Chris Keall: Google is not as big as you think

OPINION

I don’t want to carry water for Google.

The search giant has an imperfect record in a number of areas such as removing harmful content, protecting copyright, protecting personal privacy, blurring the lines between paid and organic search results, and adhering to name-suppression orders – and it’s been lucky that NZ politicians and regulators have handled it with kid gloves.

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But I also wonder if it’s quite as dominant as the US Department of Justice thinks.

In its lawsuit filed this week, the DOJ says “in recent years, Google has accounted for 90 per cent of all general search engine queries in the United States, and almost 95 per cent of queries on mobile devices.”

In surprisingly casual and rollicking language, its District Court of Columbia filing says: “Two decades ago, Google became the darling of Silicon Valley as a scrappy startup with an innovative way to search the emerging internet. That Google is long gone. The
Google of today is a monopoly gatekeeper for the internet.”

The 90 per cent figure is broadly in keepng with most takes for searches carried out on a web browser on a PC.

But when I’m looking for a plumber or an electrician these days, or a recommendation for the best product to clean my paving stones, I don’t don’t fire up Google, or even open my web browser – I tap into my local community’s Facebook group.

And when you’re looking for somewhere to stay this summer, you’ll probably open AirBnb. To find the nearest car, bike or e-scooter, you’ll open Uber’s app.

If you want to know the weather, you ask Alexa or Siri. When you’re looking for something to buy, you load Amazon or Trade Me.

You get the picture.

There are more and more ways to find information these days – many of them involving social media or apps – and Google is gatekeeper of fewer and fewer of them in recent years, not more and more.

Like former DOJ anti-trust targets IBM (from the days when mainframes ruled the world) and Microsoft (in the pre-smartphone 1990s), the world is already shifting under its feet.

The search giant suffered its first revenue decline this year. You could blame Covid but Facebook, which also relies almost exclusively on ad revenue, continued to make big gains.

The DOJ’s 63-page filing brushes off social media in a two-sentence reference, saying they “do not offer consumers the same breadth of information or convenience”.

Rather, it boosts its case by boosting Google, saying the company (formally now part of holding company Alphabet), “has become one of the wealthiest companies on the planet, with a market value of $1 trillion and annual revenue exceeding $160 billion. For many years, Google has used anticompetitive tactics to maintain and extend its monopolies in the markets for general search services, search advertising and general search text advertising – the cornerstones of its empire. “

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The DOJ argues Google has parlayed its dominance of desktop search to dominate mobile, through multi-billion-dollar deals to become Apple’s exclusive search engine for iPhone, and offering its Android operating system free to other phone makers – then using revenue-sharing agreements to lock them in.

The Android situation is interesting. The operating system is free and open source – meaning the likes of Samsung, Sony, LG and (excluding times of sanctions) Huawei can grab it, and customise it with some extra frills for their handsets.

These customised takes on Android are called “forks” – but the DOJ says Google has “anti-forking” agreements in place that keep a lid on customisation, keeping it in overall control of mobile advertising, and maintaining its app store’s dominant position.

It's the distraction that kills you

It’s not yet clear where the DOJ want to go. The EU has levied multi-billiion Euro fines on Google, which have been like so much water off a duck’s back. It could be that the DOJ demands Google spin-off its Android operation – which would be an idea with some merit.

For its part, Google might run a full-force defence, but it might also want to review the DOJ’s protracted assaults on IBM (ultimately withdrawn) in the 1970s and Microsoft in the 1990s and early 2000s (which initially yielded a break-up verdict that was overturned on appeal).

Although IBM and Microsoft were ultimately successful, both cases proved a huge distraction. In IBM’s case, it contributed towards a young Bill Gates eating its lunch. In Microsoft’s, it took its eye of the ball in term of the internet and mobile – or, at least for an extended period, it was fighting with one hand behind its back as the DOJ scrutinised its every move.

With that in mind, Google might want to cut a quick deal.

For now, it’s returning fire. In a public post, its primary arguments are that there is nothing forcing people to use Google; there is nothing to stop Microsoft outbidding it to have its Bing installed as the default search engine for iPhone.

It also notes that Bing is installed as the default search engine on hundreds of millions of new Windows PCs every year.

And, at least in the context of rebutting an anti-trust case, Google is quite happy to boost apps as an alternative source of information, saying that Americans downloaded 204 billion apps last year.

“People don’t use Google because they have to, they use it because they choose to. This isn’t the dial-up 1990s, when changing services was slow and difficult, and often required you to buy and install software with a CD-ROM,” Google VP of global affairs Kent Walker says in a public post.

And one Google ally told me that the DOJ’s lawsuit will drive people towards inferior search engines.

I’m not sure about that one. Bing is often dreadful, at least for Kiwi users, but various others – such as DuckDuckGo with its privacy focus, and Ecosia with its philosophy of donating 80 per cent of profits to saving the planet – have definite elements of appeal.

In any case, going by the IBM and Microsoft actions of yesterday, it will be a good five years before we learn if Google suffers any break-up – with the proviso that there could be a wholesale change in DOJ leadership after November 3.

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