Don’t Be Evil: Why the EU Thinks Google Is a Monopoly
For anyone with an Internet connection, Google is all but omnipresent: it’s how we search the web, get directions to our next destination, and for some of us, it powers the operating system in our smartphones, tablets, or personal computers.
But there’s a dark underbelly to Google’s business model—one that belies both its perceived altruistic nature and its self-chosen “Don’t be evil” motto. No; I’m not saying Google is inherently evil. If you’re even a little bit Internet savvy, you know there’s a reason why Google can afford to give away its most valuable services for free. Instead, let’s just say that there’s a reason why Google’s motto isn’t “Don’t be morally ambiguous.”
The problem we’re discussing here lies not in the fact that Google has influence, but rather in how it uses that influence. In the US, Google has found a friend and ally in Obama’s White House. But the European Union has just begun a new chapter in their dealings with Google—a chapter that begins with the word monopoly.
At stake is a potential fine of $6.4 billion—a figure that represents about 10% of Google’s entire operating revenue.
The EU’s Argument
On March 15th, 2015, the EU made public its allegations that Google is illegally maintaining a monopoly in Europe by using uncompetitive and restrictive practices to solidify Android’s market share in the mobile phone industry.
Below is the crux of the EU’s argument, lifted straight from their published statement. Keep in mind that the passages emphasized in bold appeared as such in the original document:
- Google systematically positions and prominently displays its comparison shopping service in its general search results pages, irrespective of its merits. This conduct started in 2008.
- Google does not apply to its own comparison shopping service the system of penalties, which it applies to other comparison shopping services on the basis of defined parameters, and which can lead to the lowering of the rank in which they appear in Google’s general search results pages.
- Froogle, Google’s first comparison shopping service, did not benefit from any favourable treatment, and performed poorly.
- As a result of Google’s systematic favouring of its subsequent comparison shopping services “Google Product Search” and “Google Shopping,” both experienced higher rates of growth, to the detriment of rival comparison shopping services.
- Google’s conduct has a negative impact on consumers and innovation. It means that users do not necessarily see the most relevant comparison shopping results in response to their queries, and that incentives to innovate from rivals are lowered as they know that however good their product, they will not benefit from the same prominence as Google’s product.
Got it? Good. Now—I know that most of what you’ve just read sounds painfully dull, so I’m going to try to jazz it up for any laymen in the room.
How Does Google Work?
But before I do that, we need to make one thing plainly clear: Google has more control over the inner workings of the Internet than any other company (or government agency, for that matter) on planet earth. This did not happen overnight, but it also didn’t happen by fiat, bullying, arm twisting, or any other coercive means. It simply happened because Google built the best tool we’ve seen to date for searching the web—the one we all used, and have even gladly turned into a verb.
In the years since, Google has been forced to adapt to its own success, as well as to the apparently tireless efforts of spammers and marketers to take advantage of every loophole and every line of code that makes up Google’s search algorithms.
And what are these algorithms? They are the laws that determine which websites, products, and services appear in search engine results pages (SERPs). They take into account things like the number of links pointing to a website, the popularity and traffic of a given website, and a host of other factors that Google alone knows about.
And these algorithms are changing almost constantly. So constantly that Internet marketers frequently have difficulty keeping up.
The point is that Google has, over the years, developed a mechanism that we all use—whether we’re aware of it or not—that gives weight to the sites in which we have unknowingly placed our trust, whether by linking to them or simply visiting on a regular basis. It’s the rulebook that governs the ebb and flow of content on the web.
And only Google knows fully how it works.
As a result of this, Google is in a unique position to use its algorithms to nudge users toward its own products and services. What the EU is objecting to here is that Google is apparently unwilling to play by their own rules.
And Now the Counter-Arguments
Naturally, there is an abundance of counter-arguments. You might point out, for example, that Internet users have a variety of other search engines to choose from: Bing, DuckDuckGo, Yahoo, and—if the rumors pan out—even Apple may soon be joining the fray.
You may also argue that any privately owned company has a right to operate as they see fit—provided they aren’t bringing harm to another entity. And that’s the sticking point; Google is causing demonstrable harm by giving its products precedence over companies that have actually earned a favored position in search results.
But to make this argument effectively, the EU would have to reconsider the language they’re using. In other words, this isn’t just about maintaining a monopoly; what we’re talking about here suggests that Google has a social responsibility to act in fairness, since what they’ve built is hardly a product used in a vacuum, but rather a service that the entire developed world has come to rely on. If they believe their products are superior, they should be comfortable letting them compete the way they expect every other company to.
Is Google within their rights to favor their own products? I suppose that depends on your definition of fairness. But is it a moral gray area? Unquestionably. But that’s why we have governments and international agencies: to deal with the gray areas.
Google As a Force for Good
The last thing I want to mention before bringing this to a close is the fact that Google’s relentless pursuit of profit is not done solely for their own gain, as much as we’d like to believe it so. The truth is that Google is using their billions to do some amazing things in the world. Here are just a few:
- Pioneering self-driving automobile technology that will (literally) change the world as we know it
- Exploring the possibility of using balloons to bring Internet connectivity to remote parts of the world
- Bringing affordable, lightning-fast fiber Internet to cities that heretofore had no choice in service providers
- Lobbying Congress on important issues like social justice and equal opportunity
The point is this: for all their creepiness, Google is doing amazing things. I suppose you’ll have to decide for yourself—as I’ll soon have to—what kind of price we’re willing to pay for that kind of progress.