MoneyOpinions | In their antitrust probe, enforcers will have to do more than show us Google is powerful
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It happened in the early hours of this morning
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EVERY NEW day seems to come with a new regulatory threat to the country’s technology titans. Monday came with 50.
Attorneys general for 48 U.S. states and two territories have announced an antitrust investigation into Google, adding to the long line of probes the digital age’s leading companies already face — including a smaller group of attorneys general reviewing Facebook, as announced late last week. The Google inquiry’s broad bipartisan backing lends authority to the effort, and the firm’s dominance is impossible to ignore. States could end up supporting a federal case, or, if they get impatient, they could file a suit together in federal court.
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But to gain ground anywhere, enforcers will have to do more than prove a company is powerful.
Texas Attorney General Ken Paxton told The Post this week that the investigation will first examine online advertising. That is not surprising: Google’s share of revenue in the sector last year was less than 40 percent, but the company controls much of the intricate Internet infrastructure that connects consumers to sellers to publishers to the websites in between. Google could exploit that control to maintain its position — in how it bundles services, or how it demands audience data from news-gatherers to keep its targeting capabilities unassailable. It could also hurt consumers in the process, by causing merchants to raise prices or by starving independent media into obsolescence. The company says it doesn’t; investigators will have to demonstrate that it does.
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Then there’s search. Google’s ability to win in advertising comes from its ability to win our attention, and today its engine handles almost 90 percent of queries in the United States. That engine used to be a gateway to the rest of the Web. Now, Google arranges things so that more than half of queries stay on its own domain. These efforts to answer questions directly can privilege the company’s own products above rivals’. Is that a systematic effort to keep competitors out, or is it just giving users what they want? Google may also face scrutiny for the conditions it imposes on device-makers that want to offer its Android operating system, which runs on more than half of U.S. smartphones.
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Google’s best defense has always been the obvious one. Consumers love it, and they also love that it’s free. Certainly, free services such as Google do not inflict what modern U.S. antitrust doctrine has tended to think of as the main harm of monopolies: higher prices to consumers in the short term. The question will be whether, in an age of unchecked data collection and network effects, there are other kinds of anticompetitive behavior that are both harmful in the long run and illegal. That means these attorneys general will have to do more than show us that really big companies are making really big profits.
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