March 29, 2023

Google. The future of the internet giant is in the hands of the US courts

In less than three years, Alphabet has been taken to US courts five times – but there are three cases that confirm that something has changed in the relationship between the internet giant and the US authorities. One of the complaints linked, in 2020, prosecutors from 15 states with Texas leading a Google search dominance case. in 2021 it started a second process by supporting 36 states in 2021 and claiming dominance in the mobile app stores. and the most recent case came to light last week, with the complaint filed in court by the Justice Department and eight US states pointing the finger at anti-competitive practices in Internet advertising in general. In the EU, the Alphabet group already holds the record for the heaviest fines for advertising-related practices, but in the US, the latest lawsuits could fundamentally transform the business group we used to call Google.

“The US government knows that in a monopoly there is no competition. There may be a tendency to protect its own companies, as in many other countries, but there is also an emphasis on consumer rights. And there is the interest of the authorities to guarantee free competition, in addition to avoiding monopolies that do not favor consumers and other companies”, describes Paulo Trezentos, executive director of the Portuguese company Aptoide.

For Trezentos, lawsuits against Google are not exactly new: in addition to participating in complaints that may have contributed to the fine of more than 4.125 billion euros in Europe, the leader of Aptoide also cooperated with the US prosecutors involved in the complaint presented from 36 states over practices related to Alphabet’s alleged benefit of the Play app store at the expense of stores such as Aptoide or others that compete to sell apps for the Android operating system (which is owned by Alphabet).

Alphabet responded to the latest lawsuit by questioning the neutrality of the US Department of Justice (DoJ). “The process initiated by the Department of Justice seeks to determine the winners and losers in a highly competitive market such as the ad technology sector. This action largely replicates a meritless lawsuit led by the Texas Attorney General (in 2020) and largely dismissed by a federal court. “The DoJ is repeating the flawed argument that there is a slowdown in innovation, an increase in advertising fees, and that it is intended to make it more difficult for thousands of small businesses and publishers to grow,” Google’s regulatory agencies responded.

The process that began in 2020 certainly fell short of the efforts of the Texas Attorney General, but it was not more than a half-win for Alphabet. In that proceeding, the judges did not prove the charge related to the abuse of power of a partnership agreement between Meta (Facebook) and Alphabet.

In the most recent proceeding, the context and evidence used are different than in 2020. Internal documents used in the complaint filed by the DoJ with eight other states reveal a peer-to-peer warning from an Alphabet executive citing the risks to which the business group is subject due to the concentration of power.

“By analogy, it’s as if Goldman (Sacks) or Citibank owned the New York Stock Exchange,” said this Alphabet executive, according to the latest indictment. which launched the DoJ against Alphabet.

On the other side of the Atlantic, these actions in the courts do not fail to cause reactions. “It turns out that Google (Alphabet) has to play on two boards. In the US, these cases go to court. But in Europe, these processes are not decided by the courts and come from the obligations imposed at the level of regulation”, observes Paulo Trezentos.

The European board proved particularly painful for the fund, but, in turn, the American board could, at the limit, finish what Alphabet is today.

The latest lawsuit, filed in a Virginia court, seeks to force the sale of part of the company responsible for different Internet advertising tools, the New York Times reports.

The possible separation of business units is not exactly new. At the end of President Donald Trump’s term, Congress, which brings together the US legislative bodies, had already launched investigations into the leaders of the biggest technology groups – and the name of the political initiative known as Breaking Up the Big Tech, the big tech companies ”) has already made it possible for some of the big tech brands to even need to divest – through the sale or creation of new companies – part of the business, to avoid monopolies or lack of competition in the market.

On the political circuit, there are those who point the finger at a change in the way the US government, now with John Biden in the White House, has stepped up its scrutiny of the power of big tech companies.

The fact that the Department of Justice was involved in the latest complaint against Alphabet can be seen as a sign of political support for a process that should always be decided in the courts – unlike what happened in the EU, with the application of the fine by the European Commission, which was later confirmed by the Court of Justice of the EU.

In addition to participating in the latest lawsuit against Google, there are other signs that US authorities are aware of the tech companies’ intentions: recently, the Federal Trade Commission asked the courts to block Meta’s purchase of a startup, and before that, asked Microsoft about buying video game maker Blizzard for $69 billion. The political and judicial siege is far from exclusive to Alphabet.

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