For anyone that uses the internet, or tech products more broadly, this week is set to be momentous. It’s the kickoff for a major legal challenge in the form of an antitrust trial being levied against Google by the United States Department of Justice. The DOJ is arguing that Google has wrangled a monopoly in search through exclusivity deals, effectively crushing the competition at every turn.
But how does that impact you? And why should you care?
Well, before we dive into the details, it’s important to get some context as to the changes and challenges that are occurring all around us, in real-time. This isn’t just another boilerplate senate hearing about some Big Tech blah blah that will be out of the news cycle in a few months. It’s been brewing a lot longer than that, years even. Google and parent company Alphabet aren’t alone in finally facing some actual scrutiny for their monopolistic behaviour.
Apple, Meta, Amazon and Alphabet are all in the crosshairs of US Lawmakers. But the US isn’tt the only jurisdiction concerned with Big Tech’s seemingly boundless impact on consumers, markets and the fabric of society writ large. Jumping across the pond, the European Commission have added other familiar faces, like Microsoft and ByteDance (developers of TikTok), along with 22 core platform services that have been designated as digital “gatekeepers” of business and consumer interests.
On the list are apps, services and platforms that are virtually ubiquitous, with user counts in the billions. Take note if you currently use Instagram, Google Search, YouTube, iOS, Android, Windows, WhatsApp, Amazon, TikTok or Chrome. If you are reading this, you’ve likely encountered at least one of these today, if not right now to consume this content.
Regulation of Big Tech will change how you use the internet (including your phone)
It would be awesome if huge, for-profit companies effectively policed themselves and acted with the interests of people first and foremost. But what I’ve just described is more akin to the description of a well-functioning government than a well-intentioned corporation (who are few and far between).
That’s where regulation, oversight and policies that safeguard consumers and markets come in to play. And there are plenty of examples of tech regulation benefiting everyday people, like you and me, that we can draw from to illustrate this case. But, in an ideal world, the industry itself will self-regulate, which is what many hope will occur in the fast-paced field of AI, where talks have quickly gathered steam. After all, it would be good to have one less existential crisis to navigate.
But back to my point. When companies play ball, you end up with consortiums and coalitions that drive standards like Bluetooth, and to a lesser degree, HDMI. And when you don’t, you end up with whatever the hell was going on with USB for the last decade. Even though it is accepted as a standard, the specs got out of hand between all the different manufacturers and companies who pushed their own agendas.
Fortunately, we are nearly at the point where I no longer have to explain to friends and family the difference between USB 1, 2, 3, 3.1, 3.2, Type-A, C, micro or mini. Oh, looks like you fried your headphones when you plugged them into this blue USB port. Next time use the standard, non-fast charge USB port. No, not the yellow one, the one without any colour. E-reader isn’t charging? Looks like you’re using a data-only cable instead of one with power-through-put. How do you tell the difference when there’s no visible markings on the cable? Good question… Add to that things like the USB super-spec of Thunderbolt and Apple’s proprietary Lightening standard, and you’ve got a right mess on your hands.
Turns out I wasn’t the only one miffed at the state of cables and ports in USB-land though. Yesterday Apple unveiled its new lineup of iProducts, complete with annual spec bumps and colourway refreshes to the iPhone. Oh, and it now charges via USB-C.
Wait, what?
That’s right. In a ‘blink and you’ll miss it’ moment, the world finally got the answer as to how Apple was going to handle the shift to USB-C with a small nod during their recent product event. To quote Kaiann Drance, VP of iPhone Product Marketing, “USB-C has become a universally accepted standard. So, we’re bringing USB-C to iPhone 15”.
What she meant to say was, “the EU recently mandated that USB Type-C is to become the standard for small and medium-sized portable electronic devices sold in that region by 2024, including iPhones, iPads and AirPods. They said, no more proprietary cables… so, we complied”.
