Fifty attorney generals have declared war over what they term as Alphabet Inc. (NASDAQ:GOOGL)’s ‘monopolistic behavior.’ The attorneys from different states across the U.S have since launched a probe over the tech giant’s online advertising business.
Google Antitrust Probe
By virtual of being the biggest search engine, Google dominates almost all aspects of the search business as well as advertising online. The attorneys allege that the company continues to misuse its dominant position. The attorneys have also taken issue with the way the tech giant continues to use people’s data.
Google has refuted claims maintaining that its services have helped people in addition to creating more choice as well as job opportunities. According to Google senior vice president for global affairs, Kent Walker, the company is one of the top spenders in research and development. The investments, according to the executive, have gone a long way to spur innovation rather than curtail competition.
“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, and getting an answer to pretty much any question you might have,” said Mr. Kent.
Possible Ramifications
An antitrust probe is something that Google cannot take lightly. Any slight evidence pointing to anti-competitive behavior could result in the company being compelled to change some of its algorithms, in a bid to make them friendlier to rivals.
This is the last thing that the search giant would wish to happen as it could have serious ramifications on its core search business that is a key driver of revenues on the advertising front. The company may also be forced to spin off some of its other units such as YouTube as a way of curtailing the amount of power it wields online.
Facebook Inc. (NASDAQ:FB) is another tech giant that finds itself at crossroads with attorney generals in the US. New York State Attorney has already launched a multistate investigation that will focus on the company’s dominance of the social networking space. The investigation, just like Google’s, will also focus on the company’s anti-competitive practices on virtual of being the dominant player in the industry.
