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Why Does The US Govt Want to Destroy Google?!

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    jonlarue43511

      “We are in a pickle, all our work is in a catch-22 situation.” This was the sentiment expressed by the founders of Google, Larry Page and Sergey Brin, and the company’s famous CEO, Eric Schmidt, when they realized the devastating blow dealt to them by Microsoft in 2006. At that time, Microsoft, the owner of the most widely used operating system on computers, “Windows,” had just emerged from a fierce legal battle it fought against the US government from 1998 to 2001. Yes, as you heard, a war against the government of the same country as the company’s headquarters. For those who may not know, America has a famous law called the Antitrust Law. Its purpose is to prevent any company from growing excessively to the point where it becomes a monopoly that controls the market, leaving no room for any competitor to take part in. In the late 1990s, Microsoft was on its way to achieving that. The tactics it used to destroy its competitors, along with the ecosystem created by Bill Gates, were very concerning to the Americans. The breaking point for the government was Microsoft’s attempts to undermine Netscape, the most popular web browser at the time. As a result, the Department of Justice filed a lawsuit in 1998 with the aim of breaking up the company. Eventually, the ruling sided with the government, but Microsoft appealed and won the appeal. The case was then settled in 2001 through an agreement with the government. The narrative that is often promoted is that the outcome was a victory for Microsoft and for a free market against the US government. However, that is not the whole truth.There is an important aspect that some people tend to overlook, which is that Microsoft, after the trial, was not the same as it was before.

      The trial had a real impact on Microsoft and reduced its dominance in the market because it essentially caused it to be fragmented. This, in turn, allowed other companies like Apple and Google, which were emerging at that time, to rise. Microsoft however barked up the wrong tree, and in 2006, it gave Google a cold shoulder by making Bing its default search engine on its Internet Explorer browser. Now why was that a destructive move for Google? Well, at that time, Internet Explorer, which is uncredited nowadays and is no longer noticed, was the primary browser on most PCs. A step like this means that Google’s search engine would have a snowball’s chance in hell, and it will eventually perish. At that time, there was a very intelligent young Indian engineer who had just joined Google. He made it into a nutshell, considering that, as computers consist of two parts: software, which is dominated by Microsoft that is blocking the way for other companies, and hardware. Putting Microsoft away, he thought that they ought to jump forward to the hardware manufacturers themselves, and make them add the Google Toolbar to their versions, which includes our search engine, directly through what is called pre-installed software. And because this young man was a brilliant visionary, he was able to convince Google officials to invest further in developing their own browser to compete with Internet Explorer, and maybe later on, they could challenge and rival it.

      Indeed, Google implemented these brilliant suggestions, and devices started having the Google search engine despite Microsoft’s objection. And not only that, two years later, specifically in 2008, the first version of Google Chrome was launched. The rest is history, and the overwhelming success of Google and its products are well-known until this moment. The intelligent engineer’s name is Sundar Pichai. As time passed, Sundar Pichai became the CEO of Google in 2015, and now he stands in a position similar to Bill Gates almost 25 years ago, facing the American regulatory authorities. On Tuesday, September 12th, last year, and after a week of celebrating Google’s 25th anniversary, the first session of the antitrust case filed by the Department of Justice against the company took place. This trial, guys, is the most prominent antitrust case in the technology field since the Microsoft case. Many officials and analysts consider it the beginning of a US government plan to sue the five technology giants in America, which are Alphabet, along with (Amazon – Apple – Microsoft – Meta). In this episode, we will find out if their predictions are likely to be true. In short, we can call it the trial of the 21st century so far, without exaggeration.

      This statement raises some very important questions, such as: What prompted the US Department of Justice to launch its weapons against Google? What is the critical scenario that compels Google to pay billions each year to Apple just to avoid it? Could this affect the shape of the internet we use daily? Are there greater risks that Google faces beyond this case? These are some of the highly intriguing questions we will discuss in this article. Google, as we all know, is the company that produces many widely-used software products all over the world. These are things that you and I use every day extensively. “Like the Google search engine, which exerts almost complete control over internet searches, and Google Chrome, the most popular browser of all time, and of course, YouTube, which you are watching me on right now, the largest video platform globally… and even the best and most popular version of the Android operating system that many of us have on our mobile phones, all of these were developed by Google.” So, without any exaggeration, we can say that there is no person on the face of the Earth who uses the internet in any form and has not used or is not using a product from the company, whether in the past or currently,. and these products, along with other company products, dominate the market almost entirely. This is what the U.S. federal government is saying through the case they’ve filed, stating that their monopolistic power is giving them highly unfair advantages in the entire market. It means that the company handles approximately 90% of all online search operations in the United States alone. Can you imagine that percentage? It’s almost absolute dominance, and it’s practically summed up by the phrase “Ask Google.” That’s why this dominance, which is the foundation of Google’s massive advertising revenue, is the main driver of Alphabet’s entire revenue, pushing its market value to over 1.6 trillion dollars currently. For instance, if we look at Google’s revenues for just the past year, 2022, we’ll find that the company generated total revenues of around 280 billion dollars. Advertising on any website or platform owned by Google is the major contributor to these revenues, reaching approximately 224.5 billion dollars. Of these, about 162.5 billion came from search ads, and roughly 29 billion from YouTube ads.

