Whether the monopoly of internet search services, which have become an integral part of our everyday lives, is putting consumers at a disadvantage will be contested in court.
The U.S. Justice Department has filed a suit against Google for antitrust violations, alleging that it has impeded competition by various means to protect its monopoly in the online search market.
This is the first time in about 20 years that the Justice Department has filed a full-fledged antitrust lawsuit against a U.S. information technology firm, since the case against Microsoft in 1998. The U.S. authorities have been seen to be cautious about regulating the giant IT companies known as GAFA (Google, Apple, Facebook and Amazon). But this can be said to be a major change in policy.
In the past, there were cases in which courts ruled that major companies had violated the antitrust law and they received a correction order and an order to split up their businesses.
It is hoped that the actual situation surrounding this monopoly will be clarified and fair competition will be maintained.
According to the lawsuit, Google has concluded contracts that prohibit manufacturers of smartphones equipped with Google’s operating system and others from pre-installing any search services other than Google’s.
Google reportedly paid up to about ¥1.3 trillion a year to Apple, which is a rival firm in terms of OS and has about a 60% share of the smartphone market in the United States, asking Apple to introduce Google’s search function.
Google’s share of online search services in the United States is about 90%. Instead of making the services free, the company collects a huge amount of information, such as a user’s age and browsing history, and uses that information to distribute digital advertisements to make huge profits. It is unclear how the advertising rates are determined.
On the internet, the more data is collected, the more useful services can be provided, which could led to “enclosing” more users. There are also deep-rooted concerns about the handling of personal information.
It would be a serious problem if the options were limited and the relatively high advertising costs were indirectly passed on to consumers.
Google intends to wage an all-out battle in court, saying that people choose to use its services on their own. As long as it argues against the authorities, Google must dispel such concerns from users by providing thorough explanations and making its digital advertising fees transparent.
The European Union has taken the lead in regulating giant U.S. IT companies. Since 2017, Google has been fined a total of more than ¥1 trillion for violating the EU’s competition law.
In Japan, cases of GAFA “bullying subcontractors” by using their stronger position have also been pointed out. Therefore, next spring, a new law will come into force requiring them to provide their annual reports on transactions.
IT companies operate around the world. The Japanese government should closely monitor the outcome of the lawsuit in the United States and seek international cooperation in regulating them.
— The original Japanese article appeared in The Yomiuri Shimbun on Oct. 23, 2020.