The Google Dilemma Regarding Antitrust and Intellectual Property

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Table of Contents

Introduction
Google’s Nature of Business
Legal Issues and Regulatory Environment for Google’s Antitrust
Ethical Dilemma of Google and Ethical Frameworks
Other Legal Issues
Recommendations for Google and Other Businesses
Conclusion
References

Introduction

Google Inc. started two decades ago as a Silicon Valley startup with an innovative way of accessing the Internet. The company is headquartered in Mountain View, CA, and came into the business world in 1997, one year after it was established with its shares offered to the public in 2004 in the most unusual online way. By 2010, Google’s assets were valued at $57,850 billion, with its exponential growth being attributed to many acquisitions it made including the Keyhole Inc, DoubleClick, and Aardvark among other partnerships (Moss & Metcalf, 2019). Currently, Google is one of the search engines that are frequently used around the world, which has enabled the company to further raise its market share. However, recently, the company has come under scrutiny by the U.S Dept. of Justice due to engaging in business practices aimed at creating an illegal monopoly through anticompetitive and exclusionary tactics.

Google’s Nature of Business

The main product of Google is the search engine, which has enabled it to have global dominance. In addition, the company has other products such as Google Maps., Chrome Browser, Google Drive, YouTube, Play Store, Gmail, and the Android operating system. However, it is worth noting most of the above-named products are offered free of charge to Google users, but customers have to pay to access premium product features (Moss & Metcalf, 2019). Therefore, Google’s strategy is an example that proves the cost associated with a product does not dictate competition in the electronic market. Nevertheless, Google has managed to grow itself into one of the richest corporations worldwide with an accumulated asset valuation of $350 billion on Wall Street (Moss & Metcalf, 2019). For example, its market capitalization far exceeds that of other digital companies such as Microsoft, and Facebook (Moss & Metcalf, 2019).

Legal Issues and Regulatory Environment for Google’s Antitrust

The department of Justice alongside eleven state Attorneys General filed a civil suit against Google in the U.S District Court to stop the country from unlawfully maintaining its monopolistic tendencies. The Department was concerned that Google was accumulating undue advantage itself by controlling and manipulating the search engine segment (Ginsburg et al., 2018). The Department considered that millions of Americans rely on the Internet in their daily lives when instituting the case against Google. Therefore, competition is important in the industry, which today has become a challenge for Google, which acts as the gatekeeper of the Internet (Ginsburg et al., 2018). In this case, the company violated antitrust laws making it a monumental suit for both the Department of Justice and the American people. Thus, the lawsuit is at the heart of Google’s control over the Internet for millions of people in America and around the world (Miranda, 2020). Violation of the antitrust laws has affected advertisers, competitors, small and medium enterprises, and entrepreneurs obligated to illegal monopolies.

In many businesses, a search engine query must have an effective path that links it directly to the customers to be successful. Currently, the search engines are primarily distributed on mobile devices, smartphones, tablets, laptops, and desktop computers (Miranda, 2020). These devices access the Internet through web browsers, that is the software applications designed to access information online (Miranda, 2020). Additionally, the mobile devices use other, search access points, that trigger the search engines to give results to the customer’s query. Over the last ten years, the use of the Internet and search engine have grown, with a higher percentage being from handheld devices, which has surpassed that of computers. Therefore, these devices have become important avenues for search engine distribution in the world. The effective means of distribution is to have a preset search engine for both the mobile and computer search access points (Romm, 2020). Users have an option of changing the default setting of the search engine of their devices, but most people rarely do it. Therefore, this leaves the preset settings with the sole exclusivity as the pathway of accessing the Internet.

Over the years, Google Inc. locked out its competitors by entering into agreements that gave it exclusive rights, and tying agreements with device manufacturers, which ensured they only worked with the corporation. For example, Google Inc. pays billions of dollars every year to distributors of popular devices such as Samsung, Apple, and LG and other major US wireless carriers such as AT&T, Verizon, and T-Mobile to have Google applications as their default settings. Additionally, it has a standing arrangement with browser developers such as Opera, Mozilla and UCWeb set their default status of the search engine like Google (Miranda, 2020). The company has been doing this to prohibit its counterparties to engage with its competitors. Moreover, Google paid distributors to situate several of its products in prime positions where they can have higher visibility to the users, to increase its dominance.

Google’s exclusionary agreements account for 60% of all general search engine queries. Half of the remaining searches are channelled through Google’s browser, Chrome (Romm, 2020). Therefore, between the company’s exclusionary contracts, and owned and funded properties, Google controls the search engine distribution channels which account for over 80% of the general search engine entries in the United States (Romm, 2020). As a result, Google’s anticompetitive and exclusionary agreements it has entered with manufacturers and distributors of mobile devices resulted in the company controlling 90% of the Internet searches in the United States (Miranda, 2020). Therefore, Google has locked out its competitors from the Internet search engines. It has achieved this by ensuring its competitors have been foreclosed from important distribution channels, scale, and product recognition, which means they have no real chance of competing against Google.

