Google Antitrust Investigation Outlined by State Attorneys General

from NYTs

The state attorneys general from four dozen states officially declared on Monday that they were beginning investigations into the market power and corporate behavior of big tech companies.

The formal declaration, delivered from the steps of the United States Supreme Court by a bipartisan group of state officials, adds investigative muscle and political momentum to the intensifying scrutiny of the tech giants by federal watchdog agencies and Congress.

The states are focusing on two targets: Facebook and Google.

More here.

Posted in Law, Technology and tagged , , , .

7 Comments

  1. The state attorney general is starting an investigation into Google and Facebook, to keep an eye on how corporate transactions occur and how they are processed for big tech giants like they are. The request for this to occur came from a bipartisan group in Congress who thinks that Google and Facebook are doing something wrong, even though they won’t say it. It seems like there isn’t a day that goes by where someone doesn’t have a problem with someone else’s business. A Republican attorney General, Ken Paxton, is going to be taking charge of this inquiry with a large team behind him. He noted that “… there was nothing wrong with a company becoming big and powerful” (Google Antitrust Investigation … General) but that sounds like a fake statement for the media. No one would put in the effort to start an inquiry into a tech giant who controls the world’s biggest search engine if there was nothing wrong with their size. To be honest, Google has been around for such a long time and has stayed at the top for a good reason. I prefer to use Google for everything I do because they provide me with exactly what I need, whether that is with Gmail, searches, news, or images. I do understand Ken Paxton’s point that they are a large company that is growing very fast and the need to ensure that Google knows the government is always there to keep an eye on them. But, are they really going to waste taxpayer money on some “supposed evidence” that Google is doing something wrong, even though they won’t outright say it. Ken Paxton said in a statement to the press that “… we have seen evidence that Google’s business practices may have undermined consumer choices … violated users privacy… “ (Google Antitrust Investigation … General). With the amount of results that Google provides for a single search would be the reason they have access to the number of data they do. They wouldn’t be the largest search engine if they couldn’t provide their users with the information they need. And, like I mentioned earlier, Google isn’t the only one being investigated for this, Apple, Facebook and Amazon are to. Apparently back in the 90’s, a bunch of states joined into an investigation against Microsoft and won. The idea that was presented in the article is that if a large number of states give their support for the investigation and sue for the reason they are being investigated, a larger chance of winning the case against Google. Currently, every state besides California and Alabama have joined in the suit against Google (Google Antitrust Investigation … General). When there is a bipartisan investigation, it usually means that the investigation is going to be dragged out for a while. According to the article, “Major antitrust inquiries can take years, whether they result in legal action or not,” which is what I have seen for other companies who had to go through this. The big thing that bothers me is that anytime someone starts to become a little bit more powerful, all of a sudden some evidence appears that is going to hurt them. If there had been a breach of data, or if they were sharing user data I understand there being an outcry about it, but I haven’t heard anything.
    I think this is going to create a lot of unnecessary pressure on both parties, the tech companies and the federal agencies. According to the Wall Street Journal, the investigations are adding “regulatory headaches” for the tech giants, which is very true (States Prepare Investigations… into Tech Giants). Not only will these create unneeded stress on the tech giants, but users will decrease their involvement with them. Which in turn hurts business, in an already hurting economy and share prices fall which makes shareholders upset. I understand that the attorney general wouldn’t launch an investigation because his feelings were hurt, but realistically the “evidence” should be presented to the public. I want to know what Google, Facebook, Amazon and Apple did with my data because I use the services provided by all four technology companies. Google has always come out unscathed of any investigations opened against them and “That’s led to Google becoming a top target for politicians and regulators looking to rein in the power of Silicon Valley” (Google is Facing … US Justice Department). As I spoke about earlier, if someone doesn’t agree with a politician, an investigation is opened into them. And, that is the case with Google, who supposedly doesn’t support Republicans and is being investigated by a Republican. Whatever the case, I think people need to rein in this wild political power and use it where it actually makes a difference.

