The $2 trillion company’s backbone, the lucrative online search industry, was the subject of the United States Department of Justice’s final court argument on Friday, claiming that Google is an illegal monopoly.
On the other side of the Atlantic, the European Commission is looking into allegations that Google has broken the Digital Markets Act, a new statute aimed at preventing a dominating platform from dominating the internet.
Both governments are actively working to limit the power of Google and its competitors, including Apple, Amazon, Microsoft, and Meta.
The biggest tech platforms in the world are currently facing legal action from governments on two continents simultaneously, following twenty years of almost unfettered expansion. The United States is now formally suing all five of the largest internet platforms following the March lawsuit by the Justice Department against Apple. On March 7, the European Union began investigating Google, Apple, and Meta in accordance with its new comprehensive digital antitrust statute.
It is a watershed moment—and maybe a shift in the power dynamic between Western democracies and tech companies—for the industry and regulators who have waited years to witness the tech industry confront such intense scrutiny.
There is growing doubt that Western regulators in Brussels and Washington, DC, can effectively reform some of the most powerful and influential corporations in the world due to their slow and cumbersome approach.
According to outgoing EU competition director Margrethe Vestager, “We don’t have a lot of time” as she stated at a conference in Washington last month.
In the United States, the next election has the potential to refocus Washington’s efforts prior to the resolution of any of the cases. Companies in the EU may be able to adapt and circumvent substantial regulations for a long time if the most stringent enforcement measures are implemented.
Rival strategies are being pursued by the two biggest markets in the West. A new, comprehensive digital antitrust regulation that the European Union passed in 2022 is already being enforced. The United States is suing the biggest corporations one by one through the Federal Trade Commission and the Department of Justice, despite the lack of new legislation.
Companies, used to years of lax regulation and supportive policies, are now finding themselves entangled in two legal and enforcement battles as a result of the two approaches.
President and CEO Matthew Schruers of the Computer and Communications Industry Association—a trade group that represents Amazon, Apple, Google, and Meta—said, “These are two diametrically opposed processes afoot” in reference to the divergent approaches taken by regulators in the United States and the European Union.
Transatlantic demands are unexpected and different, he said, and this places “a considerable burden on businesses.”
Underneath the movement is a rising sentiment among lawmakers that tech companies constitute a novel form of monopoly necessitating a rethinking of antitrust regulations. At conferences in both the United States and Brussels, regulators from both coasts of the Atlantic speak with one another often. While their ideologies are very similar, their methods are influenced by different national politics.
Following the failure of antitrust investigations that resulted in significant fines—including over $8 billion for Google—the European Union passed the Digital Markets Act in an effort to legally alter the conduct of the digital titans. The five American behemoths plus ByteDance, owner of TikTok, are the only “gatekeeper” companies covered, meaning they have 45 million or more users in Europe. (In the near future, X and Booking.com may be added to the list.) Implementation commenced on March 7.
Businesses that have been found in violation of the legislation three times in eight years face the prospect of being broken up according to the law. Meta, Apple, and Google are already under investigation for possible noncompliance.
Since federal antitrust measures pertaining to technology did not pass the Senate in 2022, no such law is in effect in the United States. Instead, the Justice Department and the Federal Trade Commission, two increasingly assertive federal agencies, are suing businesses separately under antitrust statutes that are over a century old. (A federal statute is compelled to be sold by Beijing-based ByteDance, the sole company specifically targeted by a U.S. law. The law pertains to the company’s prize app, TikTok.)
In the United States, breakups are also considered a potential remedy. The Department of Justice has asked Google to undo its acquisitions, including the 2008 purchase of Doubleclick—the company’s ad tech division’s crown jewel—in a second case that targets the same area. The FTC is seeking to dissolve Meta.
The businesses claim to be following the rules. Platform companies in Europe, where the DMA comes into full force in March, have started to adjust to the expectations of the EU, sometimes reluctantly adjusting functionality and business strategies, in order to comply. The goal of these alterations is to encourage smaller competitors to provide their services to Big Tech platforms as well.
The major platforms are complying in a manner that goes against the spirit of the law, according to smaller digital companies. While more and more concessions are seeping in, opponents argue that Apple’s regulations and taxes still make it difficult for competitors to gain traction, despite the fact that the company is forced to reduce control over the App Store by permitting other storefronts. Tim Sweeney, an Epic Games competitor and an Apple critic, called Apple’s actions “malicious compliance.”
Even if Google has revamped its search results pages and made other adjustments, Yelp, an adversary of the search engine, claims that these changes “exacerbate” the problem of Google favoring its own services over the competitors.
Tech companies’ services may suffer as a result of European authorities’ attitude, according to some companies’ warnings.
“There will be some innovations which will roll out more slowly or not at all in the European Union,” said Nick Clegg, a former British politician and current president of global affairs at Meta, in an interview with HEADLINESFOREVER. However, that is a compromise that the European regulators have made. As an example, Meta’s new social media platform Threads was released more slowly in Europe than in other regions.
U.S. businesses are preparing for protracted legal fights by sitting on their hands and refusing to negotiate.
A second lawsuit against Google is set to go to trial in September, and last month, the DOJ sued Apple. In a lawsuit filed at the tail end of the Trump administration, the Federal Trade Commission sought to disband Meta and sued Amazon last year. Microsoft, another multinational IT company, successfully avoided antitrust charges last year when it overcame a challenge from the Federal Trade Commission to its acquisition of gaming behemoth Activision. Apologies, FTC.
However, American enforcers face lengthy legal processes presided over by eccentric judges, many of whom doubt that Big Tech has caused consumers as much pain as previous generations’ monopolies.
A U.S. enforcer stated that the recently aggressive strategy on American soil has not yet been tested.
As they attempt to deal with corporations that are both bigger and wealthier than the agencies attempting to regulate them, regulators on both sides of the Atlantic are already feeling the strain of the campaign’s two fronts.
At least some government officials see this as the new normal for the tech industry; they warn that corporations run the danger of legal trouble if they try to skirt the regulations governing one or the other.
The ratchet mechanism is one-way, according to Kimmelman. “We will not be returning.”