Attorneys general from 48 US states and 2 territories announced on Monday that they were launching an investigation of what they called “potential monopolistic behavior” by internet giant Google.
The bipartisan probe is being spearheaded by Texas Attorney General Ken Paxton and has been joined by all but two states, as well as the District of Columbia and Puerto Rico. Capitalism, like politics, makes for some truly strange bedfellows — the only two states that did not join the probe are California, where Google is based and where it employs more workers than anywhere else, and Alabama, where the company is building a $600 million data center project.
‘Undermining Choice, Stifling Innovation’
“Now, more than ever, information is power, and the most important source of information in Americans’ day-to-day lives is the internet, and when most Americans think of the internet, they no doubt think of Google,” said Paxton, a Republican, in announcing the probe. “There is nothing wrong with a business becoming the biggest game in town if it does so through free market competition, but we have seen evidence that Google’s business practices may have undermined consumer choice, stifled innovation, violated users’ privacy, and put Google in control of the flow and dissemination of online information. We intend to closely follow the facts we discover in this case and proceed as necessary.”
“When there is no longer a free market or competition, this increases prices, even when something is marketed as free, and harms consumers,” said Florida Attorney General Ashley Moody, a Republican, at a Monday news conference. “Is something really free if we are increasingly giving over our privacy information? Is something really free if online ad prices go up based on one company’s control?”
‘Not New For Us’
Google, which is no stranger to dealing with antitrust investigations, responded rather flippantly to the latest and greatest investigation against it to date.
“We have answered many questions on these issues over many years, in the United States as well as overseas, across many aspects of our business, so this is not new for us,” Kent Walker, Google’s senior vice president for global affairs, wrote in a blog post. Walker pointed to some of Google’s many innovations in what appeared to be an attempt to deflect attention from the allegations against the company.
“Google is one of America’s top spenders on research and development, making investments that spur innovation,” he wrote. “Things that were science fiction a few years ago are now free for everyone — translating any language instantaneously, learning about objects by pointing your phone, getting an answer to pretty much any question you might have.”
“We look forward to showing how we are investing in innovation, providing services that people want, and engaging in robust and fair competition,” Walker added.
Not Just Google
Walker’s flippancy is understandable given the fact that although tech companies are often hit with fines for their criminal and other bad behavior, these fines — even when they are of the multi-billion dollar variety — represent a tiny fraction of the firms’ overall earnings. They amount to little more than slaps on the wrist.
The announcement of the antitrust investigation of Google comes three days after New York Attorney General Letitia James, a Democrat, initiated an antitrust investigation of Facebook, the world’s biggest social media company. Attorneys from six other states and the District of Columbia have joined in the probe. The Menlo Park, California-based company is already under investigation by the Federal Trade Commission (FTC) over possible antitrust violations. The regulatory agency opened its investigation on the same day it announced it had reached a $5 billion settlement with Facebook over the Cambridge Analytica scandal and other privacy breaches.
Break Them Up!
Ethics In Tech has long advocated breaking up the biggest of the tech giants, possibly including Google. In his recently-published e-book Ethics In Tech and Lack Thereof: Sleeping Under the Cell Tower (free PDF download here), Ethics In Tech founder Vahid Razavi says Amazon should be broken up, and argues that this wouldn’t necessarily be a bad thing for big tech companies:
We’ve got to think BIG, dear reader. And what could be bigger than breaking up Amazon the way the government balkanized the once-mighty Bell Telephone monopoly back in the 1980s — during the archconservative Reagan administration, at that! Of course AT&T, one of the spinoff companies from that breakup, has gotten far too big and powerful in its own right, but breaking up Bell was one of the biggest and best deregulation efforts in modern history. It can serve as a model in our own time. This doesn’t have to be a bad thing for Amazon, either. I would submit to Jeff Bezos that he would grow even richer if he were to break up the company. This is exactly what happened over a century ago when the government broke up Standard Oil into the “baby Standards,” chief among them Exxon, Mobil, Chevron, Amoco and Marathon. That epic trust-bust created 34 separate companies, and Standard founder John D. Rockefeller continued to own significant equity in these. As each of them grew on their own, so too did Rockefeller families fortunes grow. Rockefeller was the richest man of his time. Bezos is the richest man of our time. He would still be — and perhaps be even richer — if Amazon were split up.
A handful of the candidates seeking the 2020 Democratic presidential nomination have also embraced the idea of breaking up big tech companies. Sen. Bernie Sanders (I-VT) said in July that he would “absolutely” look at breaking up companies like Facebook, Google and Amazon, citing their “incredible power over the economy, over the political life of this country in a very dangerous sense.” Sen. Elizabeth Warren (D-MA) has also proposed breaking up big tech companies.