Following last year’s start of inquiries, the U.S. Together with lawyers from 11 U.S. states, the Department of Justice ( DOJ) filed a complaint against Google on Tuesday claiming that the corporation retains monopolies in online search and advertising and violates regulations banning anti-competitive market practices.
It’s the first federal prosecutors’ antitrust case filed against a software firm since the Department of Justice in the 1990s brought charges against Microsoft.
Google argued that the activities of Microsoft were anticompetitive back then, and yet, now, Google is deploying the same playbook to preserve its own monopolies, “the complaint reads.” “The time has come to stop Google’s anticompetitive actions and restore competitiveness for the sake of American customers, advertisers, and all businesses now relying on the internet economy.”
No Democratic state attorneys general entered the suit. Democrats and Republicans alike, state attorneys general intend to proceed with their own investigations, suggesting that further state charges or backing could be on the way. Both the antitrust investigation concluded earlier this month by a congressional subcommittee and the recent DOJ case support breaking up tech firms as a possible remedy.
The 64-page complaint characterizes Google as a “monopoly internet gatekeeper” and explains in depth the logic behind the case, detailing the start of the business at Stanford University in the 1990s alongside deals made in the past decade with companies such as Apple and Samsung to preserve the supremacy of Google. Access to personal data and artificial intelligence are also essential to Google’s strength and ambitions for the future. We look at the various ways artificial intelligence plays a role in the antitrust case against Google in this story.
Online search, which is driven by algorithms and automated web crawlers that scour web pages for information, is the best place to begin when investigating the role AI plays in the antitrust case of Google. Personalized search results made it possible to collect personal data that began in 2009 and can now be searched by Google for photos , videos, and even songs that hum. The $40 billion online search industry is dominated by Google, and that dominance works like a self-reinforcing cycle: more knowledge leads to more algorithm training data, competition protection, and more successful advertisements.
The complaint reads, ‘General search services, search advertising, and general search text advertising require complex algorithms that constantly learn which organic results and advertisements respond best to user queries; the volume, variety, and speed of data speeds up the automated learning of search and search advertising algorithms.’ “The additional scale data enables enhanced automated learning for algorithms to deliver more relevant results, particularly on ‘new’ queries (queries seeking recent information), location-based queries (queries asking about something in the vicinity of the searcher), and ‘long-tail’ queries (rarely used queries).”
Searches are now mostly carried out on mobile devices , such as smartphones or tablets. Google switched to exclusionary deals with smartphone sellers such as Apple and Samsung as well as revenue sharing with wireless carriers to establish monopolies in mobile search and create an insurmountable scale for competitors, the complaint claims. In fact, the Apple-Google symbiosis is so central that, according to the DOJ filing, losing it is referred to by Google as “code red.” An unidentified senior Apple employee corresponding to their Google counterpart said it was the vision of Apple that the two companies work “as if one company.” Google currently accounts for four out of five U.S. web searches and 95% of smartphone searches. Google estimated last year that almost half of all web traffic came from Apple devices, while 15-20 percent of Apple ‘s revenue came from Google.
Data at scale
Hundreds of millions of users were effectively captured by exclusive agreements which placed Google apps on mobile devices. These data advantages were referenced by an antitrust report, claiming that “Google’s anticompetitive activity effectively removes the ability of rivals to develop the scale needed to compete.”
The antitrust report Congress published earlier this month often mentions, in addition to the DOJ report, the network impact achieved by big tech firms as a major barrier to entry for smaller companies or start-ups. “Especially when combined with machine learning and AI,” the report reads, the incumbents have access to large data sets that give them a major advantage. Companies with better data access can use that knowledge to better target customers or enhance the quality of the product, attract more customers and, in turn, produce more data, an advantageous feedback loop.’
In the congressional study, network effects also occur in reference to mobile operating systems, public cloud providers, and AI assistants such as Alexa and Google Assistant, which strengthen their machine learning models by gathering data such as voice recordings.
Better data portability to help small companies compete with tech giants is one possible solution proposed by the Congressional inquiry.
According to the Congressional report, one aspect of preserving Google’s search monopoly is control of new search access points. Although Google searches started on desktop computers, today ‘s smartphone is king, and devices such as smartwatches, smart speakers, and IoT devices with AI assistants such as Alexa , Google Assistant, and Siri are quickly emerging. AI is used by virtual assistants to transform speech into text and predict the intent of a user, becoming a new battlefield. The voice “will become the future of search,” an internal Google document announced.
The growth of searches through Amazon Echo devices is why Google has previously been suggested by a Morgan Stanley analyst to offer a free speaker to everyone in the world. In the end, he concluded, giving away hundreds of millions of speakers would be cheaper for Google than losing its edge to Amazon.
The scale given by Android and native Google applications also appears to be a key component of the ability of Google Assistant to understand or translate dozens of languages and gather voice information around the globe.
Today, searching is mainly performed on mobile devices. That’s what drives the symbiotic relationship between Apple and Google, where, in return for making Google the de facto search engine on iOS phones, which still make up about 60 percent of the US smartphone market , Apple earns 20 percent of its overall revenue from Google.
The DOJ complaint claims that because internet searches are gradually taking place using voice commands, Google focuses on Google Nest IoT devices and smart speakers. The company wants to dominate the next common search query environment, the DOJ says, whether it is wearable devices such as smartwatches or Fitbit activity monitors that Google announced plans to acquire around one year ago.
“Google acknowledges that its ‘hardware products also have HUGE defensive value in virtual assistant space AND fight query erosion in the core search market.’ Google sees that ‘Alexa and others may increasingly be a replacement for search and browsers with additional complexity and drive through screen devices,'” the DOJ report reads. “Google has also hurt competition by increasing the prices of competitors and foreclosing them from successful delivery platforms, such as delivery through voice assistant providers, stopping them from challenging Google’s overall search services monopoly substantially.”
In other words, only Google Assistant can get access to a microphone for a smartphone to respond to a wake word such as “Hey, Google,” a complaint tactic that says rivals with handicaps.
In the antitrust study published by a Democrat-led antitrust panel in Congress, AI like Google Assistant also appears prominently, referring to AI assistants as efforts to “lock consumers into knowledge ecosystems.” The best way to spot this lock-in is when you consider that Google prioritizes YouTube, Apple wants you to use Apple Music, and Amazon wants users to subscribe.
The legislative study also records the recent history of the acquisition of startups by major tech firms. It argues that corporations such as Google have acquired startups in new fields such as artificial intelligence and virtual reality to escape competition from up-and – coming competitors.
You would be disappointed if you expect a swift decision by the DC Circuit Court in the antitrust case against Google, which does not seem at all likely. Antitrust proceedings appear to take years, using the 1970s case against IBM and the Microsoft litigation in the 1990s as a reference. In fact, the next time voters select a president in 2024, it is not outside the realm of possibility that this case may still happen.
What is apparent from the terminology used in both the US v Google and the Congressional Antitrust Report is that in order to preserve open markets and a stable digital economy, both Democrats and Republicans are willing to discuss separating business divisions. What’s also evident is that both the Department of Justice and Congressional antitrust lawmakers see action as necessary, partially based on how Google manages personal data and artificial intelligence.
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