Missed the GamesBeat Summit excitement? Don't worry! Tune in now to catch all of the live and virtual sessions here.
Following the launch of investigations last year, the U.S. Department of Justice (DOJ) together with attorney generals from 11 U.S. states filed a lawsuit against Google on Tuesday alleging that the company maintains monopolies in online search and advertising, and violates laws prohibiting anticompetitive business practices.
It’s the first antitrust lawsuit federal prosecutors filed against a tech company since the Department of Justice brought charges against Microsoft in the 1990s.
“Back then, Google claimed Microsoft’s practices were anticompetitive, and yet, now, Google deploys the same playbook to sustain its own monopolies,” the complaint reads. “For the sake of American consumers, advertisers, and all companies now reliant on the internet economy, the time has come to stop Google’s anticompetitive conduct and restore competition.”
Attorneys general from no Democratic states joined the suit. State attorneys general — Democrats and Republicans alike — plan to continue on with their own investigations, signaling that more charges or backing from states might be on the way. Both the antitrust investigation completed by a congressional subcommittee earlier this month and the new DOJ lawsuit advocate breaking up tech companies as a potential solution.
Join us in San Francisco on July 11-12, where top executives will share how they have integrated and optimized AI investments for success and avoided common pitfalls.
The 64-page complaint characterizes Google as a “monopoly gatekeeper for the internet” and spells out the reasoning behind the lawsuit in detail, documenting the company’s beginning at Stanford University in the 1990s alongside deals made in the past decade with companies like Apple and Samsung to maintain Google’s dominance. Also key to Google’s power and plans for the future is access to personal data and artificial intelligence. In this story, we take a look at the myriad of ways in which artificial intelligence plays a role in the antitrust case against Google.
The best place to begin when examining the role AI plays in Google’s antitrust case is online search, which is powered by algorithms and automated web crawlers that scour webpages for information. Personalized search results made possible by the collection of personal data started in 2009, and today Google can search for images, videos, and even songs that people hum. Google dominates the $40 billion online search industry, and that dominance acts like a self-reinforcing cycle: More data leads to more training data for algorithms, defense against competition, and more effective advertising.
“General search services, search advertising, and general search text advertising require complex algorithms that are constantly learning which organic results and ads best respond to user queries; the volume, variety, and velocity of data accelerates the automated learning of search and search advertising algorithms,” the complaint reads. “The additional data from scale allows improved automated learning for algorithms to deliver more relevant results, particularly on ‘fresh’ queries (queries seeking recent information), location-based queries (queries asking about something in the searcher’s vicinity), and ‘long-tail’ queries (queries used infrequently).”
Search is now primarily conducted on mobile devices like smartphones or tablets. To build monopolies in mobile search and create scale insurmountable to competitors, the complaint states, Google turned to exclusionary agreements with smartphone sellers like Apple and Samsung as well as revenue sharing with wireless carriers. The Apple-Google symbiosis is in fact so important that losing it is referred to as “code red” at Google, according to the DOJ filing. An unnamed senior Apple employee corresponding with their counterpart at Google said it’s Apple’s vision that the two companies operate “as if one company.” Today, Google accounts for four out of five web searches in the United States and 95% of mobile searches. Last year, Google estimated that nearly half of all search traffic originated on Apple devices, while 15-20% of Apple income came from Google.
Data at scale
Exclusive agreements that put Google apps on mobile devices effectively captured hundreds of millions of users. An antitrust report referenced these data advantages, stating that “Google’s anticompetitive conduct effectively eliminates rivals’ ability to build the scale necessary to compete.”
In addition to the DOJ report, the antitrust report Congress released earlier this month frequently cites the network effect achieved by Big Tech companies as a significant barrier to entry for smaller businesses or startups. The incumbents have access to large data sets that give them a big advantage, “especially when combined with machine learning and AI,” the report reads. “Companies with superior access to data can use that data to better target users or improve product quality, drawing more users and, in turn, generating more data — an advantageous feedback loop.”
Network effects often come up in the congressional report in reference to mobile operating systems, public cloud providers, and AI assistants like Alexa and Google Assistant, which improve their machine learning models through the collection of data like voice recordings.
One potential solution the congressional investigation suggested is better data portability to help small businesses compete with tech giants.
One part of maintaining Google’s search monopoly, according to the congressional report, is control of emerging search access points. While Google searches began on desktop computers, mobile is king today, and fast emerging are devices like smartwatches, smart speakers, and IoT devices with AI assistants like Alexa, Google Assistant, and Siri. Virtual assistants are using AI to turn speech into text and predict a user’s intent, becoming a new battleground. An internal Google document declared voice “will become the future of search.”
The growth of searches via Amazon Echo devices is why a Morgan Stanley analyst previously suggested Google give everyone in the country a free speaker. In the end, he concluded, it would be cheaper for Google to give away hundreds of millions of speakers than to lose its edge to Amazon.
The scale afforded by Android and native Google apps also appears to be a key part of Google Assistant’s ability to understand or translate dozens of languages and collect voice data across the globe.
Search is primarily done on mobile devices today. That’s what drives the symbiotic relationship between Apple and Google, where Apple receives 20% of its total revenue from Google in exchange for making Google the de facto search engine on iOS phones, which still make up about 60% of the U.S. smartphone market.
The DOJ suit states that Google is concentrating on Google Nest IoT devices and smart speakers because internet searches will increasingly take place using voice orders. The company wants to control the next popular environment for search queries, the DOJ says, whether it be wearable devices like smartwatches or activity monitors from Fitbit, which Google announced plans to acquire roughly one year ago.
“Google recognizes that its ‘hardware products also have HUGE defensive value in virtual assistant space AND combatting query erosion in core Search business.’ Looking ahead to the future of search, Google sees that ‘Alexa and others may increasingly be a substitute for Search and browsers with additional sophistication and push into screen devices,'” the DOJ report reads. “Google has also harmed competition by raising rivals’ costs and foreclosing them from effective distribution channels, such as distribution through voice assistant providers, preventing them from meaningfully challenging Google’s monopoly in general search services.”
In other words, only Google Assistant can get microphone access for a smartphone to respond to a wake word like “Hey, Google,” a tactic the complaint says handicaps rivals.
AI like Google Assistant also features prominently in the antitrust report a Democrat-led antitrust subcommittee in Congress released, which refers to AI assistants as efforts to “lock consumers into information ecosystems.” The easiest way to spot this lock-in is when you consider the fact that Google prioritizes YouTube, Apple wants you to use Apple Music, and Amazon wants users to subscribe to Amazon Prime Music.
The congressional report also documents the recent history of Big Tech companies acquiring startups. It alleges that in order to avoid competition from up-and-coming rivals, companies like Google have bought up startups in emerging fields like artificial intelligence and augmented reality.
If you expect a quick ruling by the DC Circuit Court in the antitrust lawsuit against Google, you’ll be disappointed — that doesn’t seem at all likely. Taking the 1970s case against IBM and the Microsoft suit in the 1990s as a guide, antitrust cases tend to take years. In fact, it’s not outside the realm of possibility that this case could still be happening the next time voters pick a president in 2024.
What does seem clear from language used in both US v Google and the congressional antitrust report is that both Democrats and Republicans are willing to consider separating company divisions in order to maintain competitive markets and a healthy digital economy. What’s also clear is that both the Justice Department and antitrust lawmakers in Congress see action as necessary based in part on how Google treats personal data and artificial intelligence.
VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Discover our Briefings.