      These numbers, as an example, illustrate how Google dominates both search and advertising, as I mentioned earlier. That’s why the Department of Justice is arguing through this case that no company, no matter who they are or what they do, should have such an extraordinary level of control over a market; that’s their point! But the truth is that this issue isn’t a spur-of-the-moment thing. In other words, the U.S. The Attorney General didn’t wake up one day saying: “What a bore I’m in; let’s file a case against Google.” The matter has deeper roots than that. This isn’t the first time for Google to face questions, issues, and fines regarding its dominance. If we go back a little to 2011, we’ll find that the Federal Trade Commission (FTC), the primary U.S. government agency responsible for enforcing antitrust laws, opened an investigation to verify allegations that Google was violating the terms of use agreement for the Safari browser, Apple’s browser, and that through these violations, it was planting cookies or files that track what users visited and when, in the Safari browser, and using them to show targeted ads. This investigation lasted for two years until 2013 and concluded with a settlement and a fine of $22.5 million. Although this fine was the largest at that time imposed by the FTC for any internet privacy-related case, it was, of course, a tiny fraction of Google’s revenue, which exceeded $55.5 billion in 2013. In the United States, from the perspective of lawmakers, they have been somewhat lenient on Google and large corporations in general, and their antitrust laws hadn’t been enforced rigorously enough for a long time. Europeans, on the other hand, have been seen as having better control over giant companies in general. That’s why we find that the largest fines imposed on Google have been in Europe due to their very strict enforcement of data protection laws compared to their American counterparts. To give you an idea of what Europeans have been doing regarding Google, let me tell you that in the last ten years, the European Union’s courts fined the company a total of 8.25 billion euros. These fines resulted from three major investigations over the past decade.

      What we want to focus on here is the significant fine imposed on the company in 2018 due to its exploitation of the Android operating system to enhance its dominance in search and advertising. This fine amounted to 4.1 billion euros, and Google appealed the decision. However, the General Court of the European Union rejected the appeal in September 2022. Currently, Google has only one chance left to annul or reduce the fine, and it will be presented before the European Court of Justice, the highest court in Europe, which will issue its final judgment in early 2024. This setback marked the second time that Google lost an appeal against such a substantial fine. The first instance occurred just one year prior in November 2021, when the General Court upheld a fine of 2.42 billion euros. The current status of the U.S. Department of Justice is just like: can you see that? Europe is taking a tough stance, so we need to follow suit. However, the truth is that the Google case did not start these past couple of days, but it was initiated during the final months of the former President Donald Trump’s administration. How is that possible? I want you to pay close attention to the coming. Approximately three years ago, on October 20, 2020, the Department of Justice filed the current case, a 64-page document in which the department alleges that Google began implementing its plans for market dominance in 2010. Over the past years, it made its search engine the default on a wide variety of devices and platforms, strategically positioning Google search prominently on mobile phones and computers. According to the Department of Justice’s accusations, the company achieved this by spending tens of billions of dollars each year to exclude competitors from important positions, such as major mobile phone manufacturers and popular internet browser developers.

      Google managed to do this by signing quasi-exclusive contracts with major companies like Apple, Samsung, Motorola, some of the biggest telecommunications companies, and a long list of leading companies in the United States and the world. For instance, the Department of Justice found that Google paid approximately 12 billion dollars a year to Apple. In return, Apple, one of the world’s largest sellers of mobile phones and computers, made Google search the default search engine on its devices for its users. To put this into perspective, there are currently more than 2 billion different Apple devices worldwide, most of them being iPhones and various computers. Most of these devices have Google’s most important product, the “search engine,” as their default search engine. The Department of Justice asserts that approximately half of the search traffic on Google comes from Apple devices. Apple, in particular, is the most critical and pivotal part of Google’s revenue, as we have seen. It’s an excellent opportunity for Google to establish itself on a vast global scale. This is why Sundar Pichai, ever since becoming the CEO of Google in 2015, saw Apple as a space where no one can mess around, even Apple itself, which, when it tried to object to some terms of the agreement, Google threatened to reduce its advertising payments.

