48 states are probing Google on antitrust grounds. Why isn’t California?
Attorneys general from nearly every U.S. state have jointly launched an investigation into Google’s “potential monopolistic behavior.” Notable for its absence: California, Google’s home state.
Citing a need to protect the integrity of “potential and ongoing investigations,” Atty. Gen. Xavier Becerra declined to say why he refused to join the chief law enforcement officers of 48 other states, plus Washington, D.C., and Puerto Rico, in examining the Mountain View-based internet giant’s dominance in online advertising. Alabama is the only other state not participating in the probe, announced Monday.
For the record:
3:59 PM, Sep. 10, 2019An earlier version of this article incorrectly stated that Google donated $30,300 to Xavier Becerra’s 2018 campaign for California attorney general. That figure is the total Google has donated to his campaigns for the House of Representatives and attorney general.
Seeing as Becerra’s office has one of the most robust and aggressive antitrust teams in the country and his domain includes many of the largest tech firms, experts say it’s perplexing that he elected not to take part.
“I just do not understand why California is not a part of this effort,” said John Simpson, who served as the privacy and technology project director at Consumer Watchdog, a nonprofit advocacy organization, until he retired earlier this year. “Google has monopolized the market and really needs to be held accountable for that.”
It’s surprising, he said, because the state has been a part of so many similar joint efforts in the past. “I’m completely at a loss to explain why this is happening.”
For so many states to act in concert presents a “fairly powerful gesture,” said William Kovacic, professor of law at George Washington University and former chairman of the Federal Trade Commission under President George W. Bush.
“You can think of a sports team that’s witnessed the injury of a significant team member,” Kovacic said. “It’s still a great team but you’d like one of your stars to be present.”
Google’s parent company, Alphabet Inc., has a market value of more than $820 billion and controls so many facets of the internet that it’s nearly impossible to surf the web for long without running into at least one of its services.
Monday’s announcement of the Google probe, led by Texas Atty. Gen. Ken Paxton, trailed an announcement last week by New York Atty. Gen. Letitia James, who said Friday that the attorneys general of eight states as well as the District of Columbia had begun a bipartisan antitrust investigation of Facebook over the company’s control of personal data and privacy lapses.
The U.S. Department of Justice is conducting its own antitrust inquiry into Big Tech, and the FTC is taking a fresh look at anticompetitive behavior by Facebook and other companies. The House Judiciary subcommittee on antitrust is also holding hearings. But Monday’s move by the states suggested those efforts may not be enough to satisfy those who believe the biggest internet companies are abusing their power.
“I think the states have sort of lost their patience” with the federal government, said Sandeep Vaheesan, legal director at the Open Markets Institute. “They’ve realized the administration might make some noises, but aren’t expecting any meaningful action. They believe they have to act or nobody will act against Facebook or Google.”
As states go, California and Alabama have little in common, and the same goes for their attorneys general. Becerra is a Democrat in a blue state with big urban centers; Steve Marshall, attorney general of Alabama, is a Republican in one of the reddest states.
A spokeswoman from Marshall’s office declined to comment on the decision-making process for Alabama. “California remains deeply concerned and committed to fighting anticompetitive behavior,” a spokesperson for Becerra said in declining to comment on the investigation.
Assemblyman Jordan Cunningham (R-Templeton) called California’s non-involvement “embarrassing,” in a statement Monday. “California deserves to be at the table,” he said.
Cunningham is one of four California Assembly Republicans who introduced a resolution encouraging Becerra and Congress to take aim at Apple, Facebook, Google, Microsoft and Amazon last week.
As a candidate for the House of Representatives, Becerra was the recipient of considerable largess from Google. From 2010 through 2016, Becerra’s campaign received $23,000 from Google’s corporate political action committee, Google Inc. NetPAC, according to Federal Election Committee records. Two Google executives donated $2,600 and $5,300, respectively, to Becerra’s campaigns over that span. Google also contributed $7,300 to Becerra’s 2018 campaign for attorney general, and $3,000 to Marshall’s, according to data from FollowTheMoney.org.
But Becerra’s office has voiced support for cracking down on Big Tech. As California unrolls its Consumer Privacy Act, a far-reaching law that will put strict rules on how tech companies handle and collect user data when it goes into effect in January, Becerra called on the state Legislature to strengthen it. He and a group of privacy advocates wanted to strengthen it by adding a provision giving consumers the opportunity to sue if, for example, a company ignores a person’s demand to opt out of data collection.
Plus, Becerra’s office has not shied away from challenging powerful institutions, suing the Trump administration more than 50 times.
Kovacic speculated the decision came from even higher in the state’s political hierarchy than Becerra’s office.
“Why would they sit on the sidelines? It’s curious to see them take a walk on this one. We have to assume this was a political decision,” he said.
Weighing the possible effect of the states’ inquiry, Vaheesan pointed to the antitrust charge against Microsoft in 1998. In the early 2000s, the Bush administration wanted to settle for a few tweaks to Microsoft’s conduct. The states pushed for more aggressive structural remedies.
One outcome antitrust regulators might explore is forcing Google to spin off search as a separate company, experts say. Regulators also could focus on areas such as YouTube, which Google acquired in 2006.
Google has long argued that although its businesses are large, they are useful and beneficial to consumers.
“Google is one of America’s top spenders on research and development, making investments that spur innovation,” wrote Kent Walker, the company’s senior vice president of global affairs. “Things that were science fiction a few years ago are now free for everyone — translating any language instantaneously, learning about objects by pointing your phone, getting an answer to pretty much any question you might have.”
But federal and state regulators and policymakers are growing more concerned with the company’s influence not just on ordinary internet users but also on smaller companies striving to compete in Google’s markets.
“On the one hand, you could just say, ‘Well, Google is dominant because they’re good,’” said Jen King, the director of consumer privacy at Stanford Law School’s Center for Internet and Society. “But at the same time, it’s created an ecosystem where people’s whole internet experience is mediated through Google’s home page and Google’s other products.”
Google will control 31.1% of global digital ad dollars in 2019, according to EMarketer estimates, far surpassing second-place Facebook. And many smaller advertisers have argued that Google has such a stranglehold on the market that it becomes a system of whatever Google says, goes — because the alternative could be not reaching customers.
“There’s definitely concern on the part of the advertisers themselves that Google wields way too much power in setting rates and favoring their own services over others,” King said.
Times staff writer Samantha Masunaga and the Associated Press contributed to this report.
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