Watching: Google’s first monopoly trial in USA
The first monopoly trial of the internet era begins next week as US courts decide whether to break up Google's parent company, Alphabet. The trial will determine if the company is too big and engaged in unfair trade practices. The outcome will have implications for other technology giants and governments worldwide, including the EU and India, which are implementing legislation to regulate technology companies. India is also supporting the Beckn Protocol, a language that allows devices and services to exchange information, preventing monopolies from forming. There is divided public opinion in the US on whether Google should be broken up, with some believing it has become too big for American interests.
On Tuesday, next week, one of the most compelling proceedings in contemporary business will begin in the American courts. This will be the first monopoly trial of the internet era. Judge Amit Mehta will start listening to arguments by lawyers for and against breaking up the $1.71 trillion behemoth that is Alphabet, Google’s parent company. Sundar Pichai, the CEO of Alphabet will be among those called in to testify. Mehta has an unenviable task on hand: Decide if the company has gotten too big, engaged in unfair trade practices, and must be broken up. How this narrative plays out is being watched by other technology giants and governments world over—India included.
This is because how big Google has gotten is beginning to concern governments world over as well. The European Union (EU) is at work to implement the Digital Markets Act (DMA). This has been described by many commentators as one the “world’s toughest pieces of legislation that targets technology companies”. So, what does this Act do?
It insists that technology companies open their doors up. By way of example, the DMA compels technology companies to seek a user’s permission before tracking people so it may serve them ads. That’s not how things are now. If another example be needed, the DMA insists that on phones and laptops, Apple and Google will have to allow other app stores as well—and not just Apple’s App Store or Google’s Play Store. That isn’t how things are now either. Instead, the DMA insists users have the flexibility to choose where they buy from. The belief is that if more app stores exist, monopolies will not exist.
Australia is following the lead set by the EU and is aggressively going down this path. Then there is India. Earlier in May, this column had pointed to the concern’s technology policy makers have felt with the growing dominance of technology companies. And that is why India’s tacit support to the Beckn Protocol that is being built out of India.
Very simply put, this is a common ‘technical’ language that everyone can use to seamlessly connect with and work together. Just like a translator helps people speaking different languages understand each other, this Protocol allows devices and services to understand and exchange information, regardless of their differences. The immediate outcome of this is that monopolies or duopolies cannot raise their heads.
One school of thought has it that the Beckn Protocol is a government creation. It is inevitable then that all entities which embrace this Protocol will have to play by what the Indian government thinks is right. Assuming that is true, there’s another way to look at it as well.
The Beckn Protocol is Digital Public Infrastructure—much like roads and habitable cities are public infrastructure. It is the government’s job to ensure this infrastructure is created and it exists. Silicon Valley is a case in point. The US government played a significant role in supporting the growth and development of the place during its early days.
Given this background, what can we possibly expect in the next few months? Will Google be broken up? If commentary emerging from the US is anything to go by, public opinion is divided. There is a school of thought that believes Big Tech has gotten too big for American interests and must be broken up. What is unclear is, does the American government have the intent or the capabilities? The last time something similar had happened was when Microsoft was taken to court on much the same grounds. But that was in 1998 and the company arrived at a settlement with the US government’s Department of Justice in 2001.
Most technology observers outside the US aren’t convinced the American government is inclined to break Google up. “It seems unlikely that the US would upset Google at this point. The government needs Google badly to further their AI ambitions,” reckons the Bengaluru-based Tanuj Bhojwani who is a founding member of the Digital Public Goods Alliance of India. He has a point. Google has invested upwards of $200 billion to further their interests in AI, most of it under Pichai’s watch. And they won’t let it go.
Clearly, all the makings of a good fight are in place!