"WE DON'T search anymore; we Google," says Dr. Bockett, a Yonsei University professor. A search engine that began as an algorithm has become so prevalent that its name is used as a verb synonymous with searching the web. However, Google's dominance never stopped at search engines; today, Google has significant market power in various technology industry markets through its services. In fact, Google's pervasiveness in digital culture has made it easy to overlook that Google is a multinational company that possesses dominance and power.

Understanding the size of Google

   Founded by Larry Page and Sergey Brin in 1998, Google started as a search engine based on an innovative algorithm that connects pages based on the number of other pages that link to the original site. As an effective search engine, Google later entered the advertising market through its Google AdWords program (now called Google Ads). The revenue from selling advertisements would become one of the major driving forces behind its immense value. Google continued to expand its services—launching Gmail in 2004 and Google Maps and Google Earth in 2005—and entered several markets, including the mobile operating system market by acquiring Android in 2005 and the video-sharing market by acquiring YouTube in 2006. As of 2020, Google provides over 200 products, now offering services from cloud storage, language translation, and hardware development; it also aims to become an internet carrier through Google Fiber*.

   Therefore, it is not surprising that Google is one of the most valuable companies in the world. Alphabet, Google's parent company, which formed from restructuring Google in 2015, currently has a market capitalization of $1.176 trillion (approximately ₩1.3 quadrillion)**. Moreover, starting with its search engine, Google dominates various markets it competes in; Google searches account for over 92% of the global search engine market and over 96% and 98% in Brazil and India, respectively. Android currently takes over approximately 73% of the global mobile operating system market, while Google Chrome accounts for over 66% of the browser market worldwide***. Hence, Google has earned its status as a monopoly in various markets—which is not illegal—but now it's a matter of how Google has been, and is, making use of its power.

The Google Lawsuit

   For a long time, Google has faced various antitrust complaints. In 2017, the European Union (EU) fined Google ($2.7 billion) for favoring itself in shopping service results over retailers who paid to be promoted; the EU followed with another $5 billion fine against Google in 2018 for favoring its apps in app store platforms****.

   However, Google now faces a major lawsuit in its home country for the first time against one of its first services: advertisement. On October 20, 11 states of the United States filed a complaint against Google in what has been labeled as potentially "the most important competition case against a technology company" since the United States' Department of Justice's (DOJ) 1998 antitrust lawsuit against Microsoft*****. Similar to previous lawsuits, the DOJ is accusing Google of attempting to maintain its monopoly in the markets of "general search services, search advertising, and general search text advertising" through "anticompetitive and exclusionary practices******." Unlike previous lawsuits, however, this year's complaint does not seek monetary compensation, an indication that the federal government is seeking behavioral and possibly drastic changes in the company.

   According to the DOJ, the billions that Google pays to device-makers to establish its search engine as the default on devices has helped make Google "a gatekeeper to the internet." The DOJ's complaint estimates that Google pays $8 to 12 billion to Apple to make Google the default search engine for the latter's voice assistant Siri and browser Safari. Google's search engine is already dominant in itself, but why pay more? In an internal Android strategy document from 2018, even Google claimed, "People are much less likely to change [the] default search engine on Mobile*******.” Despite the facility of changing the default search engine—just how Kent Walker, the Senior Vice President of Global Affairs at Google, details in a blog post in response to the lawsuit—Google has always targeted the reality of consumer behavior.

   Google has also taken over what the DOJ defines as "search access points," the points through which users can connect to search services. These include various technological outlets, from within devices—such as the search bar in Android phone homepages—to the emerging Internet of Things (IoT) technologies like home appliances and smart assistants. Given the public's familiarity with Google, integrating the search engine in new technologies is convenient and "innovative." The question now is, are Google's monopolistic acts limiting innovation that "could have been"?

More and more

   Although the United States' lawsuit against Google is preceded by others, it is also being accompanied by even more lawsuits. In fact, the United States' case directly coincides with antitrust backlash against another of Google's services: Google Play Store—one of the primary sources of app downloads in Android devices. Google Play Store has always maintained a policy of collecting 30% of the revenue generated from in-app transactions. Then, on Sept. 28, 2020, Google announced that it would no longer allow apps to use other payment methods and stated that companies have until September 2021 to integrate the Play Store's payment method. In the United States, apps that have used their billing systems include Netflix and Spotify and are not numerous. However, in countries like South Korea and India, a large percentage of apps use their own methods********.