And it’s awesome that they did. The point of the policy wasn’t to punish Apple, but to put a stop to the silliness of having so many different ports, cables and single-use “standards”, which are standards (in name only) across an individual company’s product line. Sure, this might be frustrating for that one person without a USB-C cable on hand, but if they walk around the block they’ll probably find one discarded on the street. And that’s the other benefit here – cutting down on e-waste. Standardising on a port and cable means less messing around for consumers, and less mess in our landfills. Now you can keep the same charger, cable and wall outlet when you upgrade or purchase a new device, no need to dump any of that. A major win, especially when you consider the hundreds of millions of devices the company sells each year.
Less cost, less frustration, more sustainability.
Google’s searching for a win here
Jumping back to the current case ahead of Google, the DOJ is arguing that the search provider is operating in a less than sustainable manner when it comes to fair competition, which will lead to more cost and frustration in the long run.
Ultimately, the question being asked is, did Google Search get so big because it was so good, or because it unfairly locked out the competition?
According to the DOJ, it’s a matter of earning your dominance versus buying it. And it’s not hard to see that being played out all around us. Google is the default everywhere. It has become a verb, which is honestly something I’ve always been uncomfortable with uttering, unless I’m talking about the product itself. I mean, why should I give a brand free advertising and mindshare? It would be like saying “I need a Coca-Cola” whenever I referred to any sort of drink I was after. Why add to the monopoly, when “search the web” or simply “search for” is much more fitting… and deliciously neutral.
But should the big G be penalised for being at the top of their game?
Out of the box you don’t have a say in the transaction. Click the icon, enter the search term, and you’re Googling.
Maintaining a dominant position through anticompetitive means equates to violating antitrust law. In practice, part of that includes making deals with Apple, Mozilla (Firefox) and others to be the default search provider. When that happens, the consumer is caught in the crossfire. Out of the box you don’t have a say in the transaction. Click the icon, enter the search term, and you’re Googling. Those hundreds of millions of people buying new iProducts each year will get to enjoy USB-C and the gift of Google on their devices.
Now, it’s not illegal to be so damn good at what you do so as to become a major player in terms of market share. If it was, many CEO’s and senior leadership teams would have to rip up their playbooks right now. And there’s a reason why Google rose above the Yahoo’s and AltaVista’s of the past, innovative thinking that lead to a quality product. It’s one of the factors as to why Yandex and Bing can’t put a ding in their market share. Playing catchup in a rigged game is a losing proposition.
What is illegal, however, is to keep other companies from being able to fairly compete and challenge your dominance, which is what the DOJ is suggesting. By being the default search experience in such a meaningful way, the allegation is that Google is no longer an active choice. People are just ushered toward its results.
Why should anyone care about this trial?
Google will likely argue that people can change search providers if they want to, and that is true for those savvy, or caring enough, to update their settings to another provider. But, as mentioned, ‘Googling’ (cringe) has been a thing for years now and it is very much a reflexive behaviour. Indeed, in most circles, to search the web is “to Google” something.
Want to do a fun little experiment? Change the default search provider on someone’s desktop browser (or phone) and see how long it is before they notice. From experience, there are a few people I know who still haven’t changed it back to Google (or seem to care at all for that matter). To them, the results they get back are ‘Googled’, even if there is a giant Duck or Bing logo at the top of the page.
So why does the US Government care if a US company is making money? Because it could theoretically stifle innovation across the industry, setting the country back in the all-important tech race against competing nations and the world stage itself. Potentially giving up lots of money (and power) for the sake of some money now. Also, it would be beneficial for consumers to have more choice, help small businesses and innovative startups grow and make for a healthier (and larger) overall search marketplace.
Imagine if back in the day, some obscure bulletin board grew so big and powerful and then started to pay the dialup internet service providers to load up their installation CD’s with software that took people to their own messaging boards instead of allowing them to search Google or Yahoo or Ask Jeeves.
Wait, I think I just described Reddit.
