An antitrust review of Google’s business practices has been a long time coming, and it looks like the U.S. Justice Department is going to make moves on that front very shortly. But there’s growing concern that the case against the search giant will amount to nothing but a political manoeuvre. Adding to Google’s headaches, it’s now reportedly in the crosshairs of China’s regulators as the tech trade war spills out to enlist more soldiers.
Reuters reported on Wednesday that China could soon launch an antitrust probe into Google that would focus on whether its business practices surrounding the Android mobile operating system are actively stifling competition. Citing sources speaking on the condition of anonymity, Reuters claims that regulators in China were prompted to consider the case by the embattled Chinese telecom firm Huawei. The proposal has reportedly already been submitted to the nation’s top antitrust cops for review.
Huawei has been the focus of aggressive manoeuvres by U.S. officials who claim, without offering evidence, that the company’s equipment represents a national security threat because it could be used by China’s government for the purposes of spying. Huawei has denied that it operates differently than any other big tech firm, but that didn’t stop the Trump administration from issuing an order blocking U.S.-based entities from doing business with the company in 2019. And while Google obtained a temporary licence to continue working with Huawei, that authorization expired in August.
Since the ban was implemented, Huawei has blamed the blacklist for billions in missed earnings, and it’s made efforts to replace Google’s products with its own in-house offerings. According to Reuters, China is now looking to the examples set by regulators in Europe who have successfully taken on Google’s competitive practices in the past. In particular, Europe managed to levy a record-setting $US5.1 ($7) billion fine against Google for its requirements that manufacturers pre-install products like Chrome and Gmail on devices that run the full-featured Android OS. That decision forced Google to launch a bidding war for which search engine will come as the default on Android devices — a process that has brought fresh allegations of unfair practices from some competitors.
Reuters also reports that the U.S. Justice Department is expected to file a lawsuit against Google as soon as next week, and the agency is currently trying to gather state attorneys general to join the case. It’s unclear what will be the focus of the DOJ’s case against Google. But sources speaking with Reuters anonymously said that investigators have been looking into Google’s hoarding of data to disadvantage search engine rivals as well as its control over the advertising space directly under search results on its homepage.
But the story of the DOJ investigation has been plagued by the appearance of political theatre, and earlier this month the New York Times reported that investigators were given an “arbitrary” deadline to wrap up their inquiries by the end of September. “Most of the 40-odd lawyers who had been working on the investigation opposed the deadline,” the Times wrote. “Some said they would not sign the complaint, and several of them left the case this summer.”
The growing worry is that Attorney General Bill Barr is just trying to score some points before the November election by giving the appearance that his department is doing something about the dominance of a handful of tech companies that has led to complaints on both sides of the aisle. At a time when it’s increasingly rare to see a major antitrust case succeed, there’s justifiable fear that a rushed lawsuit by the DOJ might be politically expedient in the short term but hand Google a victory in the long run.
The DOJ’s investigation isn’t the only thing that Google has to worry about; there are also active inquiries into the company by 50 U.S. state attorneys general, the FTC, the House Antitrust Subcommittee, and the Senate Antitrust Subcommittee. In fact, the House committee will be holding a hearing on Thursday to review proposals, “strengthen antitrust laws and restore competition online.” Google is not the only subject of that hearingm and its peers like Facebook, Amazon, and Apple are all facing increasingly intense accusations of anticompetitive behaviour.
Which brings us back to the fact that everything hinges on the election. Who knows what U.S. relations with China will be like if Trump is voted out of office. Google could end up dodging a bullet if things become more normalised. And if the DOJ does launch a Potemkin lawsuit, we could see it delayed or reevaluated by a new administration.
It’s not just the DOJ that seems to think that it’s important to make competition moves before the election. Just today, Facebook began integrating Instagram and Facebook’s messaging systems in a broad effort to consolidate its world-dominating products. The strategy is widely seen as a hail mary effort to make it more difficult to break up Facebook if antitrust action is taken.
Gizmodo asked Google for comment on this story but did not receive a reply. As with everything else right now, there’s just no predicting the future after November 3.