maybe we just need to embrace monopolies, and accept that the Weyland-Yutanis of our world are going to end up running the show sooner or later.
Just break up the monopolies and make them either go non-profit, fight for profitability or go under, either way the consumer wins and that's what is important.