FEON WONG | LEGAL JARGON WRITER
Following the House’s report that deemed big tech companies as having ‘too much power’, the US Justice Department is bringing Google to court, alleging that the tech behemoth harmed competition through distribution agreement. This essentially means that Google pays other companies to prioritise its search engines, thereby locking out competition.
This lawsuit is centred on the online advertising market where Google is being accused of utilising its vertical integration to win advertising auctions and engage in bid rigging to block competition in the online advertisement market. As the technology provider, Google was said to have gained unfair advantages for its real-time advertising auctions as it is essentially ‘trading on insider information’. According to Dina Srinivasan, a researcher at Yale, this amounts to conflict of interests, akin to those in financial markets, that should be minimised and not tolerated.
Google had also engaged in bid rigging when it granted Facebook advantages in auctions in return for Facebook discarding its new online-advertising bidding system that would pose a threat to Google’s business.
This accusation concerning Google’s anticompetitive behaviour was initiated by Colorado alongside New York, North Carolina, Arizona, Iowa, Nebraska, Tennessee and Utah. The accusation focuses on search engines and claims that Google has prevented competition by using its financial resources to dominate the market. An example that illustrates this, not yet denied Apple, is the billion dollars deal struck with Apple to make Google the default search engine on IOS devices.
In addition to that, Google was also criticised for its ability to collect vast amounts of data as this ensures the company an unfair edge against its competitors. This is seen in the voice assistance market where Google excludes competitors’ virtual assistant technology from devices that adopt Google Assistant.
It was no surprise that Google refuted the aforementioned claims, citing them as ‘deeply flawed’ and arguing that the competition in the market is fierce. It also maintained that its operation harms no customers and that customers are free to use any alternatives provided by its competitors. Nonetheless, it seemed that the rationale behind antitrust case is shifting from consumers’ benefit to market fairness. This translates into the understanding that merely causing no harm to consumer welfare is insufficient; rather, how the company maintains its dominating market positions and whether by doing so it hurts upstart competitors, have become the main questions.
LLB student at The London School of Economics | Communication Officer at Japan Society at LSE
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