Trump Administration, Antitrust Officials Take a Stab at Big Tech’s Predatory Business Practices

June 9, 2020 Updated: June 9, 2020

Commentary

President Donald Trump’s executive order on preventing online censorship adds momentum to the growing movement to rein in the monopoly power of today’s Internet giants.

An unprecedented concentration of power gives a few private companies the unchecked ability to shape the public’s interpretation of events by censoring information or making it disappear altogether, effectively controlling what people see or do not see.

At the same time, after years of investigations, the Department of Justice (DOJ), the Federal Trade Commission (FTC), and a coalition of 50 attorneys general from 48 states, the District of Columbia, and Puerto Rico appear ready to file antitrust charges this summer against Google.

It’s about time. In 2019, Google’s online advertising business comprised a whopping 37 percent of the almost $130 billion U.S. digital ad market. This substantial level of market share hasn’t come organically; it’s arisen due to predatory activity that the company has used to squash its less-connected rivals.

For example, as a condition of purchasing YouTube ads, Google forces advertisers to use Google products. Given that YouTube has 2 billion monthly users and is by far the most prominent online video player by audience size, the big tech conglomerate effectively holds the marketplace captive, providing little room for competition.

Things are getting worse, not better. Take the recent example of Google announcing a ban of third-party cookies on its Chrome browser. Cookies are small files placed on users’ computers as they search the web, allowing advertisers to pinpoint their likes and dislikes and tailor their ad experiences. Of course, the collection and retention of this data is crucial for Google’s ad monopoly. If the AGs and federal regulators don’t soon intercede, the company announced that it will stop allowing third parties from operationalizing cookies independently—meaning Google itself will control this marketplace entirely.

As Rachel Bovard, a senior adviser to the Internet Accountability Project, made clear, “Any business that wants to advertise on Chrome, which has close to 70 percent of the global browser market share, will be forced to use Google products.” This cookies ban will certainly support the company in its quest to increase its footprint in digital advertising, but it won’t help the competitive market and certainly won’t benefit consumers at large.

In addition to examining Google’s predatory ad practices, the Wall Street Journal reported that the Justice Department is also closely monitoring the meteoric rise of the Internet search segment of its business. This makes sense, because the two are inherently intertwined.

Look no further than the company’s alleged copying of about 11,500 lines of code from Java to create Android, its mobile operating system. According to Forbes, earlier in the decade, as mobile Internet searches quickly began to overtake desktop searches in popularity, Google scrambled to gain better footing in the mobile marketplace. It ultimately did so by lifting that IP from Java (now owned by Oracle) so it could launch Android, naturally installing Google as the default search engine.

Google’s steamrolling of its competitor has allowed it to now amass around 75 percent of the global smartphone market while giving it the leverage it needed to pay off Apple to make Google the default search engine on the iPhone. All of which has come at great benefit to its ad business.

As Adam Candeub, law professor of the University at Michigan, wrote at Forbes: “Google has used Android to favor other verticals as well, like YouTube, Gmail, and Google Maps. … Android’s rise was necessary for Google to entrench its market power across search, advertising, data, browsing, email, and other platforms. And this dominance would not have been as easily or profitably achieved had Google paid the license for the [Java] APIs in the first place.”

The Supreme Court will hear oral arguments this fall in Oracle’s copyright lawsuit against Google, and the Trump DOJ already filed a friend of the court amicus brief against Google in this case.

While Google v. Oracle has the potential to right this isolated case of wrongdoing, it’s the DOJ, FTC, and state AGs that have the power to implement measures that can create sweeping, company-wide operational changes and stop the anti-competitive practices from continuing. And with reports now stating that they are ready to file antitrust charges this summer, it’s becoming increasingly likely that numerous instances of the company’s predatory activity will soon be stopped.

It’s pathetic but not surprising that one of the world’s highest-valued companies is resorting to strong-arm data practices and even copying to become even more powerful. It’s long past due for the government to intervene.

Curtis Ellis is policy director with America First Policies. He served as senior policy adviser on the 2016 Trump-Pence campaign, on the presidential transition team, and as special adviser to the U.S. Secretary of Labor in the International Labor Affairs Bureau.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.