What has Google done wrong to earn the ire of so many state attorneys general? Well, the politicians aren’t totally sure themselves. And that raises concerns about the scope and purpose of their antitrust investigation into the technology giant.
While the initial probe will focus supposedly on online advertising and the search experience, The Washington Post notes that a news conference on the steps of the Supreme Court saw “a raft of additional concerns,” including the way “Google processes and ranks search results to the extent to which it protects users’ personal information.” What all this has to do with antitrust law is fuzzy. The Post quotes Sean Reyes, Utah’s Republican attorney general, as saying there is a “presumption” of innocence in such an investigation but also a “pervasiveness” to complaints about Google’s business practices.
Oh, there are assuredly many complaints. As The Wall Street Journal reported last June, “In industries from news to travel and online shopping, Google’s competitors are readying documents and data in anticipation of meetings with the Justice Department, according to industry representatives.”
But the goal of American antitrust doctrine is about protecting consumer welfare rather than competitor welfare — if those competitors are less competitive and “need higher prices to survive.” But many critics would love to change that baseline presumption and expand it to a host of other factors, many of which are probably better left to regulators.
Even the online advertising issue is odd. Is Google’s unshakeable ad market dominance really a big problem? It was described this way by the WSJ after Alphabet’s first-quarter earnings report: “Google’s once-untouchable online-advertising operation took a body blow, hurt by mounting competition and struggles within its increasingly high-profile YouTube unit.” (The company also saw an 11 percent decrease in cost-per-click on Google properties over that same period.) Moreover, AdAge reports that the Google and Facebook advertising duopoly “is losing some of its advertising dominance, albeit a very small amount … Google will fall to 37.2 percent from 38.2 percent last year, while Facebook will slip slightly to 22.1 percent from 21.8 percent. … But the big winner of 2019 is expected to be Amazon, which continues to siphon share from Google and Facebook.”
Markets are gonna market. And as I have written, “Will hefty fines and, say, better ad placement for Yelp and TripAdvisor, be punitive or radical enough given the dramatic complaints of some activists and policymakers?” We’ll see what this investigation into a great American company (nearly $30 billion in annual profits, 100,000 workers, and a $700 billion market cap) that supplies massive value to consumers and innovation to the economy turns up.