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From Donald Trump to Elizabeth Warren, it's not hard to find people who think Google has become too powerful.
But when it comes to knowing what to do with Google's power, there is no simple answer.
The internet giant controls more than 37% of the online advertising market, more than 92% of the search market, it owns the largest video streaming site in the world and manufactures the software used on 8 of the 10 phones of the world. This omnipresence has prompted calls to limit the power of Google.
According to a recent report in the Wall Street Journal, the US Department of Justice is preparing an antitrust investigation on Google.
We still do not know what part of Google's activities will target the DOJ's investigation, let alone what kind of penalties might be considered. Given the size and diversity of Google's business – including the fact that Google is part of the largest Alphabet holding company – regulatory measures could yield many results, including increased monitoring, new restrictions on to the expansion of its business and even the Word B (break!).
Business Insider has been talking with several antitrust experts and Wall Street badysts to get an idea of how this might unfold and the risks that Google is facing. Here's what they say could happen to Google if it turns out that it violated the antitrust rules.
More fine
Since its inception two decades ago, Google's biggest problem with government regulators has been financial penalties. In the United States, Google has ambaded a collection of modest fines for violating privacy rules. In Europe, the penalties have been more severe. The European Commission has fined Google about $ 10 billion over the years for various anti-competitive practices.
The question of whether these sanctions are effective for a company whose balance sheet amounts to more than 100 billion dollars and which generated an annual turnover of 137 billion dollars last year is the subject of a debate. But according to many experts that Business Insider has spoken to, this is not a debate that will occur with the latest US antitrust campaign.
"I do not think that a fine will be on the table," said Robert Lande, a law professor at the University of Baltimore, at Business Insider.
Indeed, as Lande explains, the DOJ can not impose a fine on Google unless the company has breached a pre-existing agreement. And today, no such agreement or consent decree exists between Google and the GM.
"If there is a settlement, anything is possible.But a fine would amount to a breach of an agreement.Aut unless they violate an agreement with the government, you can not inflict d & # 39; fine, "said Lande.
New York University law professor Harry First agreed that heavy fines were an unlikely outcome for an antitrust investigation.
"It would be an order to stop doing what they do, maybe ask them to do some things that they do not do before, which could create competition in areas that the government is considering "said First. "But not money."
"I would start with the case of the EU against Google"
Another reason why Google does not have to worry about the heavy fines imposed on the United States is the way American regulators are badessing the damage caused by anti-competitive behavior in relation to the way they are committed in Europe.
"The EU is focusing more on the damage done to its competitors, while the US is focusing on the damage done to consumers," said Michael Carrier, a law professor at Rutgers University. In a world of free consumer web services, from Gmail to Android, it's hard to say that consumers are harmed.
That being said, the measures taken on the other side of the Atlantic are a good blueprint for the Google activities that the DOJ could rely on. In particular, Google's advertising activities, research activities and Android software have proven to be successful investigative targets for EU authorities.
Read more: Elizabeth Warren has tried to turn a technical crisis into a veritable wave of repression, and the technology will suffer even if she is not president.
"As for European affairs against Google, that's where I would start," Carrier said. "Regarding the search, has Google favored its own shopping services compared to its competitors? On the ads, what effect have the exclusivity clauses? And on Android, that in is there any integration of Google software to Android? "
While these past crime areas may be a starting point for the DOJ, a source at Capitol Hill, who recently spoke with Business Insider, said the DOJ investigation would likely focus on anything Google.
Breaking is not easy to do
The big question is whether a possible DOJ action against Google would have more force than the antitrust investigation conducted in 2013 by the Federal Trade Commission on Google's business practices in search and smartphone.
Google has moved away from this meeting without incurring any financial penalty and committed only in vague promises to change certain business practices, a result denounced by many critics as a slap.
Perhaps, given the current political climate and the discourse on the dismantling of "big tech", things will be different this time around. For the first time since the progressive era of the early 1900s, the concentration of corporate power is a hot topic in the upcoming presidential election.
Politicians declared – like presidential candidate Elizabeth Warren – have called for a split of key players in the technology sector, including Google, Apple, Facebook and Amazon. For Google, Warren said that to "relax" the search giant, it would begin by asking the company to sell major acquisitions such as its Waze card service, Nest's smart home hardware company and the platform. DoubleClick.
This may be easier said than done however. Many antitrust experts who spoke to Business Insider this week said the probability of a breakup was low.
"It's very difficult to absorb previous acquisitions," said Carrier of Rutgers University. "The companies have been merged and it is difficult to" decipher the eggs "."
For example, Nest – which was acquired by Google in 2014 – is now fully absorbed by the company's hardware division. In May, at this year's I / O developer conference, the company announced that the brand of its smart home products would now be called "Google Nest," as in "The Thermostat". Learning Google Nest "and the" Google Nest Secure Alarm ".
The internal silos between the old Nest team and Google's hardware division have also disappeared, Rishi Chandra, Vice President of Nest Product, told Business Insider.
"It's a team now – a road map across the organization," Chandra said.
Due to the difficulties encountered, a real "break", said experts, said an expert who concluded that the DOJ's investigation was more plausible if the agency blocked future offers for Google. And for the tech giant, this could present potential risks.
"[The DOJ] We can absolutely block any acquisition, "said Business Insider Michael Pachter, chief executive of Wedbush Securities, this week.[I] doubt, there are many companies "needs" Google to buy … [but] Blocking future acquisitions is always a risk for any large company. "
As for knowing where Google might be most affected if the DOJ opted for a strategy of "blocking" rather than "disbadociating", Wedbush Securities' Managing Director, Dan Ives, told us that he "s going to be the most affected. probably would be business cloud enterprise, Google Cloud Platform (GCP). ), which currently ranks third in the market behind Amazon Web Services and Microsoft Azure.
"The main problem is whether this limits Google's focus on acquisitions around GCP," Ives said. "With [Thomas] Kurian coming to Google, this was a series of much larger mergers and acquisitions in the cloud. "
Kurian was named Google's cloud manager in January, replacing Diane Greene. After 22 years at Oracle, Kurian is expected to help the company's cloud sector compete with Amazon and Microsoft in the corporate world. Analysts had expected M & A activity to be partly a move upmarket.
At present, Mr Ives said that even if the survey did not finish, the potential of the investigation could make Google reluctant to adopt a more aggressive acquisition strategy .
"It looks like the shadows are cut off by the shadows of the DOJ's antitrust investigation," Ives said. "I would be surprised that they are aggressively embarking on mergers and acquisitions now that they are in the spotlight."
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