Challenging Big Tech
The internet has been a powerful source of innovation and opportunity in the half-century since the first electronic message was sent between experimental nodes at UCLA and Stanford. And in some industries, it remains a great equalizer — giving upstart creators and service providers the sort of access that used to be the exclusive province of big corporations.
That’s why policymakers in the United States have been loath to intervene online, worried that any rules they set would be counterproductive or quickly rendered obsolete by the rapid pace of change. “Don’t regulate the internet” became a frequent rallying cry, and for the most part, lawmakers and governmental agencies handled the emerging online powerhouses with kid gloves.
The gloves have now officially come off. The U.S. Department of Justice filed a much-anticipated lawsuit Tuesday accusing Google of abusing its dominant position in online search and advertising to cement its market power. The lawsuit, which was joined by 11 state attorneys general, is likely to be just the first in a salvo of antitrust cases, legislative proposals, rule-makings and other governmental initiatives to rein in Big Tech companies.
We won’t prejudge the Justice Department’s allegations that Google unfairly blocked competitors and raised the cost of online advertising to the detriment of consumers across the country. But we can’t help but notice the similarities between the case against Google and the Justice Department’s successful antitrust lawsuit against Microsoft in the late 1990s, when the software giant used its deals with computer manufacturers for the Windows operating system to impede competition in the emerging areas of web browsers and digital media players.
According to the Justice Department’s complaint, Google has used exclusive contracts with manufacturers and mobile phone services to make sure Google would be the default search service on browsers and mobile devices, and to guarantee that its apps would be placed prominently on products’ screens. This conduct led it to control more than 90 percent of the searches, the complaint alleges, while also buttressing its dominant position in online advertising.
Google defended its actions and argued that consumers are free to choose other services for their searches.
Failing a negotiated settlement, the courts will ultimately decide whether Google’s behavior crossed the legal line. But with California and three dozen other states still investigating Google, there will almost certainly be more cases filed, just as there are more concerns about the company than the Justice Department addressed, including whether Google competes unfairly by favoring its own products (such as YouTube and Google Maps) in its search results, and whether Google inappropriately uses its advertising network to boost its own products by collecting data from consumers on competitors’ sites.
The lesson of the Microsoft case that seems apt here is not that it’s illegal to be big and successful. It is that once a company reaches that pinnacle, the aggressive tactics it used to grow and succeed can no longer be used to maintain its dominance. Monopolies aren’t necessarily illegal — efforts to preserve them are.
* Guest editorial from The Los Angeles Times in Los, Angeles, Calif.