Introduction
Google has become an indispensable assistant for billions of people around the world. The tech giant won the approval and trust of users but also became the target of public criticism for privacy issues, unfair competition, and the provision of irrelevant information for search queries. In 2020, the US Department of Justice initiated an antitrust case against Google, alleging the company’s search engine market dominance. This paper will address Google’s antitrust dilemma, which reveals the company’s ethical dilemma in which the welfare of the majority is achieved by ignoring moral norms.
Company Description
Google is the undisputed leader in the digital technology market and, with Apple, Amazon, and Facebook, forms four Big Tech corporations. In addition, Google is the most potent advertising company on the planet. Google’s parent company, Alphabet significantly outperformed in the last quarter of 2021, increasing revenue by 32% to $75 billion, delivering a jump in its share price (Markman, 2022). Google’s longstanding if unofficial motto was “do not be evil.” The corporation is famous for its high corporate culture and is considered one of the world’s best employers.
The Legal Issues and Regulatory Environment
Dominating several markets, the tech giant has become a target for suspicions of antitrust violations. The cases focus on Google’s non-search advertising products such as Google Drive, Google Mail, Google Calendar, and its search-related advertising business, for which Google is best known. In October 2020, the Department of Justice (DOJ) opened an antitrust case for violating the Sherman Act. Eleven state attorneys general joined the lawsuit.
The DOJ’s Position
The main argument in the case alleges that Google actively prevented its competing search engines from getting into the marketplace through anti-competitive tactics. One such example is a detailed complaint that shows how Google has gone to great lengths to ensure they are the default search engine on smartphone web browsers (Department of Justice, 2020). Google paid Apple up to $12 billion annually to keep its search engine Apple’s default search engine across its entire product base.
The plaintiff alleges that the tech giant used its vast reach to discourage competition in internet search and internet advertising, which ultimately allowed it to remain a significant player and grow further with minimal interference from smaller companies and firms in their related fields markets. According to the plaintiff, the dominant position of one company in the market hindered the development of innovations in the area (Department of Justice, 2020). The listed data should be treated critically and with a share of skepticism since court hearings will begin no earlier than the fall of 2023; at this stage, Google denies all allegations.
Google Position
The company claims that it faces competition from specialized search engines and that other general search engines are readily available and easy to install at the user’s request. “We are facing particularly robust competition… Amazon, Facebook, Bing, eBay, Snap, Twitter, Pinterest, Expedia, Kayak, Orbitz, and many other companies are vying for commercial advertising” (White, 2022, p. 17). Google (2022) also cites US producer price index data that the price of online advertising fell 40% between 2010 and 2020. Thus, the company does not agree with DOJ and claims it is not a monopolist, as it competes with other companies. The company’s success was explained by the fact that users choose Google services freely and without coercion.
Other Cases Against Google
Texas Case
The second antitrust case against Google was brought by a 10-state group led by the Texas Attorney General. The Texas case alleges that Google controls almost the entire advertising supply chain, facilitating the transaction for both the advertiser (buyer) and website publisher (seller) on its digital advertising platform. In addition, one of the most vital points in the Texas case alleges that Google and Facebook unreasonably restricted commerce and harmed competition through an illegal agreement to distribute winnings from auctions and fix prices in violation of Section 1 of the Sherman Act, 15 USC § 1 (Oh Lam, 2022). This attempt to suppress competition and to further monopolize the advertising market is a strong case for Texas.
State Coalition Case
Spearheaded by the Attorneys General of Nebraska and Colorado, the next major case against Google was filed by a coalition of more than 30 states. In addition to the Justice Department’s claims, the state coalition case alleges that Google used its monopoly on an Internet search to actively discriminate against vertical search companies such as Tripadvisor, DoorDash, Kayak, or Yelp (Oh Lam, 2022). There is reason to believe that in the future this case will be merged with others.
