Google Antitrust Case Regarding Searches (October 2020)
Abstract
Google is an American multinational technology
company that specializes in internet services and products which include online
advertising technologies. Google is one of the wealthiest companies in the
world and has been for a long period of time.
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| Figure 1. Google Hit With Antitrust Lawsuit. |
The Justice department is also looking at the
contracts that Google has with these different companies when they make the
deal that requires companies like Apple to have Google as their main search
engine. In order for the Justice Department to go ahead and win this case that
is set forward at Google, they will need to make sure that they bring up the
issue of how Google violated the Sherman Antitrust Law, while also proving that
Google is the main search engine and the contracts they have with Apple. When
looking at Google's defense for this case, they will put forward that they are
not the dominant ones and they are one click away and anyone can go to a
different search engine. Also, Google feels that they are complying with the
different laws and guidelines that were put into place and they are doing
everything in a correct and legal manner.
This paper will go into depth of these issues
that are arising while also looking at the theories that were presented such as
Individualism, Utilitarianism, Kantianism, and Virtue Theory. While observing
and looking into this case, we will go over the different issues that may be
ethical and unethical by Google. Looking at both sides of the case is
important, and each side will be analyzed and correlated back to the ethical
theories to determine if they are ethical or not.
Company Background
Google
is one of the biggest technology companies to this day and they began their
journey back in 1998. Google's industry covers a wide range of software and
hardware such as internet, cloud computing, computer software, computer
hardware, artificial intelligence, and advertising. Today, Google has become
one of the largest technology companies in the world and they continue to grow
each year.
In
the early 2000’s, Google developed a deal with AdWords which was a pay per
click advertising platform that they were using. This was the first big deal
that Google had, and it was from there that the advertising side of Google
began to take off. Google also incorporated G
Figure 2. Google Search Engine.
mail, which is their email app
that they use, and this came out around 2004. There were also some key products
that they came out with which were google maps (2005), YouTube (2005), Google
Earth (2005), Google Calendar (2006), Google Finance (2006), Google Street View
(2007), Google Android (2007), Google Chrome (2008), Google Voice (2009) and
Google Labs in (2012). Each of these types of software has made Google one of
the biggest technology companies around to this
day.
Google
has been moving in the right direction for many years and it has taken a while
for Google to get to this stage. Creating and developing a multimillion-dollar
company and industry is not easy and they have made sure to develop and create
an industry that thrives.
Case
On Tuesday, October 20, 2020, Google was
accused by the Department of Justice (DOJ) for illegally abusing the dominance
of internet searches. The reason as to why the government is bringing up this
issue is because the Justice Department feels that Google is taking over the
marketplace by paying other companies to maintain their power. This begins to
create issues in the marketplace because it does not allow other companies to
be able to thrive and enter the market fairly. The Justice Department feels
that they have violated the Sherman Antitrust Act and will be examined in depth
in the court of law. The Sherman Antitrust Act is “a federal statute which
prohibits activities that restrict interstate commerce and competition in the
marketplace”. (Law-Cornell).
When looking at the online advertising, there
was a profit made of $34 billion last year from Google. The New York Times
article says that “this is a monopoly defense case. The government says Google
is illegally protecting its dominant position in the market for search and
search advertising with the deals it has struck with companies like Apple.
Google pays Apple billions per year to have its search engine set as the
default option on iPhones and other devices”. (Wall-Street Journal). From this
statement, this is the main reason as to why there was this Antitrust law put
into place. If companies were able to pay other companies freely, there would
not be a chance for any new companies to come into emergence. Google would
continue to pay companies like Apple millions of dollars per year, and in
return, would benefit both Google and Apple. This case is a huge deal for
companies like Apple and even Google because if this gets shut down, there will
be large amounts of money that is potentially lost. Google profited a lot last
year from this, which was about $34 billion, and the Justice Department is
looking into this situation in depth.
When looking at Google’s defense, there will be
a few factors that arise. Google says that consumers can easily switch to any
other search engine when they are on their phones and they feel that everything
they are doing is in compliance with the Justice Department and the law. Google
is one of the largest companies to this day and they do not feel that they are
coercing other companies into making their search engine the main source.
Google said that they are going to go at this with full force with the best
attorneys that they have and if they are found guilty, they will need to change
the way they operate.
This is one of the largest antitrust cases to
hit the news since the Microsoft case. Reporters say that this Google case is
very much like the Microsoft one that happened well over a decade ago.
Microsoft was trying to monopolize the personal computer industry during the
90’s, and it was not allowing other competing companies to be able to step in.
Microsoft ended up losing the case and there were multiple issues such as
tampering evidence that occurred throughout. This case also lasted years and
the case did not turn out to what many people would have thought would happen. Instead
of being fined or sued, the Justice
Department and Microsoft came up with a deal that would make Microsoft have to
share its application programming interfaces with other third-party companies
to allow them to compete in the market. Microsoft also needed to appoint three
individuals that would need to be able to access the different records and
systems of Microsoft so that they could make sure they would stay in compliance
with the deal that they made.
