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Google, Gatekeeping And Government

The US action against Google charges it of locking up deals with giant partners like Apple and throttling competition through exclusive business contracts and agreements, for instance to make its search engine the default option for users.

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The bigger one grows, the greater the attention that is attracted. It is both a public recognition and vindication of one’s stature. The case of Google and other tech behemoths like Amazon, Apple and Facebook is a pointer to the fact that global monopolies are on the rise and national governments are unable to control them. What is the learning for countries like India?

Recently the US Department of Justice launched a federal antitrust lawsuit against Google and its parent company Alphabet. Other leading digital companies like Amazon, Facebook and Apple too have been accused of enabling election manipulation, violating privacy and abusing their digital monopolies. The House Judiciary Subcommittee argued that “companies that once were scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons.”

The challenge to Google’s suzerainty was initiated in Europe where it was fined about 5 billion dollars. “Google has cemented its dominance in online search adverts and shielded itself from competitive pressure by imposing anticompetitive contractual restrictions on third-party websites,” Europe’s top antitrust watchdog, said in a statement. The fine centers on contracts that license the use of Google’s search bar on websites run by newspapers, blogs, travel services and other companies – operators of third-party websites using Google’s search bar had been required to display a disproportionate number of text ads from Google’s own advertising services over competing digital advertising companies.

The US action against Google charges it of locking up deals with giant partners like Apple and throttling competition through exclusive business contracts and agreements, for instance to make its search engine the default option for users.

Economists frown upon monopolies because of price-fixing, stifling of competition and disregard to service quality. However, in an extremely competitive digital world today, it is difficult to sustain such monopolies interminably, because there are no limitations on innovation whereas there are limits to integrating vertically and horizontally. The argument that Google’s monopoly status stems from it being “the unchallenged gateway to the internet for billions of users worldwide,” is also specious argument. Anybody successful in digital business will necessarily have a bigger market share as the digital world knows no boundaries and enables ubiquitous operations. Beside, by being a search engine Google is actually in the business of gatekeeping.

In a digitally directed world, governments need to ensure that innovation is not impeded. As long as Google is not obstructing competition it cannot impede innovation. As regards Google in India, we should prioritize development of our own vernacular, speech-driven search engine before

Google develops one. That Google has announced ten billion dollars for an India digitization fund, and intends to promote small industry and free internet access is a welcome step. We should encourage collaboration in public areas like Art and Culture. However, safeguards are necessary – a legal covenant is the sine qua non. Firstly, any digitization of cultural content should not become exclusive to Google alone. Secondly, any stylizations of the content should meet the standards of permissibility as approved by the government. Further, we should mandate that if it is ever established that Google has benefitted commercially from the digitalization of our cultural data they will be legally bound to then suitably compensate India on terms to be arbitrated in India.

In the world of the future, exclusive appropriation of native data will be the equivalent of squirreling away of physical artifacts for personal gain. A resource-stretched country like India with prime cultural, intellectual and diverse intangible assets must indeed leverage them – but to its economic advantage

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Raghav Chandra

Former Secretary Government of India

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