Google remains the number one site in Nigeria. Its dominance of the online advertising business has pitched it against U.S. states and territories.
GOOGLE.COM’s prime position as the number one site in Nigeria seems guaranteed. It has been like that for a long time. Despite the efforts of bet9ja.com, Youtube.com, Hookninjas.com,Leakblast.com, Marthook.com and Yahoo.com, Google still towers higher than all of them, with 13 daily pageviews per visitor, nine minutes, five seconds daily time on site and linkage to 2,152,655 sites.
The sites, bet9ja.com, Youtube.com, Hookninjas.com,Leakblast.com, Marthook.com and Yahoo.com, has tried to take the slot. But, the love for this site by many Nigerians has not been able to upstage Google.
Google accounts for an estimated 87 per cent of online searches worldwide. It processes trillions of queries each year, which works out to at least 5.5 billion a day, 63,000 a second.
These are, however, not the best of times for Google. On Monday, attorneys general of states in the United States announced an antitrust investigation of this firm, which Nigerians rely on for information on myriad of subjects. Many other websites, especially newspapers, rely on it for online adverts through its AdSense. The states suspect that the firm may be a threat to competition and the growth of the web.
Every state in the U.S. except Alabama and California, the home of Silicon Valley, has signed onto the bipartisan effort. Puerto Rico and the District of Columbia are also on board.
This new probe is coming more than six years after federal watchdogs concluded an antitrust investigation into its search and advertising practices. No indictment was made but major penalties were brought against the company, including breaking it up.
Google also faces two Congressional, six state and local, and eight federal investigations. Its worries are not limited to the United States. The European Union once issued $9 billion competition-related fines against it.
The latest probe is being led by Texas Attorney General Ken Paxton. According to him, Google “dominates all aspects of advertising on the Internet and searching on the Internet”. It is not clear if the investigation will be followed by a lawsuit.
For now, the probe is concerned about online advertising through which Google is expected to make over $48 billion in U.S. digital ad revenue this year. eMarketer says it has captured 75 per cent of all spending on U.S. search ads.
Speaking at a news conference alongside officials from 11 states and the District of Columbia, Paxton said: “They dominate the buyer side, the seller side, the auction side and the video side with YouTube.”
Some other complaints against Google also include its search results ranking processes, which some attorney generals argued may not fully protect users’ personal information.
But, what is wrong with being the market leader that Google is in the U.S., Nigeria and many parts of the world?
Republican attorney general of Utah Sean Reyes says: “There’s nothing wrong with being a dominant player when it’s done fairly.”
He added that there is “pervasiveness” to complaints regarding Google’s business practices.
His views are shared by Louisiana Attorney general Jeff Landry, who said: “We’re here because there’s an absolutely existential threat to our virtual marketplace.”
Arkansas attorney-general Leslie Rutledge described Google as an “online search engine juggernaut”. She alleged that searches for businesses are coloured its algorithms and advertising systems.
“I want the best advice, from the best doctors — not the doctor, not the clinic who can spend the most on advertising,” she said.
For Ashley Moody, who is the attorney general of Florida, the probe will start with the company’s vast data stores.
“Google monitors our online behaviour, and captures data on every one of us as we navigate the internet,” Moody said, adding: “This investigation will initially focus on capture of that information and whether Google embedded itself on every level of the online market (for) ad sales to monopolise this industry.”
Moody continued: “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 information? Is something really free if online ad prices go up based on one company’s control?”
D.C. attorney-general Karl Racine said he and his peers would forge ahead if Washington fails to act against Google.
“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,” Racine said.
How far can the probe go?
A tech analyst, Casey Newton in an article on verge.com, said “the Trump Administration’s antitrust inquiries have been tainted by the perception that they are intended to punish the president’s political enemies rather than level the competitive playing field”.
Newton observed that when attorneys-general “have banded together on a broad, bipartisan basis, they’ve managed to muscle major changes to other industries”.