The point is, the DOJ is concerned that right now they could be missing out on “the next Google” by allowing one giant company to squeeze out the competition through deals and favoured nations clauses. But what does it look like if they are right, and Google loses this one?
For starters, Google will be asked to knock it off and stop with the deal making and anticompetitive behaviour. At the other end of the disciplinary spectrum, they might get broken up, or asked to spin off Search into a separate and independent company from Google. That would likely cripple Alphabet, as Google’s Search is still a massive part of their economic engine. It’s what powers the company’s ad business, raking in over $58 billion USD last quarter. Chopping out that financial leg turns the Alphabet chair into a unicycle. So you can imagine that any verdict will be taken very seriously.
As the case continues over the next ten weeks, we’ll likely hear from Sundar Pichai, the CEO of parent company Alphabet, along with other internal decision makers, and external partners who’ve taken Google’s deal. Statements from the latter will be of most interest – how will they justify or rationalise their current relationship? Perhaps by arguing that Google provides the better search experience, although that is becoming more questionable by the day, especially with AI and SEO spamming threatening to derail their entire business model.
Your search experience may change (and that’s a good thing)
If you follow Google’s rules, you’ll rank higher, get more traffic and make more money.
For everyday folk, it could mean lots of things. For starters, Google has a massive say in how pages are indexed and what’s ‘good’ and ‘bad’ when it comes to the act of search engine optimisation (SEO) for websites. This includes things like backlinking, the size of images, placement of headings and a bunch of nuanced (and constantly changing) guidelines that SEO experts have deciphered and now making a living consulting businesses on. To put simply, if you follow Google’s rules, you’ll rank higher, get more traffic and make more money.
Sounds good right? Well, truth is, it’s complicated. On one hand having some sort of ‘soft’ standards has helped to verify the credibility of websites, but on the other, it’s slowly turned the web into a homogenous cluster of similar-looking pages, especially as everyone scrambles to follow the latest best practices and format their content accordingly. Even this article has been created with SEO in mind, though admittedly it takes a backseat to the quality of the content, which is a priority we refuse to compromise.
And at the extreme end, you have SEO spamming (aka spamdexing). That’s where website authors seek to game the system and use every trick available to rank higher, chasing the all-important front-page placement in Google’s search results. In those instances, content is an afterthought. We’ve all been there, searching for something, clicking on one of the top results and being taken to a page that doesn’t really mesh with what we were after. Instead, it’s stuffed with high-ranking keywords, misleading headings and a megaton of ads.
Part of this is Google’s fault.
See, without diversity of thought, we are forced to follow the recommendations of a single company, and that makes for an arguably worse experience for everyone. SEO spammers are doing more and more to gunk up the system. It’s gotten to the point that appending the word ‘Reddit’ to your search query will likely get you an answer from a forum of human experts, rather than a bedroom marketer looking to shovel schemes at you.
Perhaps having another two or three dissenting voices to challenge Google’s ideas about search may have a positive impact and lead to a better overall experience for users and businesses alike. But with a market share of over 90%, who’s in a position to challenge them?
Well, turns out it’s more than just the Department of Justice.
Open the gates and unlock innovation
Earlier I mentioned that the European Commission is also looking closely at Google and the band of Big Tech players with their new Digital Markets Act (DMA). As part of this, they have identified several services, including Google Search, Google Ads and YouTube, as being “gatekeepers” to the digital world. Those on the list have been deemed as acting as entrenched middleware that people and businesses have no choice but to utilise in order to wander about the digital landscape and participate in online activities.
In other words, these services have become utilities. And just like your water, power or internet service provider, there are strict rules that govern how utilities operate in order to ensure the consumer is not harmed and a thriving ecosystem of companies can co-exist in a fair market.
The criteria for meeting the “gatekeeper” requirements includes being so large that you impact the market, control an important pathway and maintain a dominant position over a period of time. And if you’re on the list, you have six months to comply with the DMA obligations – namely, behaving in a way that allows the markets to be more open, fair and competitive. For Google, that means offering users a choice of search engines instead of defaulting to an agreed upon search provider per a lucrative deal (the current situation).