   India has protested and accused Google of abusing its power to block developers, especially local startups, from taking over their demographic. In an interview with Asian Nikkei, Vishal Gondal, founder of the health monitoring app GOQii, has gone as far as comparing Google's actions to those of Britain when it imposed a salt tax in colonial India. "This is about this entire East India Company-like structure, which is trying to oppress us," he says.

   As victims of Google's new policies, over 120 Indian startups have teamed up to resist Google's influence in their country. Paytm, an Indian financial technology company, even created a "Mini App Store" that now serves as an alternative platform for developers. Unlike Google, Paytm has incorporated various billing systems and has provided a free payment avenue. In response to the backlash, Google extended the implementation period of the policy to 2022 in India. Nevertheless, intending to divert Google's Indian customers, Paytm has set an objective of bringing in 1 million apps by 2021 before "Google brings any charging obligation to Indian developers*********."

More and more: Korea

   Similar complaints to those of India have followed in South Korea. In October 2020, the Korean Fair-Trade Commission (KFTC), an antitrust watchdog led by Joh Sung-wook, launched an antitrust probe against Google. During a parliamentary audit at the National Assembly, Joh claimed that "the main reason behind Google's decision to take 30% in commission is the lack of competition in this market."

   The accusations by the KFTC follow a year-long ongoing investigation against Google, which has loomed over contracts between the company and online retailers to identify the type of consumer data that the tech giants are collecting during transactions. A look into Google in the Korean app market is vital, given that the company dominates the Korean app market. According to Yonhap News, the Google Play Store accounted for 63.4% of app store sales in Korea in 2019. The proportion has been exceeded this year so far; the Play Store recorded ₩2.07 trillion in sales during the first nine months of 2020, a statistic that represents 80% of Korea's app market**********.

   The KFTC's scrutiny into Google's activities in the domestic market brought to light even more allegations. During the National Assembly's audit of the Ministry of Science and ICT, Yoon Young-chan, a representative of the Democratic Party, uncovered that Google was colluding with mobile manufacturers to prevent the latter from accepting pre-installation of rival apps in smartphones***********. Another longstanding conflict with Google in Korea is the company's attempts at avoiding corporate taxes. South Korean tax authorities have been investigating Google since 2018. According to The Korean Times, Naver—the most extensive domestic search engine—paid over ₩400 billion, or 10% of its annual revenue, in corporate taxes, while Google only paid ₩20 billion. As a multinational company, Google has avoided domestic taxes behind the pretense that their headquarters are located in the United States. This action has been labeled as base erosion and profit shifting (BEPS)************. Nonetheless, Google's arguments fell short, as the company was pushed into paying ₩600 billion to the Korean government in corporate taxes this year. Google Korea subsequently filed a complaint against Korea's National Tax Service (NTS), but with its new 30% commission policy, Google will likely face even more taxation on the revenue generated from its app store*************.

Regulating Big Tech

For a long time, big technology companies worldwide have been supported for bringing about advancement in their respective countries. Technology columnist Tim Bajarin, in a Forbes article, referred to the tech companies' relationship in the United States as "Silicon Valley's love affair with the US government," one that grew in World War II as the government sought technology that would aid them during the war. Not only did tech companies receive large sums of money from the Department of Defense, but they also received constant support from the government through lenient policies and regulations. Similarly, Korea has leaned on research and development as well as science and technology to build its current digital infrastructure; government expenditure in research and development grew almost 72-fold within 40 years from 1965 to 2005**************.

   However, since the late 1990s, technology companies have been put in a negative light due to the increasing stakes of data collection, data management, censorship, and regulation. The question is, do we need different ways of approaching antitrust probes when it comes to technology? In an interview with The Yonsei Annals, Professor Daryl Bockett, a Yonsei University professor of international studies in UIC, explained that one of the challenges of regulating a technology company is the fact that there is limited knowledge of what goes on in the cyberspace. "The question of what [tech companies] are doing is a black box. [Governments] want to know what the companies are doing to understand how to make them do better."

