Opinion: Will Google End With the Same Fate as Standard Oil?
In one of the largest antitrust cases in American history, Standard Oil Company and Trust, better known as Standard Oil, was broken up. Today, Google may share the same fate.
Holding more than 50% of the U.S. market share Standard Oil dominated across multiple markets. Monopolizing on pipelines in collaboration with railroad companies, working with competitors to restrict trade, and unfair trade practices. As a result, in 1909, the U.S. The Justice Department sued Standard Oil for violating the Sherman Antitrust Act of 1890, prohibiting the restriction of interstate commerce and competition of the marketplace.
In 2023, Jan. 24, The United States Justice Department filed a civil antitrust suit against Google for monopolizing Digital Advertising Technologies in violation of sections 1, restriction of trade and 2 to “monopolize” the market of the Sherman Act (Justice Department). The justice department claimed that Google has been monopolizing advertisements, acquiring competitors, forcing advertisers to use Google’s products, in turn driving competition down.
1) Monopolizing the market
Source: StatCounter
Between 2009 and 2019, Google has dominated the market, controlling at least 80% of the market. Competitors have lost market shares, remaining consistently under 10%. Google’s control has given the company an unprecedented amount of control over its competitors (DuckDuckGo, Yahoo, AOL, Microsoft Edge/Bing, etc.). In fact, “Google acquired a publisher ad server (“DoubleClick for Publishers” or “DFP”), which had a 60% market share at the time. It also acquired a nascent ad exchange (“AdX”) through which digital advertising space could be auctioned”(U.S. v. Google). Controlling the advertising market as both the platform to sell and position to control who can advertise, innovations such as DuckDuckGo's privacy protective policies have been “denied” access to consumers by Google, locking consumers from discovering competitive search engines from discovering them (U.S. v. Google). To the American consumer, this means Google can charge advertisers whatever they want, resulting in higher prices for Americans who have to cover the high bill for advertising on Google and advertisers receiving less profits from raising prices.
Google has acquired over 200 different competitors, notably Youtube, Android, and Motorola Mobility. Normally acquiring other businesses isn’t a problem, however, with Google controlling the market they can acquire other businesses to further increase their market share, buying out their competitors; just like Standard Oil. If this were Google can and will decide which and how competitors can interact with consumers.
2) Will Google Be Broken Up?
It's unlikely that Google will be broken up. Even when Standard Oil was broken up into various companies they still continued to work together. Some even merged together like the Exxon Mobil Corporation, BP PLC, and the Chevron Corporation. With Google it's highly likely nothing happens because of how damaging it would be. What the case aims is to restore competition, unlike the breakup of Standard Oil breaking up Google will cause massive issues. Google services are all tightly integrated with each other, services that almost every single American uses. And it's likely if Google were broken up the resulting companies would work together to keep the interconnected web we all depend on. Structurally, breaking Google in its entirety is structurally impossible.
But it doesn't mean that no changes will be made, remedies to restore competition is possible. One step would be to dismantle or regulate Google’s advertising methods to allow competition and innovation to come back. We could also see another wave of innovation caused by Google fighting the anti-trust lawsuit. Back in 1998, Microsoft faced an antitrust lawsuit against the U.S. while they won during that time when resources were poured to fight the case it gave enough time for competitors to properly compete with Microsoft. The Justice Department can decide to force Google to Chrome to another independent competitor to balance the market. Even then, this can cause several problems due to Chrome’s heavy integration with Google web services.
There are still competitors in the tech industry like Apple and Microsoft. So while Google dominates the web, we’ll still see Apple, Microsoft, and Google duking it out for the best tech. At the end of the day, Google won’t be broken up; it's simply too important and relied on to be split.