Breaking up Google using U.S. antitrust law: an overview from Matt Stoller
Alphabet workers news
With a variety of U.S-based antitrust investigations of Google gaining stream, Matt Stoller, director of research at the anti-monopoly American Economic Liberties Project, spent some time in his recent public newsletter to outline the issues and draw some historical parallels. Although the focus of Stoller's June 27 newsletter article is on whether U.S. Attorney General Bill Barr, widely accused of being corrupt, has the competence to adequately execute on a broad-based antitrust action against Google, in the extracts below I'll focus on Stoller's analysis of the need and the benefits.
Breaking Google into multiple, potentially dozens, of smaller firms would likely be good for workers, as it would weaken Google's growing monopsony power in the tech industry, strengthen worker power relative to each of the smaller firms, and force the mini-Googles to compete with each other for labor. Long-time Google employees might recall that the only time in its history that the company gave an across-the-board raise to all employees, and overhauled the bonus system to pay more in guaranteed cash and less in contingent bonus pay, was back in 2010 when Facebook was extremely aggressively, and successfully, recruiting Google workers. Cross-firm competition for workers does matter.
Some extended extracts from the recent issue of Stoller's newsletter, "BIG", appear below. Emphasis is mine. You can subscribe directly at mattstoller.substack.com Matt has also issued a call for people willing to share stories, in the same issue:
"When the Federal government finally launches an antitrust case against Google, it will be important to have a community of people who know what it’s like to deal with this incredibly complex institution. So if you’ve had a problem with Google from a business standpoint, or if you’ve worked there, and would be willing to share your experience, let me know. My organization has set up a form here. We’ll keep your information private, unless you indicate you’d like us to share it."
- Bruce
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https://mattstoller.substack.com/p/will-bill-barr-screw-up-the-google
Will Bill Barr Screw Up the Google Monopolization Case?
... The sheer number of markets Google dominates - mobile operating systems, general search, online video, mapping, email, display advertising, and browsers - lets the corporation structure the internet itself. It is so big that almost by accident it makes enemies, stepping on an endless number of businesses without even noticing it was doing so.
So there’s a broader anger at this point against Google that goes beyond just political officials. Black creators on YouTube recently announced lawsuit against the corporation over racial discrimination, and conservatives have had enough of Google, calling for the corporation to be broken up because of its monopolization of ad revenue and demonetization of sites on which they rely. Corporate opponents of Google, everyone from Yelp to the newspaper industry to Oracle to small businesses who feel taxed and threatened, want a case. Microsoft’s Brad Smith, for instance, just argued for an antitrust case against Google for its Android app store.
There is also now ample intellectual firepower for a case; in the center-left legal academy, former Obama antitrust enforcers Fiona Scott Morton and David Dinielli laid out two cases, one against Google’s search monopoly and one against its ad tech business lines. Former ad executive and legal scholar Dina Srinivasan wrote a comprehensive analysis of Google’s stock market-like system that lets itself serve as a middleman in nearly all online advertising markets. Frank Pasquale, one of the earliest critics of Google, is outlining a Digital New Deal, which includes antitrust enforcement, transparency, and non-discrimination principles.
... There are a lot of analogies with Google to the Microsoft case, because Microsoft is the last big antitrust suit, and Microsoft was in modern digital technology. But I don’t think that analogy is quite right. Microsoft was relatively speaking a simple company, it had an operating system monopoly and a monopoly with Office. Its power came from contractual relationships with IBM and original equipment manufacturers of personal computers, which made it the only on-ramp to the PC. The remedy for Microsoft was to break it up into two companies, an OS and an applications subsidiary (though the remedy was overturned on appeal).
Google by contrast has eight products with more than a billion users, and it is the result of hundreds of acquisitions over twenty years. Google runs a set of complex businesses with market power in lots of different areas. It looks a lot more like Standard Oil, and Standard Oil in 1911 was broken up into 34 different companies, including oil refining, distribution, pipeline, manufacturing, and transportation companies...
In fact, Google is so dominant and has been dominant for so long that we sometimes forget what its component parts really are. Google.com is a consumer-facing site, but it relies on a web index, and there’s no reason these two entities have to be in the same corporation. This is true for the Map consumer-facing site and the map index data. Chrome, Android, Google Play, YouTube, and Google Drive are all very large businesses in and of themselves, and there’s simply no reason they couldn’t be split up further. Google Analytics is a monster, so is Gmail. The whole adtech ‘stack,’ which is basically a stock market for buying and selling ads, is another Goliath that can be pulled apart.
When you really step back, Google is squatting on a range of potential industries, stifling their potential. Maps is a great service, but imagine if anyone could license mapping data to build their own product. The same is true with search. If there were actually competition, so you could license Google’s index for a search engine, we’d see an explosion of innovation. Right now buying or selling ads is impossible without going through Google, but if that weren’t the case, we’d likely see new ad models emerging and a new publishing ecosystem. Android could get a lot better if it weren’t tied to search.
In other words, there’s a world inside Google waiting to be unlocked. That’s why this suit is important, and that’s why Barr, and state AGs, shouldn’t rush it.
(Also, this is one more reminder that if you have had problematic business dealings with Google, you can tell my organization about it here.)
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