If these two cases are anything alike, it will
not look good for the outcome of Google. Google will most likely have to go at
this case in full and if they are found guilty, appeal it, and then if they are
found guilty after that, come up with a deal with the Justice Department. There
are no answers to the Google case at this moment in time but comparing this
case to Microsoft will give us a better insight of what may occur in the future
for Google. This case will be a long hard-fought battle and both sides will
need to be able to provide credible information to win the case.
Companies’ Shareholders and Consumers
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| Figure 3. Google as Main Search Engine (Percentage). |
Stakeholders are the biggest ones at stake
because if the company loses money, then the shareholders will also lose money.
Google will then need to cut their ties off with Apple (i.e.: paying them to
have Google as the main search engine), which will then lead to money lost in
advertising which comes from the consumers. As stated previously, Google made
around $34 billion from online advertising, and that was due to them being the
major search engine on every iPhone and apple product that was produced. In
the end, it is important that the company addresses the issue and is honest
with the shareholders and fixes any of the issues to make them happy.
Individualism
When looking at the Individualist theory, the
only goal for the company is to profit, so the only obligation of that
businessperson is to maximize profit for the owner or the stakeholders within
the law of the land. If an individualistic were to look at this case, they
would agree with Google that they are maximizing profit for the company and the
shareholders, but they may not agree due to it not being under the law of the
land. Google said that they did abide by what the DOJ has in place for the
rules and regulations regarding these antitrust issues. Google used the money
to pay Apple to have their product as the main line and if consumers wanted to
change the search engine, they could. I know from my personal experience, that
if I did not want Google as my main search engine, that I could change it in my
settings of my phone.
On
the other hand, though, there can be the side of this case where Google does
not abide by the law of the land which is the Sherman Antitrust act. This act
was put into place in the 1890’s so that there could be free competition in the
marketplace. Even though Google maximized profit, they did not follow the law
of the land because they paid Apple to have them as their main search engine
for users. If there was a certain measure that allowed users to access other
search engines instead of Google, then this may have been fine. But, if we look
at Microsoft's case, this will go against this theory because Google would have
violated the law of the land which was the Sherman Antitrust Act.
Utilitarianism
From
a Utilitarianism view, this looks at “maximizing the happiness in the long run
and for all conscious beings that are affected by the business action”.
(Salazar Module). One could say that Google was paying Apple so that they could
take over the market and have an advantage over competitors. So, this could
lead to the unhappiness of other companies and basically, they are not allowing
consumers to use other products that are out there. Microsoft's case, which is
being compared to Google in this instance, said that they felt they were being
sued only because other companies were upset that they were thriving and doing
well and other companies in their industry were not. This shows that there were
many people out there that felt that Microsoft was violating the free
marketplace and this correlates with the predicament Google is in right now.
So, from this, this would go against this theory, due to it creating
unhappiness of other companies around the world and in the marketplace.
On
the customer side of this, Google could say that they are looking out for their
customers when they said that if they are found guilty in this case, that the
web browser would go from free to having a price behind it. From the shareholders
standpoint, they are maximizing the happiness of their stakeholders because
they are profiting from this and making billions of dollars. If Google is to be
found guilty, this would lead to unhappiness from the shareholders and this
would go against this theory. Each side of this theory is observed in
depth to the way that it will make different individuals happy or
unhappy.
Kantianism
From a Kantian viewpoint, they say that people
should act rational and not act inconsistent in their own actions or consider
themselves exempt from rules. Also, it is important that the person acts in
“goodwill” and acts because it is good for everyone and not just you. It is
also important that the company or individual acts in a way that respects others
and there is not lying or manipulation that may harm others. One could say that
Google uses the consumers as a mere means and other companies around them as a
mere means. Google is not allowing other companies to operate in the free
market, and they are using their power to pay Apple and other companies to keep
their software as the main search engine. Google knows that they are one of the
richest companies around, so paying other companies allows them to take control
of the marketplace and not allow any competitors. There is a lot of money that
comes from advertising and they are not acting rational according to the law.
Google is then able to gain consumers and create a massive cash flow for them
($34 billion for Google last year). If Google were to let the market work free,
rather than paying other companies to have their software, it would allow other
companies to make money and be successful as well.
Virtue Theory
Virtue theory looks at the different cardinal
virtues which are courage, honesty, temperance, and justice. Each of these are
important for companies to have and if there is one missing, then they will not
work. It is important to note that if an individual does not have these values
then they are not a virtuous leader. Being a virtuous leader means achieving
greatness and bringing the greatness out in others and having values such as
courage, honesty, temperance, and justice. When looking at this case as it
pertains to Google, one could say that this case goes against virtue theory.
