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Lawsuit against Google: poor start to a Silicon Valley debate

2020-10-21T15:45:57.057Z


The US Department of Justice is taking Google to court - an overdue move given the company's market power and importance. But the lawyers are ignoring something important.


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Photo: AMY OSBORNE / AFP

On Tuesday, the US Department of Justice presented its monopoly lawsuit against the Internet company Google.

This has not happened since the major antitrust proceedings against Microsoft in 1998.

The expectations are correspondingly high.

After decades of laissez-faire policy, in which the US government essentially let Silicon Valley rule at will, a fundamental question is finally to be clarified: How can one avoid that ever more power in the hands of a few technology companies ends up who sometimes seem overwhelmed by the social significance of their products and platforms?

However, anyone who reads the 64 pages of the complaint will be disappointed.

You feel like you've been transported back years - to a time when Facebook didn't exist, when Google didn't collect billions of user profiles, when Amazon was just an ambitious online bookseller.

Because the US Department of Justice has decided to press ahead with a partial lawsuit shortly before election day, which is only dedicated to one aspect of the Google universe: search engine advertising.

Google has bought central positions on the Internet

On the one hand, that is not absurd.

Even though this business is no longer so much in the public eye in light of the Cambridge Analytica scandals, the ads at the top of Google search are still a reliable source of revenue.

It allows Google to open up the video market with the acquisition of YouTube, to peter out experiments such as the Facebook competitor Google plus without lasting damage, or to plan the takeover of the smartwatch manufacturer Fitbit.

The lawsuit was therefore almost a matter of course. After all, the billions that Google pays to Apple or to the non-profit Mozilla Foundation for being the standard search engine on iPhones or in the Firefox browser have long been known.

The same applies to the contracts with which Google requires the manufacturers of Android smartphones to integrate Google apps.

The plaintiffs' argument is clear: Google has bought a central position on the Internet with its billions in income and can only maintain this with anti-competitive means.

The numbers that are supposed to prove this are impressive: 90 percent of search queries in the US market go through Google channels.

On smartphones and tablets it is as much as 95 percent.

Income: in the US alone, $ 40 billion a year.

The answer from Google was predictable: It was not gag contracts that led to the overwhelming position of power, but the outstanding quality of Google search.

Google even commented on the comparison with the Microsoft process with derision: "We are no longer in the nineties when you dialed into the Internet with the modem," writes Google manager Kent Walker in a blog post shortly after the complaint was published.

In graphics and animations, Google demonstrates how easy it is for users to choose a different search engine and that competitors like Bing acted in exactly the same way.

However, Google's argument goes in circles: If the change is so easy and the Google search is so superior, the billions of euros that the company invests in the placement of its search engine can hardly be explained.

The judges will have to decide: Is the reference to normal market practices sufficient to justify this practice for an almost monopolist as well? "

The Ministry of Justice's complaint seems bizarre mainly because the many other dependencies on Google's advertising business are not mentioned at all.

Because "programmatic advertising" has long since taken over large parts of the advertising business.

It is based on creating detailed user profiles and targeted advertising accordingly.

Google is also in the lead here, as the British competition watchdogs documented in the summer.

Are TV Ads Really That Different?

The US plaintiffs, however, have got stuck in the past: They state in their application that advertisements in newspapers or on television are inferior because advertisers are not yet able to react to customer interests in real time.

However, this is no longer true.

Target group-specific advertising spots are already being played on smart TVs, and viewer behavior is recorded to the minute.

Newspaper publishers also equip their digital editions with personalized advertising.

After all: the lawsuit is only the beginning.

According to media reports, another working group in the US Department of Justice is working on the complex advertising issue, but was not ready to file a lawsuit before the election date.

Letitia James, attorney general in democratically ruled New York, made it clear that the lawsuit is not about a sole initiative of the Trump administration, which could be put on the back burner after a possible change in power.

She announced that seven more states wanted to file lawsuits against Google in the coming weeks.

The battle for power and business models in Silicon Valley has only just begun.

Icon: The mirror

Source: spiegel

All tech articles on 2020-10-21

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