Additionally, the lawsuit against Google by the Department of Justice was by Section 4 of the Sherman Act, 15, U.S.C to restrain and prevent it from violating Section 2 of the same Act, 15 U.S.C 2 (Miranda, 2020). The plaintiffs which included the states of Georgia, Florida, Texas, Arkansas, and South Carolina brought the civil suit in their sovereign capacity on behalf of their citizens, and the economy of their states under the common law or equitable powers as stipulated Under Section 16 of the Clayton Act, 15 U.S.C, 26 to prevent violation of Section 2 of the Sherman Act (Miranda, 2020). The court had legal jurisdiction over Google while the venue was proper under Section 12 of the Clayton Act because it transacts business within the district.

The antitrust laws, of Section 2 of the Sherman Act, under, which Google was sued are important because they support the free market and prevent monopolies from engaging in unfair anti-competitive behaviors. Additionally, the laws also empower the Department of Justice to bring legal suits to correct violations and restore competition in the market. As such, the Department has sued other companies in the past in cases involving monopolies in critical industries such as in the Standard Oil and AT&T telephone monopolies (Antitrust Lawsuits, 2020). Moreover, some years back, the US Department of Justice sued Microsoft and argued that it had the jurisdiction over tech companies to stop anticompetitive and predatory behavior which creates monopolies that stifle fair competition (Romm, 2020). Google is alleged to be using the same tactics to maintain its market share and dominance.

Ethical Dilemma of Google and Ethical Frameworks

Since its inception, Google has faced numerous ethical dilemmas in its daily operations. However, the most common revolves around misuses of its general search engine, search results, and the allegations that it is using a reality interface to manipulate ranking to access vertical services on top (Ebert, 2019). Additionally, the company has been accused of sexist portrayals of gender and having the mandatory installation of its apps and services on the android operating system, which is used by 80% of mobile devices (Romm, 2020). Therefore, the different legal cases brought against Google require the company to evaluate if by launching its services it acted either ethically or unethically.

After careful consideration of all the ethical dilemmas facing the company, Google may have used the consequentialist theory in its decision-making process. The egoistic decision-making approach seems like the path the company chose, and it is backed by the solutionism that Google is famous for because of its dominance in the digital market (Larres & Kelly, 2021). The above approach implies that Google acted beyond the ethics of self-interest, and with such an approach, a person can calculate their next move using a utilitarian calculation in apportioning the maximum benefits to the company as opposed to producing the highest good for everyone. Solutionism is the idea that most of the problems in the world have technical fixes, which is true through numerous rewards garnered by telecommunication companies for inventing solutions to problems (Ebert, 2019). Google has heavily relied on this premise to justify its business approach and decision-making.

The business practices that result in higher technical success are converted into an ethical challenge in the long run. The tactics are employed in the search for the procedures, evaluative metrics, and checklists that can solve complicated ethical issues into actionable technical works in engineering (Larres & Kelly, 2021). However, the above optimism is surpassed by the concerns that, when it is posed as an engineering inquest, ethics becomes a problem. Such ethical challenge becomes evident when addressing challenges of unfairness and biases created by Artificial Intelligence. On its part, Google understands there are various statistical approaches to solving its dilemmas, but it is unwilling to correct the inherent biases in its data collection and manipulation that have been highlighted as unethical.

However, it is important to demystify the criticism around Google’s unfair and biased behavior in its business approach and ethical frameworks. It is crucial to understand the relevance of using the virtue approach or frameworks. According to the above method, ethics should be a long-standing tradition, and consistent with the human virtues. Aristotle argued that the idea of ethics at Google should involve itself with the safety and livelihood of customers and consumers, but not at its pleasure (Larres & Kelly, 2021). Considering virtue ethics concerns entirely with an individual’s entire life, it encourages seriousness in training, correction, and education. It fosters principles of role models in understanding how other corporations should act ethically without biases.

Other Legal Issues

Apart from antitrust and consumer protection issues, Google Inc has been in the spotlight for violation of other law clauses. The company has been sued for a privacy violation, discrimination, advertising, and copyright infringement. For example, a U.S District Court for the Northern District CA brought a case of confidentiality in the case, United States v Google Inc (Kokkoris, 2017). The court approved an order for a civil penalty judgment and a permanent injunction. The court imposed a penalty of 22 million USD, which is the largest that the Federal Trade Commission (FTC) ever won (Kokkoris, 2017). Additionally, since Google had earlier been indicted for violation of privacy, the FTC and the corporation agreed to resolve the dispute in an out of court settlement. The company was held responsible for misrepresenting its assurances to users of the Safari browser, which is owned by Apple Inc. However, Google had placed advertising cookies that tracked how customers used it.

