As the courtroom awaits the impending face-off between Google and the Department of Justice, echoes of yesteryears when the government challenged Microsoft reverberate.
This trial represents not only a deep dive into Google’s business practices but also signals the broader scrutiny of big tech giants’ dominance in the market.
A Blast from the Past and Present Implications
Decades ago, the US took Microsoft to task. Now, the crosshairs are on Google. The fundamental question that arises is: will this legal drama mark the beginning of a leveled playing field, allowing competitors to carve out a more significant piece of the mobile search market pie?
Google’s parent company, Alphabet, seemingly undeterred by the looming trial, has witnessed a robust 47% increase in share value this year. Big tech companies have been steering the stock market to impressive highs.
Despite the global sentiment shifting against unchecked tech supremacy since 2017, the stock market paints a picture of undeterred investor confidence.
Critics argue that despite the regulatory rumblings in Washington and a series of fines slapped on Google by Brussels, there has been negligible impact on the big tech dominance in their key markets.
The inability of regulators to rein in tech giants has been glaring. The introduction of the EU’s Digital Markets Act might be a significant move, but in the US, authorities have often been seen playing catch-up, attempting to mold existing laws to govern ever-evolving tech entities.
Navigating the Legal Minefield
The courts, traditionally favoring the consumer, have shown reluctance in clipping big tech’s wings. The modus operandi of tech companies is simple yet effective: provide services that directly benefit consumers, be it in the form of reduced prices or free internet services.
These are hard to argue against, especially when the perceived immediate advantages to the consumer are evident. It’s noteworthy that the US Federal Trade Commission couldn’t prevent Microsoft’s massive acquisition of gaming titan Activision Blizzard.
The underlying sentiment? The courts need concrete evidence of direct consumer harm, regardless of competitor complaints. Google’s impending trial hinges upon its deals with device manufacturers ensuring its search engine remains the go-to default on Android devices.
The tech behemoth defends its practices, likening them to cereal companies paying extra for prime supermarket shelf space. Google further cautions that meddling with such practices could lead to repercussions, including escalated phone prices for consumers.
Parallel to Google’s impending trial, whispers suggest Amazon might soon be under the scanner for its e-commerce activities. The central concern here is Amazon’s alleged coercive tactics, making third-party sellers opt for additional paid services to guarantee product visibility.
And while these sellers make up a considerable chunk of Amazon’s revenue, the company’s share prices remain unshaken, having surged by 57% this year.
Many surmise that even if these tech giants face legal setbacks, they might circumvent significant overhauls by merely tweaking contractual terms.
The likes of Amazon have already made concessions in regions like the EU and UK concerning third-party seller relations, without it putting a dent in their business operations.
The outcomes, regardless of their immediate effects, will undoubtedly shape the narrative surrounding big tech’s unchecked ascendancy in the times to come.