The government coalition case alleges that Google’s efforts to encourage people to start searching with Google instead of going directly to Yelp, Kayak, or other vertical search websites have disadvantaged those companies. Google changed the layout of its search results to direct searchers to its properties first (Google Hotels, Google Flights) and positioned other vertical search companies lower on the results pages (Oh Lam, 2022). In response to the government coalition lawsuit, Google again denies any wrongdoing, saying that the reorganization of search results was aimed at providing users with more relevant and valuable content.
Microsoft Case Law
Google is being charged under Section 2 of the Sherman Act. The settled case shows how antitrust law works for digital companies. The historic case against Microsoft ended two decades ago and can serve as a starting point for the discussion on the Google case. The reason for the lawsuit was Microsoft’s contracts with computer manufacturers on the mandatory installation of a proprietary browser on all new PCs (Greenstein, 2022). In the context of monopolization, the Microsoft case shows that the burden of proof of misconduct lies with the plaintiff (Oh Lam, 2022). The main question he must answer is whether the dominant firm has the ability and motive to create obstacles to the competitive process. The following two questions regard the technology market. Can removing the barrier lead to additional innovation from other market vendors? Can this additional innovation force the dominant firm to innovate more?
In the Microsoft case, one of the main topics of discussion was the question of whether the company really has a dominant position in the market. As dominance is not a crime, the accusation is built around the firm’s harmful actions and abuse of dominance (Greenstein, 2022). As a result of the proceedings, Microsoft terminated contracts for the mandatory installation of their browsers on new PCs (Lamoreaux, 2019). Now browsers that declared unfair competition, either do not work or occupy an insignificant part of the market.
The accusation in the Microsoft trial centered on the allegation that the company’s management had lost its ethical bearings. This argument supported the view that leadership became selfish and egocentric whenever it had free rein. Microsoft’s prosecution prominently did this, citing many confrontational and rude emails in the Microsoft archives (Greenstein, 2022). The defense went to great lengths to elicit more sympathy from their leaders, emphasizing that much comes from the heat of the moment. With a high probability, similar issues will be discussed during the investigation of the Google case, eventually affecting the final decision.
Ethical Dilemma and Ethical Frameworks
In the context of antitrust regulation, the fact that many of Google’s products and services are free to consumers is essential, meaning the company does not abuse its dominant position to charge unfairly high prices for services. Moreover, Google succeeded through innovation, exclusive products, and new approaches to sales. However, the public fears about the tech giants are not so much about pricing but their possible political and economic influence (Lamoreaux, 2019). Thus, the ethical dilemma of Google’s case is how to provide consumers with better service, competition, and free choice in technology and innovation without unfairly penalizing digital giants like Google.
The ethical framework the company followed was Utilitarianism, a variation of Consequentialism. Google, innovating, set the goal of achieving benefits for everyone – consumers, manufacturers using new digital opportunities, and society (Crane et al., 2019). However, while introducing new ideas, the company could not know the results of its actions and predict all possible ethical issues in the future. Some actions may be considered unethical, although Google may believe that their action justifies the company’s more global goals.
In recent years, there has been an active discussion about the transformation of tech giants, considering not only economic but also ethical implications. The New Brandeis movement, also known as the hipster antitrust movement, advocates for including non-economic goals in antitrust enforcement (Khan, 2018). Supporters of this movement propose to develop a system of state regulation that will not allow the leaders who control the monopoly to use their power. The second goal is to ensure that managers are faced with the right incentives to provide the best possible service to anyone who relies on a monopoly to sell or buy a particular product or service (Khan, 2018). Thus, Virtue ethics can become a new ethical framework that will change the situation for Google as actions that can be regarded as unethical will be excluded in advance.
Other Google Legal Topics
Legal issues relating to the activities of Google are not limited to antitrust laws. Discussions are held around such topics as an invasion of privacy, contracts, and defamation. In recent years, Google has become the target of legal proceedings in the US, Europe, and other countries (Khan, 2018). This tendency becomes a signal for the formation of new ethical norms in the field of digital technologies.