Even though Google admits that they did nothing wrong and followed all the
guidelines in place, there is an obvious issue if the Department of Justice is
involved. If you look back to the Microsoft case, there was a massive antitrust
issue pertaining to how Microsoft monopolized the industry. This case led to
Microsoft having to make an agreement, which allowed other companies to be able
to perform in the marketplace without being under any type of coercion. If
Google wants to a virtuous leader, they should abide by the laws of the land
and fix the issue that they have created when violating the Sherman Antitrust
Act. Instead they went against the law and this shows that they are being
dishonest about the situation and not taking fault for their actions.
Evaluation of the Ethics Theories
In my opinion, based on the Microsoft case as it
compares to Google, Google was unethical and did not follow the rules of the
land. Based on the antitrust laws, companies are supposed to let the market act
free without any type of coercion or paying of one company to another. Google
should have not paid Apple and other companies to have their product as the
main search engine on their products. Instead, they should have let the market
work free and let the consumers decide what product they wanted to use. There
are already so many users that are out there that prefer Google and their
search engine, and they have gotten themselves in hot water by paying companies
like Apple.
Google
has already stated that they did nothing wrong and made sure that they followed
the laws and regulations as it pertained to these Antitrust laws. This could
also lead to dishonesty and it will be interesting to see how this case works
out. If it correlates with the Microsoft case, Google will most likely lose and
must come up with a deal with the Justice Department. These unethical issues
that Google has performed could potentially lose them money, but for now, we
will have to wait and see how this case turns out over the next days, months
and even years.
Action Plan
Antitrust Laws have been around well over 100
years. Microsoft was one of the largest software companies that was hit by this
law back in the 90’s. The Microsoft lawsuit allowed it so that many other
companies like Google, could make themselves known, rather than one company
taking over the entire marketplace. Google has been hit with the same legal
issues, due to them violating the marketplace and trying to monopolize it. This
can be very harmful for different companies that are in competition with Google
and this case will be a long-fought case between the Justice Department and Google.
The Justice Department will have to present and locate data that shows that
Google has violated the Antitrust Laws and paid other companies so that they
could monopolize the industry. For Google, they will need to make sure they
provide credible information that they did not violate the law and that users
could easily choose another search engine if they preferred.
This case is a recently brought issue and it
could take years before the final decision is made. There is a lot at stake it
is important that Google provides information to not only the Justice
Department, but also the shareholders of the company. If Google feels that they
are going to win the case, then it will be important for them to make small
changes so that they become wrapped up in an issue like this again. Doing this
will help the shareholders feel that Google was acting and making sure that
they were complying with the rules and regulations of the law. This will not
hurt the company too much, but it will change the way that other companies
compete in the marketplace. Also, if this case turns out the way Microsoft
ended, Google will need to make a deal with the Justice Department to fix the
issues and make it so that they comply with the laws in place.
Large companies have been finding themselves in
hot waters by trying to work around the law. It will be interesting to see how
this case is resolved in the end and if Google will be found guilty. The
question that this case comes down to is how Google will be able to deal with
all this controversy if they are found guilty. They will need to make sure they
explain what they plan to do for their shareholders in the future while also
making sure they abide by the rules that the Justice Department has them follow
if they are guilty. There will need to be a new approach that Google abides by
and they will most likely have to report back to the justice department as to
what they are doing if they are found guilty down the road. Like Microsoft had
to do, they may have individuals who gather information and observe that
information to make sure they are staying in compliance and within the
agreement that was made. When looking at each of the theories, each one of them
looked at both sides to the issue and some agreed with the way Google operated
and some did not. This all comes down to the rule of the land and what the laws
are and if Google violated those Antitrust Laws that are in place. Even though
there is no definite answer to this, it is important that Google complies and
goes at this case with full honesty and integrity.
By: Matthew Remillard
References
Lohr, S. (2020, October 20). What Is Happening
With the Antitrust Suit Against Google? Retrieved from: https://www.nytimes.com/2020/10/20/technology/antitrust-google.html
Kendall, B. and Copeland, R. (2020, October 20).
Justice Department Hits Google With Antitrust Lawsuit. Retrieved from: https://www.google.com/amp/s/www.wsj.com/amp/articles/justice-department-to-file-long-awaited-antitrust-suit-against-google-11603195203
Federal Trade Commission. (2020). Guide to
Antitrust Laws. Retrieved from: https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws
O’Connell, B. (2018, December 31). History
of Google: How it Began and What’s Happening Beyond 2019.Retrieved from: https://www.google.com/amp/s/www.thestreet.com/.amp/technology/history-of-google-14820930
Corporate Finance Institute. (2015-2020).
Microsoft Antitrust Case. Retrieved from: https://corporatefinanceinstitute.com/resources/knowledge/strategy/microsoft-antitrust-case/
Law Cornell. (2020). Sherman Antitrust Act.
Retrieved from: https://www.law.cornell.edu/wex/sherman_antitrust_act
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