   In an interview with BNN Bloomberg, Sally Hubbard, director of enforcement strategy at Open Markets Institute and former assistant attorney general at the New York Antitrust Bureau, addressed yet another concern: the fact that Google provides monetarily free services. As users regularly access these free services without much thought, they actually give away their information. "We need to quantify the value of data," Hubbard emphasized. Customers do not know how much they are giving away and are often unaware that they have a choice and control over their information.

   Dr. Bockett further added that cyber products have advantages that physical ones do not. For example, he highlights that Google and other digital platforms define the internet because they are so widespread. "These products are hardwired into our society. Antitrust is tough when barriers of entry are hardwired into it," he added.

Prospects

   The DOJ's Google lawsuit may be crucial in defining the future of technology companies, especially those that operate in the digital world. Not only is the lawsuit aiming to ground one of the largest and most valuable companies, but it is also bringing along a wave of complaints from abroad. Most important, however, is the fact that this lawsuit is aiming at the heart of the company: its structure and operation. So, as previously mentioned, it is likely that the case will bring about behavioral changes both within the company and in the market.

   In the United States, this year's complaint has been compared to the Microsoft lawsuit. In an interview with CNBC, Timothy Wu, a Columbia University law professor, claims that the DOJ chose to mimic a case that not only dealt with similar accusations but was also successful. "It's basically that [Google] ... put concrete over any possible way to challenge them. That's their lawsuit, which is exactly what Microsoft did," he said. However, in another interview with CNBC, former United States Chief Technology Officer Aneesh Chopra emphasizes how digital technology dynamics have evolved—and continue to do so. "The definition of the market itself is evolving," he said, alluding to the fact that technology cannot be approached in the same way as in the past.

   Another aspect to consider is that, unlike Microsoft, Google is not "purposefully" blocking out competitors. Microsoft, on the other hand, directly tried to outcompete its rival, Netscape Navigator, by blocking it from access points and forcing users to adhere to its programs***************. Conversely, Google's customers, like Apple, choose to pre-install Google as the default search engine because the action benefits both companies. Accordingly, in yet another interview with CNBC, Stephen Houck, a former New York state antitrust bureau chief, claimed that this lawsuit's arguments are "weak" because it targets something that isn't explicitly harming other companies. Google has also established itself as a go-to, so it is vital that the lawsuit does not "break the product" nor stop it from improving. The DOJ lawsuit will most likely seek remedies that will make sure that competition can exist.

   The United States' complaint will be a pending topic for the next years, but domestic action in Korea is closing in on deals. In response to the KFTC complaint against Google's Play Store policy, Google Korea has agreed to carry out a forum that would promote a "sustainable app ecosystem." According to Chosun Biz, the forum will be held every other month and listen to developers, experts, and others who interact in the app-developing platforms to promote communication. The forum was proposed following Korea's efforts in regulating an otherwise globally unregulated multinational; solo action by South Korea could spill negative side-effects to its developers, which is why Korea is pursuing public hearings first.

   Regarding multinational companies' evasion of domestic taxes, the OECD is also developing a "Google Tax" that would establish a standard for taxing multinational companies that are increasing economic activity in foreign countries and prevent them from taking advantage of loopholes and BEPS. "International finance is what is allowing companies to do what they wish with their profits abroad. Nobody likes paying taxes, and nobody likes to invest in companies that pay taxes," Dr. Bockett added, highlighting the importance of addressing the global economic infrastructure. Although the Google Tax deals and standards are expected to be finalized and standardized by 2021, South Korea has expressed concern, for these requirements are also shifting to consumer goods, which would impose heavier taxes on companies like Samsung, LG, and Hyundai Motors.

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   As the holder of a large percentage of market share, Google has significant power spilling over from the digital world into the material world. The lawsuits have shown how Google's dominance extends beyond its operations and its product, so the results of the Google lawsuits are similarly expected to define the direction of technology industries and multinationals as a whole.

*CNN

**Yahoo Finance

***Statcounter

****CNN

*****EFF

******United States DOJ

*******United States DOJ

********Android Developers Blog

*********India Times

**********Pulse News

***********Korea Bizwire

************“Base erosion and profit shifting” is defined as when “multinational enterprises exploit gaps and mismatches between different countries' tax systems” by the OECD.

*************Yonhap News

**************Issues

***************The Guardian