That’s something that Microsoft had to abide by after the EU mandated a similar “browser ballot“, whereby Windows 7 users in the EU were given a choice of which web browser to use. This came about when Microsoft was found to be anticompetitive by bundling Internet Explorer with Windows.
If something like that goes through, people will actually be empowered to make a choice as to where they get their information from.
And the parallels with Microsoft don’t end at the browser ballot. In fact, they go much deeper than the 2007 case of browser choice in Windows 7.
The lasting impact of recent regulation
Let’s jump back to a bygone era, one of flip phones, dialup internet and CD-ROMs. I’m talking about the 90s, a time of youthful innocence and optimism in the world of digital technology. But the sparks of innovation were nearly squashed before they could ever ignite an industry.
Microsoft was riding high on the popularity of its Windows operating system, having achieved a dominant position in the market. Chances are, if you had a computer at home or at work, it was a PC running Windows.
And then the internet happened, and web browsers became a thing. Mosaic, then Netscape Navigator, and the Microsoft’s own Internet Explorer came bursting onto the scene, allowing people to navigate the new-fangled world wide web. At the time, Netscape Navigator was the more popular and technically advanced browser. Whilst Navigator cost a few dollars (which may seem odd now, but was how the business supported itself at the time), Microsoft decided to bundle IE for free with Windows. That became a problem for other companies pretty quickly, because if every computer already had a browser, why would you pay for another one?
The US Federal Trade Commission and later the DOJ argued that this was anticompetitive, along with Microsoft’s dominance of the personal computer operating system market, that it was indeed a monopoly, crushing competition from Apple, Java, Linux, Netscape and others. The judge ultimately found Microsoft guilty of this, and the company was asked to split in two.
After a successful appeal, Microsoft reached a settlement whereby it would share deeper access to its software with third party developers, and agree to an oversight board who would monitor its compliance with the ruling.
Unfortunately, the damage was done to Netscape, who would not recover from the market share they lost to Microsoft, being snapped up by AOL and Navigator discontinued a few years later.
But from the ashes of this browser war came a whole tide of innovation. We saw Netscape’s spiritual successor, Mozilla, launch their revolutionary Firefox browser. Along came Google with it’s suite of internet products like Maps, Gmail and Chrome, who’s early success later led to Android. YouTube and social media platforms were launched and thrived. Apple had room to grow and space to breathe, partly funded by an injection of $150 million USD, from of all people, Microsoft. With the Redmond giant being told to sit in the naughty corner, suddenly the rest of the room was free to grow, shine and innovate. Instead of one tech company ruling the roost, there are now about a dozen big time players and a whole galaxy of smaller companies in the wider industry. Microsoft itself is bigger than it ever was, passing a market capitalisation of over $2 trillion. When everyone plays nice, everybody wins.
It’s wild to think that the apps and services you use today may never have been developed if Microsoft was not regulated.
And funnily enough, one of the big winners here could be Microsoft, who’s Bing search engine powers a fleet of other search providers, including those with special focuses, like Ecosia (sustainability) and DuckDuckGo (privacy). Though they are clearly in second place with 3% market share, even a 1% gain would result in millions of dollars in revenue and a slightly larger counteracting force to the dominance of Google that could better serve users and businesses when searching the web.
It’s refreshing to see governments around the world finally go after Big Tech companies, specifically those with such dominant positions who are exerting monopolistic behaviours. It’s time to allow others the chance to compete fairly, to return to that exciting time in the 90’s when anything seemed possible and innovative new companies like Google were springing up left and right.
And just because you can’t see innovation right now, doesn’t mean it can’t happen. You or I might not be able to imagine the next big thing, but someone out there likely is already drafting ideas that could revolutionise our digital lives.
It’s time we afford them the opportunity to turn those dreams into reality on a fair and level playing field.
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