07/10/2024
Google’s Antitrust Trials and Tribulations
This week’s key terms/concepts:
• Exclusionary Contracts: A contract that excludes potential competitors from entering a market by imposing externalities, such as blocking access to other services.
• Antitrust / Competition Law: An area of law that seeks to prevent agreements that may restrict market competition and regulate anti-competitive conduct by companies.
• Big Tech: The five largest technology companies in the US, which are Amazon, Alphabet (Google), Apple, Meta and Microsoft.
A second major US antitrust lawsuit against Google is soon to be decided after the Department of Justice continues to assert pressure on the Californian company. Following its first lawsuit defeat in August where a federal judge held that Google had constructed an illegal monopoly on search engines through exclusionary contracts, the company now faces a decision regarding their advertising technology services leading to higher ad prices for customers.
Why is this so important?
The antitrust sector had been an area of stagnation and difficulty for regulators in the past- alongside a general reluctance to intervene, the lawsuit targeting the AT&T and Time Warner merger in 2017 failed to implement a block and an acquisition followed in 2018, and regarding Google, the Department of Justice also delayed their search engine antitrust lawsuit 15 years after the company had made its first agreement with Apple back in 2005.
However, the 2020s have seen a rebirth of the sector’s powers in targeting big tech corporations.
Earlier this year, Apple lost an EU lawsuit regarding music streaming service competition after it was found charging fees on other services and building an illegal advantage where it was forced to pay a fine of €1.8 billion. In 2020, Apple also lost a French antitrust lawsuit, in a fine of €1.1 billion over contracts that prevented distributors from competing with one another. Google won’t go down without appealing these circumstances, however if the ad-tech lawsuit Google faces also ends in defeat, it reveals an alarming change in culture for the antitrust and competition sector.
What does this mean for the legal sector?
With the Department of Justice strengthening their anti-monopolistic powers and the EU remaining vigilant, the threat of an antitrust lawsuit targeting AI in the future could become a prevalent issue for big tech. Whether it concerns Google’s Cloud AI, Amazon’s AWS, or Microsoft’s partnership to become OpenAI’s exclusive cloud provider, competition authorities will be prepared to prevent an AI monopoly in light of the recent Google lawsuits revealing the issues that big tech can cause to a developing sector.
Closing arguments for Google and the Department of Justice are scheduled for next month, where the judge will then give the ruling by early next year.
Lex Weekly 