Typing “Google antitrust” into your browser this week yields some very interesting results — but it’s wholly possible your results will be delivered to you through Google search, into a browser made by Google, on to a phone or computer running Google’s very own operating system. Such is the scale of the modern Internet giant.
Comfortingly, the company has made no effort to hide this particular story from its own search results: currently the first result you will see is that Google is facing a huge and likely years-long legal battle with the EU competition commission over how it presents some of its search results.
Google is such a fixture of any Internet user’s life, it’s easy to forget how quickly it has grown, how dominant it has become, and how strange a company on that scale in the “real” world would seem.
Google has, by some measures, almost 90 per cent of the global search engine market — a service used by billions of people daily — while its nearest rival, Bing, has less than 5 per cent; Gmail is the second most-used e-mail service after Hotmail; its mobile software, Android, has 76 per cent of the smartphone market; and Google-owned YouTube is the overwhelming leader in online video, dwarfing Netflix.
In virtually any major online activity, Google is either the number two or number one player, often commandingly so — and that’s before we consider it has photographed the streets of many of the world’s cities, is building self-drive cars, and — before we forget — takes tens of billions of revenue each year by being the world’s largest online ad seller by far.
Compared with the scale of Google’s reach, the EU’s challenge seems almost trivial: it centres on whether Google’s presentation of e-commerce search results favours its own shopping service over rivals. A second mooted investigation would be somewhat wider, focusing on Android.
The spotlight might be on small parts of Google’s empire, but the fight is a deadly serious one: EU authorities have the power to levy fines of up to 10 per cent of Google’s revenues, which topped $45 billion in 2014, and to order the search giant to change its behaviour, including, in theory, changing how some of its results are presented.
Google has made clear that it intends to contest the charges, vigorously. The fight will likely be long, bloody and entertaining for those who like that sort of thing. But it also highlights some of the stark realities of the Internet era.
Perhaps the most pressing is that in reality there are very few government bodies in the world with the scale to truly hold the largest Internet giants to account — perhaps only the U.S. and the EU. The companies can move their servers, their regional offices and their headquarters with relative ease. It’s only those places with enough customers to be irresistible that can try to enforce a rule book.
Second, there’s no indication that the EU will win: given the relative stakes, and budgets, there’s every chance that Google will out-lawyer the regulators. The EU’s combative approach comes from its new commissioner, Margrethe Vestager, who has ripped up a putative settlement negotiated by her predecessor that would have staved off further legal battle. Regulators across the world will be watching to see whether the new high-stakes approach pays off. If Google wins here, others may be deterred.
The main significance of the battle is as a scene-setter: Google is just the start, as the business models of the Internet lend themselves to monopoly. Such is the nature of feedback loops: get enough users searching and clicking each day, and you have an incredible source of information of what people are really looking for, which you can use to make your search better. That’s hard to compete with.
In social networks and messaging apps, the effect is even stronger. These services work out for users only if lots of people they know are on them. Get big enough — like Facebook — and a rival has to do something spectacular to have a chance of beating you.
We are entering an era of near-stateless global giants, several of which will gain the power to act as a monopoly. The world’s legal systems are not ready for such a thing: philosophically, different countries have different levels of concern. Traditionally, U.S. regulators have been relaxed about companies gaining large market share provided they don’t use their market power to get advantages in other sectors. European regulators have generally stepped in earlier, capping share.
For all their promise of openness and equality, the technologies of the Internet also promote the creation of giant companies. The question facing us as a society is what trade-offs we make: does the bigger danger lie in allowing the creation of unalloyed corporate power, or in curbing technology’s potential to prevent it?
The question could become moot: in practical terms, if Google trounces the EU on all counts after several years, few other competition authorities will want to take on the company, and they may even be deterred from pursuing other Internet behemoths. A decade or so without a challenge may make a new normal near irreversible.
Technology has made the Internet the ultimate monopoly machine. It’s up to those who make and enforce the law to decide what they want to do about it.
© Guardian Newspapers Limited, 2015