    https://www.nytimes.com/2019/09/09/technology/google-antitrust-investigation.html?smid=nytcore-ios-share

    https://store.wsj.com/shop/US/US/wsjusafm0519/?inttrackingCode=aaqul1to&icid=WSJ_ON_NA_ACQ_NA&n2IKsaD9=n2IKsaD9&Pg9aWOPT=Pg9aWOPT&Cp5dKJWb=Cp5dKJWb&APCc9OU1=APCc9OU1&cx_campaign=WSJUSSpringNon19

    https://www.theverge.com/2019/5/31/18648052/google-us-justice-department-doj-investigation-antitrust-search

  2. Rarely do I feel genuine excitement from the news, but as Thanos would say, “this does put a smile on my face.” Jokes aside, it seemed like a pipe dream some months ago that tech companies would ever be held accountable for their actions. After all, in this country, money is power, and rich tech companies have invested more than enough lobbying efforts into swaying politicians away from legislating against them.

    The worship of free market capitalism by many politicians has provided a common defensive talking point for these companies, which is that we simply can’t regulate them because they are a private company and to do that would be a violation of their “rights” and a government overreach.

    More and more people are starting to realize that these companies have become so incredibly massive and influential, and if we don’t facilitate a “government overreach” to correct the problem, we will simply become subjects living under a technologically advanced oligarchy that can censor opposition and bolster its supporters, to the detriment of everyone.

    What many of these free market zealots don’t realize is that tyranny does not have to come from government; it can come from a private company too, and there is no constitution in place protecting citizens from such a threat like there is with our government.

    In light of my robust optimism, there are certain unfortunate possibilities that we should acknowledge. Firstly, these are merely antitrust investigations. We would like to think that Google will clearly be found to be in violation of the Sherman/Clayton Anti-Trust Acts, but it’s worth remembering that those acts were originally used to suppress strikes AGAINST big businesses around the time of their passing. A specific wording in the law or some precautionary action taken by Google or Facebook could completely nullify any attempts to break them up.

    It’s also entirely possible that these investigations are merely facades to lead the public into thinking that action is being taken, when in reality nothing will change.

    Since we understand monopolies to be competition-killers, there appears to be no wiggle room for these companies to escape the punitive legislation that could be coming down the pipeline in the near future, and that is certainly a cause for celebration.

    There is also a strong case to be made about election meddling on the part of these companies. The direction in which their censorship efforts flow is the strongest evidence to make this case, but for those who doubt, we can certainly trust the head of “Responsible Innovation” for Google, Jen Gennai.

    In a report published by Project Veritas, Gennai made the following statement:

    “We all got screwed over in 2016, again it wasn’t just us, it was, the people got screwed over, the news media got screwed over, like, everybody got screwed over so we’re rapidly been like, what happened there and how do we PREVENT IT FROM HAPPENING AGAIN [emphasis added]… We’re also training our algorithms, like, if 2016 happened again, would we have, would the outcome be different?”

    Whether it is against the law or not, we can recognize that this is certainly the type of election interference that people were sounding the alarm about with regards to Trump and Russia, and if people cared so deeply about that, they should also care about this (the difference being that big tech’s election meddling is actually real).

  3. Pursuing an investigation against big tech companies will be a long and difficult journey, however, it may be for the benefit of the general public. In today’s times, almost nothing is private online. The searches one makes on Google become known across the entire tech industry. It is common for a user to go on a company website and view a product, and then within 24 hours that user will see an ad for that same product or one similar on their social media. Many users even receive emails from companies shortly after visiting their website, even if they do not join the company’s email list. This has been an issue where many people feel as though their privacy is being violated online. Many users wonder how they search something through Google and Facebook knows to show them an ad for that same product.
    With this privacy violation being a concern among the general public, it is likely that this investigation against big tech companies will be widely supported. For the government to build a case against one or all these companies, they will need all the support they can get. As stated in the article, these investigations can take many years, and may not even lead to legal proceedings. While this will be a long trek for both federal and state governments, I believe it is worth their efforts. People need to feel safe and protected when using their own phone or computer. Privacy is becoming an issue more and more each day as technology becomes more advanced so it would be best to slow down the tech companies now, before it’s too late.