“They forced billions of dollars in payments from Big Tobacco to pay health claims and finance antismoking campaigns in the 1990s. Two decades later, they helped reform unfair mortgage lending practices. More recently, states have led lawsuits against pharmaceutical companies they contend are responsible for the opioid crisis,” he said.
A professor at Stanford Law School, Doug Melamed, said: “If people are expecting antitrust law to break up the platforms or fundamentally change the way they do business … my bet is they’re going to be very disappointed.”
An analyst observes that only a court can decide an antitrust case. “But at the end of the day, it’s still up to a court to apply antitrust law. So if the court thinks it’s not an antitrust case, it doesn’t matter if the states have signed on,” the analyst said.
A few days ago, its video site, YouTube, was fined $170 million to settle allegations it collected children’s personal data without their parents’ consent.
The Federal Trade Commission fined Google $136 million; the additional $34 million is to New York to resolve similar allegations.
Google’s parent company, Alphabet, made a profit of $30.7 billion on revenue of $136.8 billion last year.
The tech giant has chosen to keep mum in the face of this fresh onslaught but it had, in previous statements, said it would cooperate with state officials.
BEHIND THE STORY
IN 2013, Google agreed to change some of its business practices to resolve a dispute with FTC. The agreement involved agreeing to allow competitors access to patents on critical standardised technologies.
A statement by the FTC at the time read: “The changes Google has agreed to make will ensure that consumers continue to reap the benefits of competition in the online marketplace and in the market for innovative wireless devices they enjoy. This was an incredibly thorough and careful investigation by the Commission, and the outcome is a strong and enforceable set of agreements.
“We are especially glad to see that Google will live up to its commitments to license its standard-essential patents, which will ensure that companies willing to license these patents can compete in the market for wireless devices. This decision strengthens the standard-setting process that is at the heart of innovation in today’s technology markets.”
The statement quoted a counsel to the FTC, Beth Wilkinson, as saying: “The evidence the FTC uncovered through this intensive investigation prompted us to require significant changes in Google’s business practices. However, regarding the specific allegations that the company biased its search results to hurt competition, the evidence collected to date did not justify legal action by the Commission. Undoubtedly, Google took aggressive actions to gain advantage over rival search providers. However, the FTC’s mission is to protect competition, and not individual competitors. The evidence did not demonstrate that Google’s actions in this area stifled competition in violation of U.S. law.”
The statement also noted: “The Commission’s complaint alleges that Google reneged on its FRAND commitments and pursued – or threatened to pursue – injunctions against companies that need to use MMI’s standard-essential patents in their devices and were willing to license them on FRAND terms. Specifically the company pursued injunctions in federal district court and at the United States International Trade Commission (“ITC”) to block competing technology companies from using MMI standard-essential patents.
“The FTC alleged that this type of patent hold-up is what the standard setting organizations sought to prevent by instituting FRAND licensing requirements. According to the FTC, if left unchecked, this type of patent hold-up can lead to higher prices, as companies may pay higher royalties for the use of Google’s patents because of the threat of an injunction, and then pass those higher prices on to consumers. This may cause companies in technology industries to abandon the standard-setting process and limit or forgo investment in new technologies, according to the agency.
“To remedy this concern, Google has agreed to a Consent Order that prohibits it from seeking injunctions against a willing licensee, either in federal court or at the ITC, to block the use of any standard-essential patents that the company has previously committed to license on FRAND terms.
What the law says
ANTITRUST law is a collection of federal and state government laws which regulates business corporations to promote competition for the benefit of consumers.
The main statutes in the United States are the Sherman Act of 1890, the Clayton Act of 1914 and the Federal Trade Commission Act of 1914. The Acts serve three major functions. Section 1 of the Sherman Act prohibits price-fixing and the operation of cartels. It also prohibits other collusive practices which restrain trade.
Section 7 of the Clayton Act restricts the mergers and acquisitions of organisations capable of substantially lessening competition. Section 2 of the Sherman Act prohibits the abuse of monopoly power.
These laws are enforced by the Federal Trade Commission, the U.S. Department of Justice, state governments and private parties through bringing court actions.
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