In the business world, copyright infringement is a serious offence that can deny others a chance to make a profit from their innovation. Viacom brought a legal suit in the U.S District Court of the South District of New York. In the Case, of Viacom International Inc, vs YouTube, the plaintiff claimed that YouTube, which is owned by Google, allowed users to watch and upload files and videos owned by Viacom without its consent. However, a summary judgment for dismissal of the case by Google was passed and granted in 2010 (Romm, 2020). The DMCA argued that the safety provisions protected Google from the claims such as the ones made by Viacom. Additionally, an appeal by Google was favored by the court in favor of YouTube, although the two companies later settled in an out-of-court agreement. Google was also embroiled in another legal suit whereby it was used by Rescuecom Corp in a case heard at the U.S Court of Appeals (Kokkoris, 2017). The court ruled that the recommendations of trademarks were an infringement since they involved the commercial use of trademarks. Rescuecom accused Google Inc. of making recommendations of its trademarks to other businesses who were direct competitors it and bought keywords through Google’s AdWords product.

Recommendations for Google and Other Businesses

Despite the huge number of legal suits brought against Google and the numerous ethical violations leveled against it, Goggle has remained a leading telecommunication corporation and a pioneer in IT Law. Other leading telecom giants such as Apple Inc, Samsung, and Facebook among others have had their stint of ethical violation, infringement, patent violation, discrimination, trademark infringement, and privacy violations among other legal issues (Allison, 2019). Therefore, the following are recommendations for Google and other telecommunication giants which if considered carefully can improve the ethicality of business practices and create an enabling working environment. As a result, the firms will reduce legal suits and labor turnover which will increase their profit in the long run.

The high cost associated with legal suits and settlements is meant to act as deterrent measures for corporations to avoid anticompetitive behavior. However, the cost of lawsuits is cultivated by the mindset of the system of the litigant. The above concept is anchored on the premises of involving lawyers of the disputing firm in the process. The expensive lawyers hired work hard to connect the dots of every piece of evidence and ensure that all the legal arguments are favoring their clients. Processes such as pre-trial are involved to ensure that the case is not unsolved during the collection of valid evidence (Allison, 2019). However, to claim more attorney’s fees, lawyers ensure that the case drags on as long as it takes. Therefore, in dispute resolutions, managers must learn to avoid lengthy legal suits as this will adversely affect the firm in the long run.

Lastly, managers must become acquainted with the ADR tool which is an important concept in leadership. The approach involves a collection of efforts that combines lawyers and companies in need of managerial participation at all levels. However, the ADR tool should be employed with considerable skills and in some cases, the opponents should be involved in the internal briefing to attain a mutually beneficial result (Allison, 2019). Some of the commonly used ADR tools include arbitration, mediation, rent-a-judge program jury trial, and mini-trials among other techniques that suit a specific legal dispute.

Conclusion

Google Inc. has managed to establish itself as the leading general search engine. However, the company has been marred with legal disputes ranging from consumer protection to privacy violations. The U.S Department of Justice 2020 brought a suit against Google for engaging in anti-competition tendencies aimed at increasing its monopoly dominancy in the general search engine segment. Google has been masking arrangements with device manufacturers to place its products strategically on their devices to ensure that they have higher visibility. Additionally, the company has been buying out startups to ensure it has no competition. As such, Google has emerged as the preferred general search engine of most people using the Internet. Its ethical framework has been the source of its problem since it encourages predatory behaviors which infringe on the right of other corporations and violation of the Sharman Act Section 2.

References

Allison, J. (2019). Five ways to keep disputes out of court. Harvard Business Review.

Ginsburg, D., Geradin, D., & Klovers, K. (2018). Antitrust and intellectual property in the United States and the European Union.SSRN Electronic Journal.

Antitrust Lawsuits: Google 2020 Vs. Microsoft 1998. (2020). In All Things Considered. NPR.

Kokkoris, I. (2017). The Google case in the EU. The Antitrust Bulletin, 62(2), 313-333.

Larres, P., & Kelly, M. (2021). A framework for authentic ethical decision making in the face of grand challenges: A lonerganian gradation. Journal Of Business Ethics.

Miranda, J. (2020). Department of Justice sues Google for alleged violations of antitrust laws.Harvard Journal of Law & Technology.

Moss, E., & Metcalf, J. (2019). The ethical dilemma at the heart of big tech companies. Harvard Business Review.

Romm, T. (2020).Justice Department sues Google, alleging multiple violations of federal antitrust law. The Washington Post.

Ebert, I. (2019). The tech company dilemma. ethical managerial practice in dealing with government data requests.Zeitschrift Für Wirtschafts- Und Unternehmensethik, 20(2), 264-275.

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