  4. Very recently, several state attorneys general on both sides of the political spectrum have launched antitrust investigations. The reason for the investigation, according to Attorney General Ken Paxton, attorney general for the state of Texas and a Republican, is because Google has allegedly “undermined consumer choice, stifled innovation, violated users’ privacy and put Google in control of the flow and dissemination of online information,” as quoted from the article. The launch of these investigations may set a precedent for all future tech company investigations in that the one against Google and the discussion of one against Facebook could eventually lead to a drawing of metaphorical lines regarding how far-reaching these investigations go and whether or not they result in break-ups of these large firms.

    It is interesting to note the power that state governments have in the process of antitrust investigations. States have more power than is noted in antitrust cases. Although the federal government is often seen as the entity that ultimately launches and oversees investigations, the state attorney general offices play a significant role in assisting federal prosecutors, building cases, and in some events, suing corporations. A major tenant of this investigation is that Google is not being targeted specifically for being a large and profitable company, but rather because certain business practices have led to Google controlling the flow of information online, which I believe to be the most damaging of all allegations. In a society that values consumer rights and in an age of the spread of misinformation, this alleged control of information flow by Google is a very serious allegation that could ultimately turn public opinion against not only Google but other large tech firms mentioned in the article (Facebook, Apple, and Amazon).

    In an age of endless technology and the rise of analytics and big data, and as an business analytics student, I am personally against the collection of personal consumer data to be sold to companies without the knowledge of the user. Whether or not this collection of data is explicitly written in a long user-agreement on any of the large tech companies’ sites, consumers need to become more informed regarding how their data is being used. Knowing that these companies, who are trying to turn a profit, will not advertise that they collect data, consumers have a responsibility to inform each other and to actively look into the collection of their data to develop their own opinions regarding the topic. Consumers have a tremendous amount of power and at the end of the day, they alone can force corporations to change their policies and business practices.

  5. The advent of this investigation ought not to be taken lightly. More than 40 state attorneys general have come together despite political differences in order to investigate Google’s advertising business, and this could have serious implications for a significant portion of the world’s population — both for businesses and consumers. Depending on the outcome of the investigation, there is a very real possibility that Google would be forced to break up, just as standard oil was ordered to do at the turn of the 20th century. If Google were to be broken up, the effects on consumers would be substantial. The world may never see innovation on such a large scale for quite some time if Google, arguably one of the most inventive companies to have ever existed, is separated. So, really, the question at hand here is whether or not Google has done anything anti-competitive within the online ad space that is actionable upon under the Sherman or Clayton antitrust acts. At the center of all antitrust cases are the ideas of consumer harm and market control. According to Black’s Law Dictionary(1) a monopoly is “…ownership or control of so large a part of the market- supply or output of a given commodity as to stifle competition, restrict the freedom of commerce, and give the monopolist control over prices.” An independent study by eMarketer(2) shows the five corporations who control the majority of the online advertising market. Google is the clear leader; however, Amazon continues to garner a greater portion of the market share every year. Right now, Google has just under 40% control of the market, which is not quite as significant as it sounds in the context of an antitrust probe. In the most relevant case, United States v. Microsoft Corporation, it was found that Microsoft had about 90% control of its market. In that situation, the judge initially ruled that Microsoft be separated into two individual companies; however, after the case was later appealed and then remanded, it was instead held that Microsoft would simply have to share its software with other companies. It seems to me, that if Microsoft was not broken up, Google will definitely not be, though I do think that alternative action will be taken. Already, Google has been fined several billions of dollars by Margrethe Vestager, the competition commissioner of the EU, for multiple antitrust offenses: “…Vestager has fined the tech giant more than $9 billion citing antitrust violations.”(3) Even despite the hefty fines, It is Vestager’s contention that alternative methods ought to be utilized. There is also an immense political pressure on big tech from Democratic presidential contenders. Senator Elizabeth Warren has recently vowed that she will remake American capitalism, and big tech companies are at the top of her list. She said she plans to hold companies like Facebook, Amazon, and Google accountable, so it is up to the American citizen to determine what that means. I sincerely doubt that the legal means for breaking up these companies is present under existing antitrust precedent, so if Warren were elected as president, she would have to consider other means (perhaps passage of an act or executive order) to further regulate big tech. I will say, though, that I do not think big tech companies like Google harm consumers, however, I do think there ought to be standards imposed upon their use of consumer data, and the way they sell ads. First, I think that consumers should be able to opt out of having their data collected, or be compensated for allowing Google to compile and use their information. Then, I think Google should have to disclose exactly how much exposure an ad will get per price point in place of their current “bid” system for selling ads.