Protection of Personal Data
Google collects and analyzes users’ data to generate relevant search results. However, there are concerns that user information may be shared with other private or public corporations without the users’ consent (Moore & Tambini, 2018). In January 2021, the Austrian Data Protection Authority published a decision that the operator’s use of the Google Analytics website resulted in the transfer of personal data to the United States and that this transfer violated the EU General Data Protection Regulation (Winklbauer & Horner, 2022). This was the first major Google privacy case in Europe and has since evolved.
In January 2022, the European Data Protection Officer (EDPS) came to similar conclusions. It stated that the European Parliament violated data protection law by using Google Analytics to transfer personal data to the US (Winklbauer & Horner, 2022). Another invasion of privacy was thwarted by the New York Federal Trade Commission in 2019, ordering Google to pay $170 million in fines and to seek parental permission before collecting personal information from children (Moore & Tambini, 2018). Thus, the courts and the public are forming ethical standards regarding digital technologies.
Contracts
The problem of personal data leakage is associated with large companies’ acquisition of such data. For example, Google signed a contract to buy Fitbit, a manufacturer of fitness monitors and related software. Experts pointed out that such an acquisition is problematic for various reasons: high risks of “platform coverage,” expansion of monopoly power (by undermining competition), and exploitation of consumers (Stahl et al., 2022, p. 41). Their concerns also relate to the severe damage that could be caused by Google’s ability to combine its own data with Fitbit’s health data.
The European Commission has conducted an in-depth investigation into Fitbit’s acquisition by Google. The advertising concerns raised are that the acquisition will increase the vast amount of data Google can use to personalize ads. As a result, it will create difficulties for competitors seeking to match Google’s services in online ad search markets (Stahl et al., 2022). This acquisition could have raised barriers to entry and expansion for Google’s competitors to the detriment of advertisers, who would end up with higher prices and fewer choices. After investigation, the contract was approved but subjected to restrictions.
Defamation
In 2022, the Supreme Australian finalized a libel suit against Google. The article with false content was given out in the search results, but since the company did not participate in its creation and distribution, the court sided with Google and dropped all charges. Litigation has been going on since 2004 when a Victorian court ruled that Google was the news publisher because its search results helped to reach readers (Stahl et al., 2022). It took 18 years to challenge the verdict. Google independently fights against an unwanted horse that can harm people. Copyrighted data, child pornography, and revenge porn are removed without a court order. In other cases, links to content may be removed by court order.
Recommendations for Business Leaders
Google’s dominance is not unique in the digital technology market. It is a conventional phenomenon for each digital area to be dominated by one or two companies. This situation has changed the persistent belief that the market can strike a balance on its own and that competition authority can interfere only when the consumer is directly harmed (Wörsdörfer, 2022). Now, this approach will be reconsidered, at least in relation to technological giants that have the ability to influence the economy of countries, politics, and even national security. The cases against Google, as well as other tech giants, signify politicians’ intention to reform antitrust laws to reflect the new realities.
The reforms will not take place quickly but will affect almost every business. The mainstream of the coming changes will apply ethical theories to economic processes. Companies should refrain from seeking profit and innovation of any value; the critical question will be focused on how the results are achieved (Greenstein, 2022). A business should be able to predict ethical dilemmas and solve them in a way that does not harm anyone. Managers and business leaders need to prepare for the new realities now.
Litigation against tech giants could have other implications as well. Reforms in antitrust law will allow new, small innovators to conquer the market, eventually leading to new technologies. Small companies that use digital marketing tools could increase advertising spending if Google’s requirement to reduce ads is met. The number of available advertising spaces will be diminished, which, if demand persists, will provoke an increase in prices. In addition, it can be expected that the emergence of new players in the market will increase the cost of SEO sites’ optimization, as managers will have to adapt sites not only for Google but also for other search engines.
Conclusion
The rise of tech giants is a source of concern for the public and politicians worldwide. This trend has prompted investigations into Google and other companies. The focus of these cases is not so much economic as ethical issues of these companies’ policies concerning competitors, users’ personal information, and agreements with manufacturers that limit market conditions. To date, it is difficult to predict how the Google case will end, but the antitrust law’s reform is inevitable. The reform of antitrust law reforms will push companies to adhere to ethical standards that benefit the majority and do not harm the minority.
References
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