The Department of Justice (DOJ) in the United States recently culminated its decade-long investigation into the activities of Google and filed an antitrust lawsuit against the search engine giant. The lawsuit alleges that Google has used its monopoly control (consisting of a 90 per cent share of the world market) over the search engine and digital advertising market (nearly all of Alphabet Inc’s profits in 2019 were from digital advertising) to keep out competition and suppress innovation through the usage of exclusionary contracts signed with device manufacturers such as Apple and Android, and through its revenue-sharing model for distributors. These allegedly ensure that users have no choice but to use Google, and significantly lower the quality of search engine services.
Experts with whom THE WEEK spoke to have said that such a move can be really beneficial for the Indian users and customers as the actions of the US Department of Justice might encourage the Indian administration to further look into the effects of Google’s dominance in the Indian context and whether this has stifled market innovation.
Experts point out that monopolies must be broken up when they rear their head, as they are antithetical to innovation, competition and choice, which are the pillars of a healthy market. When companies turn into dominant monopolies, smaller players with high-quality solutions are often boxed out by the dominance that the monopoly exerts on the market.
“Google is no stranger to antitrust suits, as the company is also facing a similar suit in India with regards to abuse of its dominant position in the smart TV market by putting up barriers to modifying the Android OS for smart TVs. This is Google’s fourth antitrust suit in India, and one must wonder whether this trend points to a real problem. If the Indian government passes measures to curtail Google’s control over its core markets, it would allow several smaller, innovative and home grown companies to fill the space, which will further boost the quality of products available to the Indian consumers. With emerging anti-Google sentiments stirring amongst Indian start-ups, fomented in part due to the recent play store controversy, such measures might not be far off,” pointed out Ashok Kadsur, co-founder of SignDesk.
It may be recalled that Google flourished after the antitrust settlement of Microsoft over two decades ago and is now caught in a similar web. Though the Microsoft case did not greatly impact its business or geographical expansion and possibly Google may see a similar trend without much to worry in India. “The local laws of antitrust driven by the CCI in India over the last decade have not dented market dominance of many Indian or MNC players. I feel that it is unlikely that the Google case in the US will have an impact in India except for a few ripples here and there,” remarked Subramanyam Sreenivasaiah, CEO at Ascent HR.
Many have welcomed the antitrust lawsuit against Google in the US and feel that it will go positively for many small businesses and start-ups in the country. There is no doubt that businesses have been worried about lack of competition for Google in India. Since Chrome, Android, YouTube, Google Search, Gmail, Google Photos and Google Maps are ubiquitous in India already, Google is getting extremely powerful in the country. It is also becoming monopolistic as far as digital marketing efforts of any firm is considered.
“In the wake of recent events related to the Google play store and the debates about the ethics behind political advertising, this development in the US is significant. One can be optimistic that ethical behaviours around profits verses profiteering will find grounding. It doesn’t matter if one is a small business like a cake shop, salon, a repair shop or a large business like TCS, Airtel, Unilever, everyone needs to reach its target audience. Google knows the user behaviours of all; and hence could charge a huge fee for letting the advertisers leverage the user behaviours,” Aditya Narayan Mishra, director and CEO of CIEL HR Services, told THE WEEK.
Some experts are also of the opinion that the antitrust investigation led by the US attorney general might find it difficult to prove their case as nowhere is Google employing the standard monopolist techniques that can lend itself to be charged under the US monopoly laws.
“The practices that Google has adopted to enhance their market reach are also the same that are available for other market participants. Google's case informs us that some superior technologies, once they are adopted, have such a sticky relationship with consumers, that it becomes inevitable for such companies to evolve into a natural monopoly,” said Alok Shende of Ascentius Consulting.