In April 2023, Google's communications team discussed the importance of AI technologies in the form of new human-like chatbots in the New York Times, highlighting not only true innovation, but also the potential threat these technologies serve the search giant's business model.
The main points of their discussion were, first, that the new technology is very cool, and second, that Google is no longer a monopoly and that the U.S. government should abandon its antitrust actions against the search giant.
This is an extremely important statement in the debate on the future. This article explains why Google made these claims and why they are important.
Google's "outdated" in the field of "artificial intelligence"
AI is a widely used technique that runs a large number of data sources through algorithms to train powerful recognition model software. The theory behind AI has been around since the late 50s of the 20th century, but only recently have computing power and methods improved to be deployed on a large scale. Unlike crypto or autonomous driving, AI/machine learning looks like a truly general-purpose technology. Today, large-scale language learning model algorithms support scientific research such as computer-aided language generation, image generation, design, programming, and protein folding.
Google's AI is a bit behind, at least when it comes to deployment. Most of Google's AI technology was invented by DeepMind, which it acquired in 2014. Although Google provides DeepMind with a lot of computing resources, in addition, Google's attitude towards AI is basically "sitting on its laurels and not moving forward", it only uses artificial intelligence to adjust its search queries, back-end infrastructure and targeted advertising system. Google deployed AI to maintain its monopoly cash flow from advertising revenue. Anything outside of this field is simply considered an interesting scientific experiment. In fact, many of the people who now lead AI have worked at Google and left because of this situation.
Still, many companies, like Google, have been running less powerful forms of machine learning behind the scenes for years. But at the end of 2022, OpenAI released an AI chatbot technology called ChatGPT and quickly attracted at least 100 million users. This consumer-facing product is so attractive that Microsoft has incorporated the technology into its Bing search engine, as are Google's other potential competitors such as Neeva and DuckDuckGo. Google had this technology a few years ago, but it didn't invest in it.
Google faces an antitrust case
The recent U.S. government's antitrust case against Google is based on the government's claim that Google has been restricting the development and deployment of new technologies. In 2020, antitrust regulators during the Trump administration accused Google of maintaining a monopoly, saying that 90-95% of the company's search market share was not acquired by superior intelligence, but was the result of illegal commercial methods. Google has excluded competitors from the search market through contractual arrangements with partners and its ownership of the mobile operating system Android.
Google pays $45 billion a year for contracts that keep competitors out, with "Apple, LG, Motorola, and Samsung; Major U.S. wireless carriers such as AT&T, T-Mobile and Verizon; and browser developers like Mozilla, Opera, and UCWeb — to ensure the default state of their universal search engines and, in many cases, explicitly prohibit Google's counterparties from dealing with Google's competitors. ”
In DOJ's search market timeline, you can see a search monopoly that lasted for more than a decade. Importantly, this decade was the time when Google acquired Android and monopolized new mobile search technologies. Between 2010 and 2012, U.S. regulators conducted investigations and determined that the new mobile ecosystem would consist of a handful of companies, namely Google and Facebook, but did not prosecute.
Image: Search Engine Timeline (Source: U.S. Department of Justice official website)
So how does Google maintain its monopoly?
Google bought Android, the operating system for most phones around the world, made its search engine the default and then collected search data from those users, which it could use to tweak its own products while preventing competitors from improving theirs. This is similar to Microsoft's practice in the 1990s by bundling Internet Explorer with its operating system and paying distributors such as Internet service providers (AOL, Yahoo, etc.) to block its browser competitor, Netscape. In short, Google bought all the "shelf space."
This is just one of several antitrust cases that Google faces. These cases are clearly Google's top priority. Google CEO Sundar Pichai has been sanctioned by a court for destroying documents related to his conversations in the monopoly case. Such behaviour is not only malicious, but also a manifestation of deep concern. The Google CEO is clearly thinking seriously about the legal environment, because he knows that how AI evolves is as much a scientific issue as it is a legal one.
Information supplement
There are currently two main antitrust cases against Google in the United States: one filed in 2020 by attorneys general and departments of justice from eleven states, and one filed earlier in 2023 on behalf of eight different states' departments of justice and attorney general.
The lawsuit, filed in 2020, alleges that the company's dealings with customers like Apple preloading its search engine on devices and browsers violated federal antitrust laws.
In the 2023 lawsuit, the U.S. Department of Justice (DOJ) accused Google of stifling AI innovation by monopolizing the search market through exclusive deals, claiming that if Google hadn't monopolized the search market, ChatGPT and other technological innovations might have been released years ago.
The antitrust lawsuit "Google restricts the development and deployment of new technologies" was initiated by the U.S. Department of Justice and is being heard by District Court Judge Amit Mehta of the District of Columbia. Judge Mehta, a standard corporate liberal who generally respects the power of companies, will decide whether to drop or narrow the scope of the case, or let it go to trial. In the testimony at trial, something like this emerged: the potential competitive threat of new technologies such as ChatGPT, as well as exclusive contracts with Google with distributors such as Samsung.
A few days after the trial, Google's PR campaign further clarified its position at the trial: Google CEO Pichai spent more than 60 minutes talking about how artificial intelligence will disrupt everything; Then, the New York Times reported that Google's monopoly was threatened, that is, Samsung originally signed a $3 billion contract with Google to set Google as the default search engine for its phones, but is currently considering setting Microsoft's artificial intelligence search engine Bing as the default search engine.
Google is trying to maintain its monopoly position with "artificial intelligence to create competition."
Bing, Neeva, and DuckDuckGo all have different ways to integrate AI and search engines, but most of them are not "recommended" for users because Google search is the default. Unless Judge Mehta decisively rules that these monopolistic business methods are invalid, Google will set the default as it rolls out its own AI program. In the worst-case scenario, Google will control the AI-enabled network.
But if Judge Mehta forces the removal of Google's default settings and the $45 billion Google pays phone makers each year, DuckDuckGo and Neeva could compete. Therefore, such a decision may trigger an explosion of innovation in artificial intelligence search.
Although so far there isn't much evidence that AI is impacting the search ad market share, Google has maintained a monopoly for more than a decade by restricting others anyway, and even if the "business conspiracy" starts to fail, the monopoly is illegal. Samsung may be using the opportunity to bargain more aggressively over its contractual arrangements with Google. Microsoft has the potential to get Samsung's default position at a higher price than Google.
Fundamentally, "AI creates competition" is a great topic for both Microsoft and Google, which wants to have a place in search and Google wants to convey the message that it is not a monopolist. But this is not the case. What we do know is that Google has been limiting competitors' deployment in search, as well as new technologies like artificial intelligence that it controls internally but hasn't rolled out. The wording of the Sherman Act is very clear, and Google's "monopolistic" behavior meets the requirements.
At the last technological inflection point, the shift from desktops to mobile devices, enforcers set rules that promoted monopolies and allowed Google, Facebook, and Apple to dominate our phones. In 2012, the U.S. Federal Trade Commission (FTC) voted unanimously to close its investigation into Google and then allowed Facebook to acquire Instagram. However, it was a different political moment.
Now, as Sarah Myers West's Op-ed in the Financial Times illustrates, the integration of big tech/AI fields has begun a real conversation. The revitalized antitrust department launched an antitrust lawsuit against Google. Regardless of what Judge Mehta decides, the case is sure to be appealed.
BY MATT STOLLER, RESEARCH DIRECTOR OF THE AMERICAN ECONOMIC FREEDOM PROGRAM
Compiled: Internet Law Review
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