North Carolina is among 50 U.S. states and territories to open an Google’s “potential monopolistic behavior,” it was announced on Monday.
It comes on the heels of a similar probe launched last week into Facebook’s market dominance, which the Old North State has also joined.
The two probes widen the antitrust scrutiny of big tech companies beyond sweeping federal and congressional investigations and enforcement action by European regulators.
“Internet is the critical infrastructure of the 21st century. It’s where we communicate, work, learn, get entertainment — it’s where it all happens. But I’m increasingly concerned about the way the internet has come to be dominated by a few major tech companies,” the state’s attorney general Josh Stein said in a statement.
“When companies in any industry get too powerful and too big, they can use their power and size to harm people and damage markets. Antitrust laws help is ensure that people get the best services and prices, and their privacy is respected, and that they benefit from competition that fosters the next generation of technology.
“I joined in this bipartisan investigation to take a look at this massive company to make sure that it is not engaged in business practices that hurt consumers and stifle competitors.”
Nebraska attorney general Doug Peterson, a Republican, said at a press conference held in Washington that 50 attorneys general joining together sends a “strong message to Google.”
California and Alabama are not part of the investigation, although it does include the District of Columbia and Puerto Rico. Tara Gallegos, a spokeswoman for California Attorney General Xavier Becerra, declined to confirm or deny any state investigation and would not comment on the announcement by the other states.
Mike Lewis, a spokesman for Alabama Attorney General Steve Marshall, also said the state’s legal team had no comment on the probe.
The news conference featured a dozen Republican attorneys general plus the Democratic attorney general of Washington, D.C.
Google’s parent company, Alphabet, has a market value of more than $820 billion and controls so many facets of the internet that it’s fairly impossible to surf the web for long without running into at least one of its services. Google’s dominance in online search and advertising enables it to target millions of consumers for their personal data.
Google expects the state authorities will ask the company about past similar investigations in the U.S. and internationally, senior vice president of global affairs Kent Walker wrote in a blog post Friday.
Critics often point to Google’s 2007 acquisition of online advertising company DoubleClick as pivotal to its advertising dominance.
Europe’s antitrust regulators slapped Google with a $1.7 billion fine in March for unfairly inserting exclusivity clauses into contracts with advertisers, disadvantaging rivals in the online ad business.
One outcome antitrust regulators might explore is forcing Google to spin off search as a separate company, experts say. Regulators also could focus on areas such as Google’s popular video site YouTube, an acquisition Google scored in 2006.
Joining Paxton, a Republican, in the investigation are the attorneys general of almost all U.S. states and the District of Columbia.
Google has long argued that although its businesses are large, they are useful and beneficial to consumers.
“Google is one of America’s top spenders on research and development, making investments that spur innovation,” Walker wrote. “Things that were science fiction a few years ago are now free for everyone — translating any language instantaneously, learning about objects by pointing your phone, getting an answer to pretty much any question you might have.”
But federal and state regulators and policymakers are growing more concerned not just with the company’s impact on ordinary internet users, but also on smaller companies striving to compete in Google’s markets.
“On the one hand, you could just say, ‘well Google is dominant because they’re good,'” said Jen King, the director of privacy at Stanford’s Center for Internet and Society. “But at the same time, it’s created an ecosystem where people’s whole internet experience is mediated through Google’s home page and Google’s other products.”
Experts believe the probe could focus on at least one of three areas that have caught regulators’ eyes.
A good first place to look might be online advertising. Google will control 31.1% of global digital ad dollars in 2019, according to eMarketer estimates, crushing a distant second-place Facebook. And many smaller advertisers have argued that Google has such a stranglehold on the market that it becomes a system of whatever Google says, goes — because the alternative could be not reaching customers.
“There’s definitely concern on the part of the advertisers themselves that Google wields way too much power in setting rates and favoring their own services over others,” King said.
Another visibly huge piece of Google’s business is its search platform, often the starting point for millions of people when they go online. Google dwarfs other search competitors and has faced harsh criticism in the past for favoring its own products over competitors at the top of search results. European regulators also have investigated in this area, ultimately fining Google for promoting its own shopping service. Google is appealing the fine.
Google’s smartphone operating system, Android, is the most widely used in the world.
European regulators have fined Google $5 billion for tactics involving Android, finding that Google forced smartphone makers to install Google apps, thereby expanding its reach. Google has since allowed more options for alternative browser and search apps to European Android phones.
The U.S. Justice Department opened a sweeping investigation of big tech companies this summer, looking at whether their online platforms have hurt competition, suppressed innovation or otherwise harmed consumers. The Federal Trade Commission has been conducting its own competition probe of Big Tech, as has the House Judiciary subcommittee on antitrust.
North Carolina joins antitrust probe of Facebook; state AGs team up for investigations
