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Big Tech Compliance Tracker: Google Encounters Justice Department Suit; UK CMA Chief Wants Gov’t To Create Digital Regulator

Here’s the latest news from Google and the technology industry, which is coming under increasing scrutiny from regulatory watchdogs and cabinet departments.

DOJ Files Antitrust Suit Against Google

The Department of Justice is filing an antitrust suit against Google for purportedly monopolizing search and ad markets.

The department had been looking into the tech company’s practices for more than a year. Eighty percent of U.S. search queries are conducted on search channels the tech firms owns or manages per the agency, as noted in the report.

Furthermore, attorneys general from multiple states are also intending to roll out a probe into Google.

Regulator: Japan Can Investigate Business Combination Involving Fitbit

The antitrust regulator in Japan can start an investigation into any business combination or partnership involving Fitbit if their scope is sufficiently large, Fair Trade Commission (FTC) Chairman Kazuyuki Furuya recently indicated, Reuters reported.

“If the size of any merger or business tie-up is big, we can launch an anti-monopoly investigation into the buyer’s process of acquiring a start-up (like Fitbit),” Furuya said, as per Reuters.

In August, European Union (EU) antitrust watchdogs rolled out a probe into a $2.1 billion arrangement for Google to purchase Fitbit.

Attorneys Who Prosecuted Microsoft Say Google Case Is Different, Harder To Prove

Attorneys who prosecuted Microsoft for purported antitrust contraventions in the ’90s noticed some familiar procedures in Justice’s case against Google. However, multiple attorneys told CNBC that it is much different than an exact copy of the case.

Stephen Houck, who served as the top attorney for the states in the Microsoft case, said, “What they’re trying to do is fit the facts of Google into the theory of Microsoft.” However, he said that he believes the relevant facts are “very different.”

“I think they’re going to have a very difficult time proving this,” Houck said. He informed the outlet that he has consulted for Google during the last few years but his questioning of the case’s strength arises from his own view.

Google’s leading attorney referred to the complaint as “deeply flawed” in a web post noting the firm’s first objections.

UK’s CMA Chief Says He Will Take Action Against Facebook, Google If Government Doesn’t Regulate

The British competition watchdog says the government has to create an online regulator in a year at the latest or his agency will engage in action against Google and Facebook, the Financial Times reported.

Competition and Markets Authority Chief Executive Andrea Coscelli told the outlet that he was getting ready to start probes into the two internet firms in the event the government didn’t take sufficiently quick action to reduce their powers.

“Plan A is to have a regulatory framework,” Coscelli said. “If [within a year] there is little action because of Covid-19 and Brexit then we would certainly do something ourselves directly — that is plan B.”

Experts: Google DOJ Case Won’t Bring About Sweeping Change

While the Justice Department and 11 states filed a competition suit against Google, experts caution that those who anticipate a significant change in the tech space will probably not have their expectations met, Reuters reported.

“They shouldn’t see this as ‘the beginning of the end,'” Eleanor Fox, a New York University law professor, told the outlet. “It certainly wouldn’t go to the guts of what some people think is wrong with Google.”

Skeptics have contended for a long time that Google and other Big Tech firms like Facebook and Amazon have too much control and regularly take advantage of their market supremacy. Government initiatives to rein in strong tech firms has been difficult in the past.

DOJ’s Google Suit Could Impact Apple’s Services Business

The Department of Justice’s suit claiming that Alphabet runs an illicit monopoly has surfaced a possible threat to the profits of Apple, Yahoo Finance reported.

A portion of the complaint claims that Google harnesses its great spending power to provide Apple with an amount from $8 billion to $12 billion annually via a deal that mandates Apple harnesses Google’s search services as the pre-set search engine for a number of use cases.

Bank of America Global Research Analyst Wamsi Mohan indicated in a note that any modifications to the deal could bring about “headwinds” for services revenue.

Apple CEO Tim Cook established the aim of increasing the firm’s services revenue by two times by 2020 back in 2016.

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