The siege on Google intensifies on both sides of the Atlantic

Google will appeal a Washington, D.C. judge’s ruling that it is a “monopoly.” The corporation is far from happy with the decision, which marks a shift that has recently taken place in the United States regarding the regulation of aggressive practices among major technology companies. The firms’ modus operandi has long been questioned in the European Union, which instituted ad hoc regulation that allows it to act more quickly and forcefully — as with the Digital Markets Act (DMA) — and has proposed requiring Alphabet, Google’s parent company, to split up its advertising business. The company behind the internet’s ubiquitous search engine is not alone in facing charges over what authorities call “anti-competitive practices”: Amazon, Apple, Meta and Microsoft are in the same boat.

After Monday’s U.S. ruling, whose penalties have yet to be announced, the spotlight is currently on Alphabet and its search engine. In its statement on the ruling, the company said: “This decision recognizes that Google offers the best search engine. Given this, and that people are increasingly looking for information in more and more ways, we plan to appeal,” it announced.

The company has also been the target of lawsuits and antitrust charges in Brussels, including a European Union Commission for Competition probe that has been ongoing since 2021. It’s been levied with some of the largest fines in the history of the European Commission, more than $8.7 billion stemming from three cases that, for now, the company has barely managed to lower in court. At the end of the summer, the final ruling on one of those cases is expected: the probe into Google Shopping, which resulted in a $2.64 billion fine over the illegal advantage Google gave to its comparison shopping service via its search engine.

The biggest question related to the European Commission lawsuits is whether the Californian company will be forced to split up its business. Such an outcome was suggested in a statement of objections sent just over a year ago, which considered the company’s presence throughout the digital advertising chain so overwhelming that the Commission concluded it was “the abuse of a dominant position” and that “only the mandatory divestment by Google of part of its services would address its competition concerns.” Few in Brussels doubt that the Vice-President of the European Commission and Commissioner for Competition, Margrethe Vestager, would like to settle the matter before the arrival of the new Commission, which will in theory take place on November 1, and of which she will not be a member.

But the threat of the forced divestment of Google’s advertising activity is not only being posed in Europe. The U.S. Department of Justice and eight other states (Virginia, California, Colorado, Connecticut, New Jersey, New York, Rhode Island and Tennessee) have also demanded such a split in a lawsuit that is currently being heard in Virginia courts.

“That would be a structural change in the market,” notes Juan José Ganuza, professor of economics and business at Barcelona’s Universitat Pompeu Fabra, who says that such an outcome is gaining supporters among academics who study markets and competition. Ganuza, who is also the director of markets, regulation and competition at Funcas, a Spanish economic research institute, says that these kinds of “solutions and remedies [the Commission of Competition’s technical term for corrective measures] have more precedent in the United States than in Europe.”

Alphabet and its affiliates are not alone in facing such possibilities. In fact, in Europe, during the last few months, more and more tech firms are facing intense regulatory scrutiny. For example, on July 1, the European Commission announced an investigation into Meta’s Instagram and Facebook advertising model. It did so under new regulation that shifted the burden of proof, meaning that large companies cannot resort to delaying investigation and enforcement processes for years to the point that, by the time a final resolution is reached, the market has already changed.

“Today, this decision is being applied all over the world. The United Kingdom has also settled on it,” explains Ganuza, who clarifies that in the United States, the Biden administration has changed the basic precepts of competition regulation policy to make it more consumer-friendly. That means, the professor points out, that the November elections between Donald Trump and Kamala Harris could have major ramifications in this area.

For Meta, the stakes are higher in the United States, where the Federal Trade Commission and 40 states went to court in 2021 over its acquisition of Instagram and WhatsApp.

Similarly, Apple is being scrutinized on both sides of the Atlantic in lawsuits that are similar, at least when it comes to their bottom line: that the California-based technological giant makes it difficult for other companies to offer alternatives to its own products. Until recently, Apple had not received large fines from Brussels or the United States. That began to change this year, when the European Commission imposed a $1.96 million sanction, equal to 0.5% of the company’s global earnings. Currently, the firm is attracting even more attention for its refusal to comply with DMA requirements.

Amazon is another company with lawsuits pending in the United States and European Union. In contrast, Microsoft has only been subject to investigation in Brussels. Having escaped the attention of the Competition Commission for many years, after having been at the center of one of its most emblematic investigations at the turn of the century, it has returned to the spotlight by committing a potential antitrust violation in linking its Teams application by default to Office 365 and Microsoft 365.

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