      Pichai met with Tim Cook, Apple’s CEO, on multiple occasions, notably in 2017 and 2018, to strengthen cooperation between them. However, the meeting that the U.S. Department of Justice is focusing on is the one that took place in 2018. According to the 2020 lawsuit documents, Bechai met with Cook to address one fundamental question: How can we increase our annual revenues and profits together? Of course, this is a very important question. Why? Because we are simply talking about the largest and most important tech companies in the world, so imagine the incredible economic power that is nearly equivalent to the economy of several countries combined. After this meeting, the Department of Justice reported that someone from Apple had reached out to someone at Google and said, “Our vision is to act as if we were one company.”. Because of all this, Google sees its contract with Apple as crucial and very risky to the point that it considers losing such a contract or altering its core terms as a massive red alert or code red, a catastrophic scenario that should never happen in any form.

      Now, imagine if we put all this Apple dialogue next to Google’s ownership of the Android operating system, which is used by most users of the system, as well as Google’s ownership of its search engine, Chrome browser, YouTube as a viewing platform, and its dominance in the digital advertising market. If we mix all of this together, what could it mean? Exactly, a company that has the entire internet in its pocket. In the view of the Department of Justice, under the Trump administration, competition became impossible for any company, no matter who they were or how much money they had. The crucial aspect of this case was when it found rare political consensus between Republicans and Democrats in America to go after Google. So, what has Google said about all this? If we follow the statements of the company through its various media representatives and legal teams over the past years, we will find that these statements have remained largely unchanged. In simple terms, the company describes the issues as flawed cases, and its executives express extreme disappointment due to continuous European fines and the attempt by the U.S. Department of Justice to sue them. They see all of this as an attempt to push people to use lower-quality products in all aspects, just to create an illusion of consumer choice, even though these choices are poor and will harm users and their experience while increasing the prices of phones and softwarecosmos more.

      But, of course, all this doesn’t make a significant difference to the current generation of lawyers at the U.S. Department of Justice who want to launch a campaign against major tech companies, especially Jonathan Kanter, the Assistant Attorney General for Antitrust, who has been closely involved with Google for months. This is not Kanter’s first case against Google. He opened the current case, which he inherited from the Trump administration, regarding Google’s digital advertising monopoly. It’s clear that he won’t let Google off the hook easily. However, this doesn’t just apply to Jonathan Kanter but to a whole generation of American government lawyers who seem to have their minds set on big American tech companies. This is evident. Remember when I asked you at the beginning of the episode if the Biden administration would settle with Google or extend its reach to other tech giants of the Big Five in America? less than two weeks ago, on September 26th, the Federal Trade Commission, led by its rising star Lena Khan, started a lawsuit against the world’s biggest e-commerce giant, Amazon, for antitrust reasons related to its domination of online shopping services and undermining competitors. It’s clear that it’s not just Google that will face challenging times ahead.

      But truth be told, Google needs to focus on a bigger threat ahead of it than the U.S. government’s legal issues against it, and that threat is an old-new formidable adversary called “Microsoft”! if we switch to Google’s side for a moment, it’s currently going through an uncomfortable period following the rapid rise of OpenAI, the company that owns and develops the famous language model ChatGPT, which Microsoft sees as its biggest investor. Someone might be wondering what ChatGPT has to do with Google, Mr Ashraf! Microsoft currently, and after the tremendous success of ChatGPT in changing traditional search patterns for us as internet users, is attempting to wake up its search engine, Bing. Remember it? Yes, exactly, it’s the search engine that Microsoft tried to compete with Google using for 17 years. Now, Microsoft is planning to comprehensively improve Bing and integrate into it the deep search and artificial intelligence technologies of ChatGPT. Of course, this is causing some concern for Google, whose search engine has already started to be influenced to some extent. It means that you or I used to have a question, up until two or three years ago, and none of us could imagine anything other than entering Google to type the question and see what we would find. Now, we have a robot with a fantastic database that answers most of our common questions directly and very clearly. It gathers all the ingredients for you, cooks for you, and serves you the meal.

      This change in our approach to online searching, along with Microsoft’s staggering investment of $10 billion in OpenAI in 2023, has stirred up competition with Google. Google is trying to accelerate the development and integration of its own AI-powered language model in its search engine to keep up with the trend. But Google has a very important advantage here: the internet is still largely under its control, legally speaking, as I explained earlier. This has consistently given Google an edge over its competitors, and this is not just my opinion; it’s also what the US Department of Justice has stated. However, in contrast to this crystal clear truth, it is expected that Google will spend the next few years battling with US and European regulatory authorities to protect the global empire it has built over the past 25 years. But as usual, I have an important question for you? Do you think Google will escape this double war against the US government and Microsoft at the same time, and be able to resist? Or do you foresee a scenario, somewhat fantastical, in which Google’s future might come to an end?.

      Emad Hassan

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