US antitrust case against Google mirrors Microsoft battle

In this news, we discuss the US antitrust case against Google mirrors Microsoft battle.

The Trump administration’s legal attack on Google actually looks like a blast from the past. The US Department of Justice filed an equally prestigious lawsuit against a tech giant in 1998, accusing it of leveraging a monopoly position to lock customers into its products so they weren’t tempted by potentially superior options from smaller competitors.

This game-changing affair, of course, was aimed at Microsoft and its computer software empire – around the same time two ambitious entrepreneurs, both Microsoft critics, were starting their own companies with a funny name: Google. Now the circle has come full circle with a lawsuit that deliberately echoes the US-Microsoft confrontation that unfolded under the administrations of President Bill Clinton and President George W. Bush.

“Back then, Google claimed Microsoft’s practices were anti-competitive, yet now Google is rolling out the same playbook to support its own monopolies,” the Department of Justice wrote in its lawsuit, filed Tuesday in Washington, DC. , in federal court. The 64-page Justice Department complaint accuses Google of thwarting competition and potential innovation through its market power and financial might. In particular, the US complaint alleges that Google sought to ensure that its search engine and advertising network remained able to reach as many people as possible while making the emergence of viable challengers nearly impossible.

US Deputy Attorney General Jeff Rosen has described Google as “the gateway to the Internet” and a search advertising giant. Google, whose parent company Alphabet Inc has a market value of just over $ 1 trillion, controls about 90% of global web searches. The Mountain View, Calif., Company has vehemently denied any wrongdoing and defended its services as a boon to consumers – a position it has said it will fiercely defend in a case that appears likely to be lead to a trial at the end of next year or in 2022.

Eleven states, all with Republican attorneys general, joined the federal government in the trial. But several other states opposed. This dynamic has raised the question of whether the timing for the government move is politically motivated, given that Election Day is less than two weeks away. President Donald Trump has also repeatedly attacked Google with unsubstantiated accusations that it is biased against conservative views in its search results and posted on its YouTube video. site.

To avoid the appearance of political animosity, Justice Department officials have come under intense pressure to present a strong case against Google. The Justice Department “brought the strongest action,” said antitrust expert Tim Wu, a professor at Columbia University Law School. But he also thinks the lawsuit is almost a carbon copy of the government’s 1998 lawsuit against Microsoft. Wu thinks the US government has a good chance of winning. “However, the likely remedies – that is, remove it, no longer make Google the default – are not particularly likely to transform the larger tech ecosystem,” he said. by e-mail.

So far, investors are betting that Google will win – or at least that its business won’t be disrupted by its struggle with the U.S. government. Alphabet stock rose more than 1% on Tuesday to close at $ 1,555.93. The Justice Department is primarily targeting Google to negotiate lucrative deals with smartphone and web browser makers to make its search engine the default option, unless consumers bother to change built-in settings . The company has also ensured that the search engine is integrated into the billions of phones powered by its Android operating system by requiring the use of the App Store accompanying the free software.

The 1990s case against Microsoft followed a similar premise. Regulators then accused the company of forcing PC makers dependent on its dominant Windows operating system to include Microsoft’s Web Explorer browser as well – just as the internet was starting to take hold. This regrouping crushed a once again popular browser, Netscape. Google argues that the Justice Department is relying on “deeply flawed” theories that have become obsolete by dramatic technological changes.

Perhaps the most significant change has been the explosion of smartphone apps that allow consumers to pick and choose which services they want to use. Google says Android phone users typically have around 50 apps on them. Google also maintains that the same offerings that make its ubiquitous search engine also benefit consumers by increasing the fortunes of its partners. For example, the company argues that its free Android software and search engine contract with Apple – estimated to be worth between $ 8 billion and $ 12 billion a year – help keep smartphone prices down.

In 2001, Microsoft seemed to have escaped the worst result. Initially, after a dramatic trial, a federal judge ruled that the company must be dismantled. But that never happened. Instead, the two sides came to a settlement in 2002 that imposed restrictions preventing Microsoft from bundling its products in such a brazen way. When the consent decree expired in 2011, the distractions caused by the antitrust case had contributed to Microsoft’s miscalculations and the apparent dulling of the company’s aggressive instincts. Microsoft ultimately proved unable to accurately assess the impact of internet search and the switch to smartphones, forcing it to play a long and ultimately unsuccessful catch-up game.

News Highlights:

  • The US Department of Justice filed an equally prestigious lawsuit against a tech giant in 1998, accusing it of leveraging a monopoly position to lock customers into its products so they weren’t tempted by potentially superior options from smaller competitors. This game-changing affair, of course, was aimed at Microsoft and its personal computer software empire – around the same time two ambitious entrepreneurs, both critics of Microsoft, were starting their own businesses with a funny name: Google.
  • US antitrust case against Google mirrors Microsoft battle
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