The unbearable bigness of Google

It is almost impossible to be on the internet without using Google. It is the oxygen of the internet. It has at least one billion users for each of its internet products -- search, email, video repository, storage, operating systems for mobile phones, maps and navigation and, more recently, payments – all free for the most part, having grown from what essentially began only as a search and indexing service, albeit an extremely efficient one. More than 2.5 million searches happen every minute across the world, and people make decisions based on the results that Google throws up.

One of the tenets of Google, indeed its motto, mentioned in the prospectus of its first stock offering (IPO) is “Don’t Be Evil”. By that, the company meant that it would never betray the trust of its users. It would only show relevant search results, would never annoy users with pop-up ads and it would never sell search results. It would never monetise that trust which people who use Google place implicitly on the company.

This is a company that is worth $1.5 trillion today, among the top five in the world. And to think it was born on the stock market just 18 years ago. If the users are not paying for the services they get, how does the company earn nearly $185 billion a year in revenue? By selling ads. It is by far the world’s leading online ad selling company, generating $150 billion in ad sales. It sells the “eyeballs” of its users to advertisers and their intermediaries. The users don’t mind, since they are using Google purely out of free choice, with the confidence that their information will not be sold to advertisers, only their eyeballs.

This then is the gentle giant, mostly loved by users, and which has more goodwill than other tech giants like Amazon and Facebook. But its bigness and ubiquity are becoming bothersome. Since it pervades almost everything we do on the internet, it is in the eye of regulators. Even UPSC exam aspirants cannot do without Google. Or writers, authors, creative artists, even bureaucrats. Should Google now be regulated like a utility, just as water and electricity supply are? Since access to the internet has been raised to the level of a citizens’ right, just like other utilities, in many countries, Google search also needs to be regulated the same way access to drinking water is. It affects public welfare. It should remain non-discriminatory, and nobody should be excluded.

Apart from the utility aspect, the thing that bothers policymakers is the sheer bigness, the size of the company. It can lead to abuse of dominance, and a conduct which can thwart, if not strangle, competition. Even if the company’s motto is “Don’t Be Evil”. Is the company pursuing monopolistic practices, arm-twisting vendors, or gagging would-be competitors? Complaints have been bubbling.

Many of these come from the “abuse of dominance”, or what are called anti-trust violations, in US law. In 2018, the European Union’s competition regulator found Google guilty of using its large market share of the Android operating system by forcing phone-makers to use Chrome as the default browser and thus quashing competition from other browsers. It also forces phone-makers to bundle other Google apps, to the detriment of competitors. This was found to be in violation of the EU’s competition law and the fine was 4.34 billion euros, the highest ever imposed on Google, until then. (Technically it was on Alphabet, the parent company of Google, which was formed after a restructuring in 2015).

The company appealed against the 2018 ruling, and after four years has lost the appeal in the general court. The company can now appeal to the apex court in the EU, but chances look slim, since the appellate court has upheld the fine. Google, on its part, says that android is free, and users have the choice of phone-makers as well as service providers and can also uninstall apps if they don’t want them. Android is also open source, unlike Apple’s iOS operating system. But the court was unconvinced by Google’s defence. The court said that Apple’s business model was different since it was only selling high-end mobile devices whereas Google, by giving a free operating system, was in the business of widening its user base, and using that base to sell advertising.

As if to follow up, Google has been hauled up by India’s competition watchdog, the Competition Commission of India, and a hefty fine of Rs 2,265 crore has been imposed. The charges are almost the same that the EU has slung on Google. They are that Google has been abusing its dominant position, and the large market share (nearly 90%) of the Android operating system. It was preventing mobile handset manufacturers from installing other browsers and apps, thereby curbing competition. Interestingly, CCI’s ruling was not the result of, or in response to, any complaint by a user, vendor, advertiser or customer. It came out of a summer project done by three student interns who studied the EU case and its applicability to Indian conditions.

The other charge against Google in India is that it forces users to use only Google Pay in the Play Store rather than any other payment option. The investigation by CCI is quite in-depth, and this column cannot fully summarise all the technical details. Google plans to appeal since it feels the CCI fine and charges are unfair. In the meantime, far from these rather abstruse and technical battles, the exam aspirants, the online shoppers, the late-night video viewers are all happily using Google, indifferent to the confrontation between regulators and tech giants. It is time Google updated its motto, “Don’t Be Evil”, to something additional, like “Do The Right Thing”.

(The writer is a noted economist)
(Syndicate: The Billion Press)