Google once honored the Canadian philosopher and media theorist
with a so-called “Google Doodle” to predict the Internet’s invention in 1962. McLuhan’s work was so influential that he coined many of the phrases people use to talk about the Internet today: “the medium is the message” and “surfing” the web. He also predicted that the Internet would transform the world into a “global village.” But McLuhan never guessed that a single company could become the village gatekeeper and use his power to become the richest person in town.
We all know that Google is a search engine, but it may be more accurate to describe the tech giant as an advertising company. Each year, more than 90% of Google’s $ 117 billion in revenue comes from online advertising. For reference, the entire online advertising market is around $ 130 billion annually.
Google’s dominance stems partly from control of the online advertising market. It owns all, or most, of the components of the relevant marketplace: the tools websites use to sell advertising space on their sites; the tools advertisers use to buy that space; and the auction system used to connect buyers and sellers. Google also owns some of the busiest addresses on the Internet – such as YouTube and its own Google site – where ads are placed.
In other words, if you want to participate in the global village market – to connect with your customers – your only practical choice is to pay Google to give you directions to your customers. When one company has such a controlling and contradictory grip on an online market of $ 130 billion, it is the responsibility of antitrust management agents to ensure that consumer interests are protected.
Still, concern for the electronic advertising and publishing industry is not alone what inspired 47 attorneys general from both major political parties and all regions of the nation to begin an investigation of Google’s business practices this week. Google’s huge profits, driven by its dominance in online advertising, make it possible to touch almost all of us every day. We search with Google. We email with Google. We “sign in” with Google. We adjust our thermostats with Google. We even talk to Google.
My co-lawyers and I started this investigation because Google’s enormous financial power, driven by advertising, gives it unprecedented influence over the lives of Americans. It has the power to control what we read and manipulate the people and businesses we do business with. It can compromise our privacy. It can crush competition and consumer choice, just by lowering competitors’ websites in a dark ocean of search results. Information is power, and Americans are beginning to realize how much power Google has over them.
To be clear, the question is not whether Google is too big. Financial success, when achieved fairly and squarely, should be celebrated. But regardless of the benefits of Google’s product offering, we now have to ask whether its dominance has been achieved and maintained through business practices specifically designed to counter competition. That is what our investigation will seek to determine in the coming months as we examine Google documents.
The British pastor
once wrote that “a village is a hive of glass, where nothing unobserved can pass.” We simply ask Google to pull back the curtains and let’s see if the village gates are really open.
Mr. Paxton is Texas Attorney General.