It hasn’t been a happy 25th birthday for Google, the search giant and now Android maker which goes on trial this week for monopolising the online search industry.
In a court case originally lodged in 2020, the US justice department is suing Google in the most consequential attempt by competition authorities to unravel the immense power of big tech. The last time this type of antitrust case was heard was 20 years ago against Microsoft, then the mightiest power in the computing industry.
Now Windows is part of its Azure cloud computing division, which is second to Amazon Web Services in size. Microsoft’s own search engine, Bing, is a distant also-ran to Google but is getting a new lease of life though the Seattle-based firm’s investment in OpenAI and its ChatGPT generative artificial intelligence software. It’s amazing what $10bn will get you.
Microsoft’s competitive advantage of owning the desktop operating system is a thing of the past, with Google taking over that mantle for mobile. Its Android operating system runs on more than 90% of smartphones, and its Play Store for apps is the subject of a number of anticompetition lawsuits.
This week’s case is the biggest attempt since that Microsoft lawsuit, for the now seemingly quaint crime of using its Windows dominance to squash then nascent browser Netscape. Yeah, that long ago.
The case was brought by the justice department and several state attorneys-general, who will argue that Google stifled innovation and therefore cost consumers more. There are two major issues they are suing over. The first is that Google broke antitrust laws by locking browser makers — read Apple and its Safari browser — into using its services.
The phrase ‘surveillance capitalism’ was literally created to describe its business model, as well as that of Facebook
In 2020, when the lawsuit was filed, Google paid Apple $12bn for search exclusivity on iPhones and iPads — a “significant revenue channel”, according to a Google document the justice department quoted.
The search giant’s own estimates calculated that half of its searches in 2019 came from Apple devices. Google’s payments to Apple grew to $15bn in 2021 and $20bn in 2022, estimates US analyst Toni Sacconaghi. Talk about slate capture.
The other important aspect in the lawsuit is how Google puts pressure on smartphone manufacturers to preload its apps and services (including the Play Store, Maps, Photos, Drive and Docs). An Android phone running Google Mobile Services plugs straight back into Google’s services, along with all the juicy personal and location data it’s so desperate for in its search business. Previous lawsuits have argued Google continued to track users even after they opted out and, in some cases, even after they had done a factory reset on their device. Google is not a first-time offender.
The phrase “surveillance capitalism” was created to describe its business model, as well as that of Facebook.
Google is going to have a hard time arguing against either of these because, well, it did exactly that. All that is in contention is whether monopolistic control is good or bad for innovation and consumer rights. The answer is clearly no. No monopoly is good for anything. Just ask the ANC about governance.
*Shapshak is editor-in-chief of Stuff.co.za and executive director of Scrolla.Africa
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