With Sen. Mike LeeMichael (Mike) Shumway LeeGOP sets back Biden's vaccine mandates amid omicron On The Money — Powell, Yellen face pressure on inflation Senate Republicans clash over government shutdown strategy MORE (R-Utah), one of Google’s most vocal critics in Congress, in line to chair the influential antitrust subcommittee, and the investigation into Google’s anticompetitive practices heating up in Europe, there are new questions about whether U.S. consumers are being left behind.
Google is the king of online search, mobile, and mapping. It runs nearly 80 percent of all searches in the U.S., and its share of search advertising is even higher. Google’s Android runs 85 prercent of all smartphones shipped worldwide today, and the vast majority of smartphones, whether Android-powered or not, run Google Maps and Google’s location-based services as a default. And importantly, it controls the vast amount of consumer data that is produced by those services.
Because it is already so dominant in so many areas, it is one of the last companies in the world that should fear, or take active steps to prevent, a level playing field.
FairSearch.org has released a revealing new report that cracks the code of Google’s abuse, titled The Google Playbook. It explains how the Internet behemoth has entrenched its dominance and abused its role as de facto gatekeeper of the Internet ecosystem.
The Playbook takes a hard look at a primary source of angst among both consumers and would-be innovators: the tactics Google has used to limit consumer choice and thwart competition in three key markets: search, mobile, and maps.
Here’s how the playbook works:
Open: Google identifies a market with a valuable stream of consumer data and introduces an “:open” or “free” product to induce adoption and undermine the business model of existing market participants.
Dominate: Google achieves a dominant position based on the continued promise of openness.
Close: After gaining a dominant market share, Google closes its products, eliminates nascent competitors, and leverages its dominance to discriminate in favor of its own products.
Take, for example, the marketplace for mobile devices. Google’s Android platform has dominated the market in recent years, achieving an 85 percent worldwide market share by the end of 2014’s second quarter.
Google’s strategy was to offer a free, “open source” operating system, attracting manufacturers like Samsung by promising openness and freeing Samsung from the costs of developing a proprietary operating system.
With this “open” strategy, device manufacturers climbed on board with Android, quickly making Google the dominant force in mobile device operating systems.
But once Google achieved its dominance, things began to change and Google’s promises of “openness” and “free” took a back seat to maintaining its place as the dominant mobile operating system provider. Google began placing significant restrictions on what others could do with the supposedly “open source” operating system, requiring device makers to preference Google products and services or else be cut off from Google’s Android ecosystem of apps, and blocking potential competitors from gaining any foothold on Android devices. And the consolidation continues as Google continues to integrate its services with its Android platforms, affecting competitors’ offerings like mapping and local services. Google services are officially the default on Android devices.
And this playbook has gotten notice. Google’s restrictive Android contracts with device manufacturers, app developers, and other would-be competitors are raising alarms throughout the mobile ecosystem and beyond. The recent revelation that Google is clamping down on open-source Android phones provides some important new clues on Google’s strategy going forward.
Google began with the goal of steering its users to the best information on the Internet wherever it could be found. However, as its power grew, Google moved away from this pro-consumer model and replaced it with a pro-Google model featuring and promoting its own services, whether or not those services are the best result for the consumer. Competition was immediately affected by Google’s abuse of its dominance, like exclusive dealing, ad restrictions and content scraping. Google can shift search page layout to favor its own products. Competition is crowded out, due to these unfair tactics.
Google’s unwillingness to compete fairly thwarts innovation, limits choice, and drives up costs and prices ultimately paid by consumers. Google’s dominance is quickly becoming a choke-hold, one which starves the rest of the Internet ecosystem and leaves consumers with only the online experience that Google chooses for them. Enforcement agencies in Europe are cracking down to preserve a competitive system that yields more choices. Will American consumers settle for less?
Reilly is a former top antitrust litigator at the Federal Trade Commission and legal counsel to the Fairsearch.org coalition in the United States.