New York, San Francisco New anger for Google: In Washington on Monday, a coalition of Democratic and Republican attorney general announced that they wanted to investigate whether Google violated competition rules with its business conduct. A total of 50 Attorneys General, ie Ministers of Justice from 48 states as well as from the District of Columbia and Puerto Rico, participate in the action. Alabama and Google's home state of California are the only US states not included.
The Attorney General is about the dominance of Google in the advertising market and the handling of user data. “It's an investigation to determine the facts,” said Texas Attorney General Ken Paxton, who leads the coalition, at the Washington Supreme Court press conference. “Currently it's about advertising. But the facts point where they lead, “he said. It should be an open investigation that could include other fields as well.
“If there is no free market or no competition, it increases prices, even if something is marketed for free – and it harms consumers,” said Ashley Moody, the Florida Attorney General, a member of the Republicans.
Google kept a low profile on Monday and issued no further explanations. The company refers to a blog post on Friday, after which they will cooperate constructively with the investigators.
The online giant is thus another authority on the heels. In recent months, Google has already defended against the US Department of Justice and the Trade Supervisory Authority FTC. In addition, the politicians Google boss Sundar Pichai had invited to a hearing in Washington. He should explain his business. Especially in the current US election campaign, the topic of the dominance of “Big Tech” is highly topical.
“The time has come for the tech giants to be held accountable,” writes the public citizen movement, which campaigns for consumer protection, in a statement. “Google's anticompetitive behavior is a major threat to our democracy and the economy,” it says.
In theory, the authorities have three options for tackling the big tech companies: they can inflict billions of dollars in fines, force them to help competitors, or split them up.
But even the prosecutors can not force Google directly to one of these penalties, even if they find in their investigations. They have to go to court with their findings. Only if the competent court considers a monopoly position and a misconduct considered given, the action is admitted. Finally, the nature and extent of any penalty is decided.
According to the Director of the Antitrust Institute of the prestigious Fordham University, James Keyte, the odds are not very high. Even if a judge identifies a cartel violation and orders a punishment, it can still be overturned by another court.
Keyte also refers to Germany, where the Higher Regional Court of Dusseldorf has rejected the allegations of the Federal Cartel Office. “If this happens in a rather corporate-skeptical country like Germany, it can only happen in the US,” notes the professor.
However, observers are wondering if Google and the other companies in Silicon Valley are facing a similar fate as they once did Microsoft at the turn of the millennium. Admittedly, the antitrust lawyers ultimately lost their teeth at Microsoft. The mandated divestment of certain businesses has been overturned by an Appeals Tribunal, and the software giant has only had to open up its browsers and other software to the competition. However, the company was for years on the defensive and in public the bogey.
Daniel Ives, an analyst at Wedbush Securities, sums up the hitherto rather relaxed mood on the West Coast: The actions are more noise than the beginning of a structural change in the food chain in the tech industry. He considers the chances of smashing tech giants to be low. He reckons with minor modifications in business practices and possibly billions in fines. The top earners of the Internet elite can cope with that.
Ives remains optimistic for the FAANG shares (Facebook, Amazon. Apple. Netflix, Google) for the remainder of 2019 and 2020. Last but not least, he refers to the investigations against Microsoft in the late 90s and 2000s. The company was occupied for years with the defensive and also in public the bogeyman. But today Microsoft is again the most valuable stock exchange company in the world.
More: The coming months will be uncomfortable for US companies like Google or Ford. President Donald Trump does not like the course.
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