    (1) https://thelawdictionary.org/monopoly/

    (2) https://www.emarketer.com/content/us-digital-ad-spending-will-surpass-traditional-in-2019

    (3) https://www.washingtonpost.com/technology/2019/03/20/google-fined-nearly-billion-ad-practices-that-violated-european-antitrust-laws/?noredirect=on

  6. Everyone has been exposed to a tech giant whether it be Facebook or Google. The announcement of the state departments opening up an investigation on the actions of not a specific tech giant but rather the whole market. They have opened up the investigation for accusations that the tech giants have undermined consumer choice, stifled innovation, violated users’ privacy and put Google in control of the flow and dissemination of online information. This is a major announcement a positive move by the government to ensure that consumers are protected. This is only the beginning for a potentially lengthy investigation done at the federal level. Many have been concerned with some of the business practices that they believe violates their privacy. One example is that, Google uses tracking software to keep track of what you research so it can tailor your results to fit your preferences. Many believe that this is an invasion of privacy. Facebook has been in the news for privacy concerns already when user’s personal information was released to third parties without the user’s knowledge. Facebook also was in another scandal when it came to the 2016 election. They were under investigation for Russian-backed ads that appeared on Facebook during the presidential campaign. The investigation gained public attention because the ads violated federal laws that bar foreign interference in U.S. campaigns and the ads “pose a direct threat to democracy and national security. Alex Stamos, Facebook’s chief security officer, said they were connected to about 470 “inauthentic” Facebook pages and accounts, which seemed to be affiliated and “likely operated out of Russia.” Bipartisan groups that have announced the investigation are from both parties. This shows that both parties find it important that to ensure consumer rights and privacy are protected. If this turns into a large-scale federal investigation, there is a potential that new laws will be put in place. The new laws would more than likely regulate the tech giant’s business practices. The laws will more than likely include consumer privacy and what these companies can do with consumer information. This is a good first step to regulate this emerging industry because the industry is only going to become stronger and larger in the years to come.

    https://www.npr.org/2017/09/08/549284183/facebook-acknowledges-russian-ads-in-2016-election-will-investigations-follow

  7. A bipartisan group in Congress has requested that tech giant companies (namely Google and Facebook) be investigated due to suspicious activity within “handling consumer data, their ad-targeting practices and their role as gatekeepers of communication”. Said activity is under scrutiny in both the United States and in Europe. Essentially, the State Attorneys General is investigating the market power and corporate behavior of tech giant companies-Google, Facebook, Amazon, and Apple.

    @RavGill- I enjoyed reading your response to this blog article- it was very thought provoking. I agree with your claim that this investigation could prove to be a waste of taxpayer money “on some supposed evidence that Google is doing something wrong, even though they won’t outright say it,” especially if it is dragged out for a long time. However, I disagree when you say this investigation was started because the companies being investigated are growing to be more powerful and people want to undermine them because of their power and size. Like Mr. Paxton noted “… there was nothing wrong with a company becoming big and powerful” but there is a problem when those companies abuse their power. Just think about all the instances where users of these tech giant’s data has been taken but nothing was done about it because “the duty to provide data privacy and security does not neatly fit into any established category in tort law” and “the common law does not recognize a general cause of action resulting from the accession or theft of a consumer’s private information”. Unfortunately, there aren’t currently strong enough federal laws to protect lay people from online breaches. So how can this be changed…
    https://mttlr.org/2018/10/my-data/

    “In 1998, the Justice Department and 20 states filed suit charging the company with violating antitrust laws. A historic trial began in October of that year. At issue was whether Microsoft had used its Windows monopoly to force computer makers to exclude a browser made by Netscape on their PCs.”
    ..Microsoft lost and changes were made accordingly.
    https://www.seattletimes.com/business/microsoft/long-antitrust-saga-ends-for-microsoft/

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