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The Analogy
Imagine you walk into a store to buy essentials. When you enter the store, you notice that they place the products offered by a major brand in prime locations, easily accessible to you. Knowing the quality and the relative ease of access, you load those products into your shopping cart without looking for any alternatives.
Now imagine every single retail store in the world stocks its products in the same manner. Every single outlet places the products by this major brand right in front of the store and makes it difficult or unattractive for you to look for other alternatives. Why and how you ask? Well, it is a behemoth earning colossal amounts of revenue. It pumps that money back into ensuring that its products dominate the shelves in the store.
Department of Justice Headquarters, USA
The Case against Google : Search engine or Market Bully?
The case filed by the U. S Department of Justice alleges monopolistic practices by the tech giant. It charges that google enjoys a monopoly in the market for Search and search-advertising, thus making the market uncompetitive. Drawing from the analogy above, Google spends billions of dollars of its revenue in drawing up contracts with manufacturers like Apple and other tech giants to ensure that it is the default search engine on their products. It steamrolls competition by either buying out rivals or pushing vendors to avoid working with rivals. What the DOJ claims is that Google has become the gatekeeper of the internet. With over 90% of all internet searches on its search engine, calling it a dominant player would be an understatement. Its authoritative positions in search and search-advertising sit at the foundation of the company’s extensive advertising, data mining, video distribution, and information services conglomerate. For additional evidence on market domination, many point to the number of companies Google has acquired in the last twenty years. The tech giant has acquired 260 companies buying out the competition and consolidating its position as the market leader.
Although the filing is the first step in a protracted legal battle that could take years, it is a response to the policy question of curbing the growing influence these tech giants have on society.
Google’s Market Share in Q2 2019
The Counterpunch - Google’s Defense
“We aren’t dominant and market competition is one click away”. The company’s defense, based on its recent testimony in Congress, is that it does not force anyone to use its products. It argues that its products dominate the market because of the better consumer experience. It also claims that looking at the general search market is myopic and points to the fact that nearly half of online shopping searches begin on Amazon, another tech behemoth.
It also argues that the deals between Google and other manufactures like Apple are entirely legal. It claims that these deals do not exclude competition in any manner. Users can freely switch to other search engines such as Microsoft’s Bing anytime they want, it insists. Its search service, Google says, is the runaway market leader because people prefer it.
The Indian Angle
Google has had multiple run-ins with the Competition Commission of India (CCI) in the last three years for alleged abuse of its dominant position in the search engine market, the Android smartphone, and the television market. In February 2018, Google was fined Rs 136 crores by the CCI for monopolistic practices in the online search market. It said that Google had “allocated disproportionate real estate” to its affiliates, to the disadvantage of other companies that were trying to gain market access.
In 2019, India’s antitrust body had held Google guilty of imposing unfair conditions on Android device manufacturers in order to prevent them from using other operating systems.
Credit: Wall Street Journal
Why should you care?
Well, for starters, consumer harm can result in several ways. Less competition in the market would mean less innovation and fewer choices in the longer run. The funny part about the abuse of money and power by these tech giants is that we may never see another Google or Amazon due to the moat they are building to consolidate themselves.
These antitrust lawsuits can also mean stricter policies regarding the privacy and protection of user data. The Social Dilemma documentary on Netflix rang an ominous warning bell regarding the disastrous and divisive consequences these Tech companies and their products can have on the social fabric of society. It also raises the bigger question regarding what we must do regarding the inexorable effect technology has to shape markets, disrupt elections, and mould the reality of tomorrow.
In the spirit of promoting competitiveness and advocating for the protection of your data, we urge you to check out search engines like DuckDuckGo that seek to protect your data and Ecosia that saves the environment by planting trees from the ad revenue that it earns from your searches.
