A historic lawsuit – but only the beginning of the tech fight

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SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on October 27th, 2020.

He that seeks – he shall find, with the help of Google. That is why the company is getting sued in what has been called a historic case in the United States. What is striking, however, is everything that the lawsuit does not focus on – that which will constitute the real conflict between politics and technology.

When you search directly in the browser on your computer or mobile phone, it is probably Google that delivers your search results. This simple mechanism is worth billions of dollars. And it is the one that forms the basis of the new lawsuit that the US Department of Justice has filed. It claims that Google is acting in an anti-competitive manner, specifically with the billion-dollar agreements with companies like Apple and Samsung in order to be the users’ preset search engine.

Google responded unsympathetically – and compared itself to breakfast cereals in the grocery store. The cereal company pays the store for a better placement on the shelf, and Google claims it is exactly the same here. Additionally, you can change the settings of your browser to use another search service. Or for that matter, just enter the URL of a competitor instead.

The lawsuit is being referred to as historic. On the other hand, there are many indications that it is only a prelude of what is to come.

Google has, as should be noted, been in political turmoil in the past for precisely these types of anti-competitive offenses. In 2017, the European Commission fined the company $2.7 billion for abusing its dominant position in, among other things, its own shopping service.

As is well known, there is no major consensus in American politics, and has not been for many years. However, the question of whether tech companies have gained too much influence and power is one of the few that both Republicans and Democrats have pursued. Leading politicians from both sides have expressed their support for splitting up companies like Google and Facebook.

Thoughts have therefore been put forward, including from the two senators and former presidential candidates Elizabeth Warren and Ted Cruz, about blocking new major corporate acquisitions to avoid monopoly-like situations. Or to just divide the companies that already exist to create more competition in the market. In such a scenario, Facebook could have to sell Instagram, or Google could have to get rid of YouTube.

Because there are so many angles of attack on tech companies from a political perspective, it is surprising that the lawsuit is so limited in its scope.

Here are three major areas that the lawsuit could have focused on instead of just focusing on Google’s alleged monopoly in the search engine market:

Firstly, the consolidation of power that has taken place through acquisitions. Google has acquired more than 200 companies since 2001, including YouTube, which is itself one of the world’s largest search companies, albeit in video. Has Google simply become too big, and through it too powerful to compete with?

Another area is the integration from different parts of Google, such as data from, for example, Google Maps and Android, which affects your search results and ads. Has it been clear enough for consumers that the data is used in that way?

A third area is the presentation of the company’s own search results, which was what the European Commission fined Google for. How does Google display its own services and search results, compared to how other companies are presented?

All three points have been the subject of criticism, but are not mentioned at all now. It probably has to do with timing before the election, rather than the importance that the Justice Department gives it.

These questions may well be added to future court cases. And that is precisely why things run a risk of becoming chaotic in the future, as is often the case when politics has to catch up with technology.

As the issue of tech companies’ power and influence has come up on the political agenda, their presence in Washington has also increased. A review by the Washington Post showed that their lobbying efforts over the past ten years can be summed up to about half a billion dollars, with a clear increase in recent years. This is a trend break from a Silicon Valley that largely stayed away from traditional politics for many years.

Most startups in Silicon Valley started entirely without political ambitions. But in connection with the enormous success they have had – especially in the consumer market – it is difficult not to become a power factor, whether you want to or not. Many companies have therefore been forced to deal with issues that they never intended to be a part of.

Both Facebook and Twitter recently took action to reduce the spread of a controversial New York Post article. It can be seen as a way to avoid criticism to spread potential inaccuracies, but even that decision was criticized.

Silicon Valley has had a long honeymoon where enormous values have been built by engaging in activities that have been a little too complex for politicians to have to react. That time is now over. But it remains to be seen how much of the power will eventually be taken back from California to Washington again.

There is no doubt that the tech giants have the means to fight back. As the New York Times writes, Google has nearly $18 billion in cash to contend with and to get the best lawyers. The budget for the Justice Department’s anti-trust division? $167 million.

This analysis was first published in SvD Näringsliv, in Swedish, on October 27th, 2020.

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