Search and advertising giant Google and its parent company Alphabet are about to face more regulatory scrutiny, but this time from the state level:
Fifty attorneys general are joining an investigation into Google over possible antitrust violations, Texas Attorney General Ken Paxton, the initiative’s leader, announced Monday. The news confirms reports last week about the bipartisan investigation into Google’s practices.
The probe includes attorneys general from forty-eight states, the District of Columbia and Puerto Rico.
Washington, Oregon, Idaho, Alaska, and Montana are all on board. The only states that aren’t participating are California (where Alphabet is headquartered) and Alabama. The Los Angeles Times reports that California’s Attorney General declined to provide a rationale for why the Golden State isn’t a party to the probe.
That’s left many Google critics scratching their heads.
“I just do not understand why California is not a part of this effort,” said John Simpson, who served as the privacy and technology project director at Consumer Watchdog, a nonprofit advocacy organization, until he retired earlier this year. “Google has monopolized the market and really needs to be held accountable for that.”
It is nonetheless remarkable to see Democratic and Republican attorneys general from the country’s other states (minus Alabama) teaming up to investigate Google. Regardless of their political views, privacy and fairness are on the minds of these AGs, as their statements to the press regarding the probe make clear.
“We have fifty attorneys general from across the nation who are involved in this investigation that we’re leading from Texas… This is a company that dominates all aspects of advertising on the internet and searching on the internet as they dominate the buyers’ side, the sellers’ side, the auction side and even the video side with YouTube.”
– Texas Attorney General Ken Paxton, a Republican
“When there is no longer a free market or competition, this increases prices, even when something is marketed as free, and harms consumers. Is something really free if we are increasingly giving over our privacy? Is something really free if online ad prices go up based on one company’s control?”
– Florida Attorney General Ashley Moody, a Republican
“The state attorneys general, they are an independent bunch… And they can be quite tenacious. So I’m very confident that this bipartisan group is going to be led by the facts and not be swayed by any conclusion that may fall short, if you will, if it’s inconsistent with our facts, on the federal side. So we’re going to do what we think is right based on our investigation.”
– District of Columbia Attorney General Karl Racine, a Democrat
“There’s no question that Google is the dominant player when it comes to internet searches with nearly ninety percent of the [market’s] share… And there’s nothing wrong with being the dominant player if it’s done fairly. That’s what our investigation intends to uncover and reveal — whether Google is playing by the rules and acting fairly.”
– Utah Attorney General Sean Reyes, a Republican
The reason the above quotes are mostly from Republicans, by the way, is that the press conference announcing the probe mostly featured Republican AGs. Which, again, is very significant considering that Republican elected officials are usually sympathetic to the country’s captains of industry and their armies of lobbyists.
NPI has been concerned for more than a decade about Google’s business practices and its persistent, unending efforts to undermine everyone’s privacy.
The CEO of Basecamp, a small software firm in Chicago, helped set off the newly skeptical questions this week when he blasted Google for its policy of allowing anyone to buy ads related to a brand name; if someone searches Google for “Basecamp,” they might first see an ad for the company’s rivals.
“When Google puts four paid ads ahead of the first organic result for your own brand name, you’re forced to pay up if you want to be found,” Basecamp’s CEO Jason Fried said on Twitter on Tuesday.
“It’s a shakedown. It’s ransom.”
We agree. And it’s time for our elected representatives to do something about it. When a market becomes hopelessly rigged, intervention is required.
There’s no such thing as a “free” market, contrary to what groups like the Washington Policy Center assert. All markets are constructed for someone’s benefit, and it is essential that we continuously ask the question Who is this market serving when evaluating a market’s performance. At NPI, we believe markets should operate fairly and contribute to the broad prosperity of all.
Google has become synonymous with search, and it has used its dominant position in that market to create a lucrative advertising business. Small businesses wanting to be found by new customers have no choice but to play by Google’s self-serving rules. There are other search engines, but they have a very small market share.
This is something that is undoubtedly going to be a focus of the antitrust probe.
(Speaking of other search engines, we recommend switching your default search engine to DuckDuckGo, which doesn’t track you and offers superior results.)
The European Union has for years been the only public entity in the world really putting Google under a regulatory magnifying glass.
That now seems to be changing with the launch of federal and state level probes into Google’s business practices. In the 1990s, Microsoft came under similar scrutiny, and was ultimately taken to court over its business practices.
At one point, a federal judge ordered Microsoft broken up. Microsoft appealed that ruling and was able to avoid being split in two, but the litigation sparked reforms to the company’s business practices. In our view, the Microsoft of today is a better behaved company than the Microsoft of the 1990s and early 2000s.
We don’t see Google abandoning its “surveillance capitalism” business model on its own. Google needs an intervention so that it becomes a company less dominant in search and advertising and much more respectful of everyone’s privacy.
Here’s hoping it gets one.