“The risk is now existential for the Internet giant”

Lhe shadow of John Rockefeller hangs like a ghost over the Mountain View campus in California, home of Google. Not that the king of Internet search intends to start oil exploration, like the founder of Standard Oil in the 19th century.e century, but because the same misfortune could very well happen to him. The US Department of Justice has officially filed a complaint against Google, along with eight states, including California and New York. And as with Mr. Rockefeller’s oil company, he seeks to break up a company that has become too powerful. “Google has engaged in a policy of exclusion that has severely weakened, if not destroyed, competition in the Internet advertising industry.” said Tuesday, January 24, Minister of Justice, Merrick Garland.

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Justice’s meticulous investigation (149 pages) brings to light “Fifteen years of anti-competitive practice”, according to antitrust chief Jonathan Kanter. Like Standard Oil, which had taken control of the production, refining and transportation of oil in the United States, Google is accused of patiently building a dominant position in all technologies, allowing both sites seeking to advertise and advertisers they want to move to do so within the Google ecosystem. Until the auction prices are fixed. In addition, its search engine is one of the first destinations for online advertising. Analysts estimate that the company pulls in a quarter of all online advertising revenue in the United States and half of that spent on search.

Multiplying surveys

As always in competition law matters, it is not about the dominant position per se, but about its abuse. The first is simply to eliminate its competitors. The inquest details, for example, the “Poirot project” created by the firm to systematically discriminate in purchasing space against users of competing auction technology. It may also consist of raising its prices excessively after competition has been destroyed. The federal state itself would have paid more for its own ads, which have cost it $100 million since 2019. So it relies on its experience to demand that Google divest itself of a good portion of its activities in this domain.

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The danger is now existential. Advertising represents nearly 80% of the digital giant’s turnover and is therefore the heart of its targeted economic model. The company has been in the spotlight of authorities around the world for many years. She was fined 220 million euros in France in 2021 and the European Commission is increasing the investigations. As of 2020, Texas has filed a complaint with 16 US states. The federal court action spells difficult days ahead for Google. The latter argues that competition is fierce in this business and that dismantling it will penalize innovation and prices. It is betting above all on its best ally, time, like IBM or Microsoft before it. But now the clock is ticking and time is speeding up dangerously.

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