Given that Google earns more than $100 billion, there is “a fundamental conflict of interest between serving users who want to access the best and most relevant information and Google’s business model, which incentivises Google to sell ads and keep users on Google’s own sites,” David Cicilline (D-RI), the chair of the subcommittee, said at the Big Tech CEOs’ hearing before the House subcommittee on antitrust on July 29 (available to watch here). But Google CEO Sundar Pichai clarified that ads are shown for only a small subset of queries, “where the intent from users is highly commercial” such as buying a television.
1. Google dominates the online search market with over 85% online searches going through its servers.
2. Google aims to keep users within its own websites due to threat from ‘vertical search’: Cicilline said that documents show that Google has become “a walled garden” wherein the aim is to keep users within its sites as when users go to other websites, they divert traffic and revenue away from Google. Pichai agreed that the company looked at vertical search but called it a validation of competition instead of threat to it.
3. Google controls 90% of the digital advertising market: Google’s dominance isn’t limited to Search. Representative Pramila Jayapal (D-WA) pointed out that Google controls 50%-60% of the ad exchange market, by virtue of controlling middlemen like Google’s Display & Video 260 and Google Ads, it controls 90% of the buy-side market.
How Google’s advertising exchange works? Google’s DoubleClick Ad Exchange is a “real-time marketplace to buy and sell advertising space”. For a small business to advertise in this way, they would go to a middleman like Google Ads who would then bid for a space on the Ad Exchange.
4. Google’s Ad Exchange is a source of major conflict of interest, and has killed newspaper advertising: Jayapal explained that since Google is running the marketplace (via Ad Exchange), it controls the buy-side, and through the middlemen like Google Ads, it also controls the sell-side, thereby rigging the entire process. As a result, Google can set low rates as a buyer of ad space compared to newspapers, thus depriving them of ad revenue, and then sells it for higher revenue to small businesses who depend on Google for advertising. She likened it is to unregulated stock market that allows insider trading.
Google’s anticompetitive MO: Steal content, spy on competitors, prioritise own sites
5. Google steals content from other websites, and threatens to delist them: Cicilline, citing the subcommittee’s investigation, said that Google steals content from other websites, causing them to lose business.
- In 2010, Google stole restaurant reviews from Yelp, and when Yelp complained to the search engine, Google threatened to delist Yelp completely.
- Representative Ken Buck (R-CO) cited the 2019 case of Genius’s lawsuit against Google wherein Google displayed song lyrics from Genius in its search results, thereby causing traffic and consequently revenue of Genius to nosedive. Through a digital watermark that Genius applied on the lyrics of 271 songs, 43% showed evidence of copyright infringement.
6. Google used its massive surveillance apparatus on competitors: Cicilline asked Pichai if the company had ever used its “surveillance over web traffic to identify competitive threats” but Pichai, like Facebook CEO Mark Zuckerberg during the same hearing, just called it market analysis.
7. Browsing data from Google Chrome is used for advertising, improving algorithms: IN response to Nadler’s questions, Pichai essentially conceded that users’ browsing data is used to target ads (read: personalised experience) and improve algorithms.
8. Google uses data from rival apps to build competitors: Representative Joe Neguse (D-CO), who is also the vice-chair of the subcommittee on antritrust, cited a Verge article as per which Google has an “Android Lockbox” that gives the company access to information on how Android users use non-Google apps and services, including how long they are open and for how long they been in use. Pichai conceded that with user consent and APIs, Google does have that access, which is essential to maintain Android services as an OS, and gives this access to other developers too. This information may have been used by Google to launch its rival to TikTok, Shorts, as per the report.
- Pichai did not clarify if Google has used this data to develop competing apps, and just called such a practice market research (like Facebook and Apple).
Readers should note that although Neguse cited the Verge article, the original report was from the Information (available here) and our reading list will list the original Information report and the Verge report since the Information is paywalled.
9. Google leverages its own sites in search results: Cicilline cited The Markup’s article that said that 63% of web searches on Google end on Google’s own websites, thereby suggesting that Google’s aim is to keep users within its ‘walled garden’, not to provide most relevant information. This means that 53.5% of all web searches never step out of Google’s ecosystem of sites. But in response to questions by Chairperson of the Judiciary Committee Representative Jerrold Nadler (D-NY), Pichai said in ranking search results, Google did not “take into account any commercial relationship that we have”.
10. Disabling third-party cookies gives Google a huge competitive advantage: Representative Kelly Armstrong (R-ND) highlighted that despite being a good move from a privacy perspective, Google’s decision to retire third-party cookies give Google a huge competitive advantage because Google has alternative means of collecting user data to inform its digital advertising activities, unlike the third parties. However, Pichai clarified that Google does not use data from Gmail for ads except when users consent to it. He chose to ensconce it within a privacy-of-users debate (which it is) but compared it to similar steps taken by Apple and Mozilla Foundation. However, Apple and Mozilla Foundations’ primary source of revenue is not ad dollars, and third parties don’t depend on them for user data.
11. Google restricted third party access to YouTube ads, giving Google unhindered access to YouTube audience: Armstrong pointed out that in 2015, Google said that it would not allow third parties to buy YouTube ads via AdX (probably a reference to DoubleClick AdX). This means that “ad buys on YouTube are conducted only through Google demand side products”, Armstrong said. Google said it was to prevent third parties from developing user profiles and would thus preserve user privacy. But this reduced competition for demand side platforms on YouTube.
- For YouTube ads, advertisers must use Google’s own Data Hub only: Armstrong also pointed out that Google also limited the interoperability of third party analytics on YouTube and required advertisers to use only Data Hub, thereby consolidating Google’s hold over all the data.
“And there are policies that actually protect user privacy — Apple’s encryption policy, Microsoft just came out on facial recognition policy. My concern is that the position is that when we’re using privacy, we’re trying to use privacy and we’re using privacy as a shield, but what we’re really doing and what your company’s really doing is using it as a cudgel to beat down the competition. And when we’re talking about privacy, it’s a great word that people care about, but not when it’s utilized to control more of the marketplace and squeeze out smaller competitors.” — Representative Kelly Armstrong (R-ND)
12. Despite its promise to not do that, Google merged data from DoubleClick with other user data, effectively killing users’ anonymity: Representative Val Demings (D-FL) pointed out that when Google purchased DoubleClick, a tool for advertisers in 2007, despite the Congress’s concerns about the kind of user data Google would have access to, Google had testified before the Senate antitrust subcommittee that it wouldn’t merge this data. But in 2016, Google merged this data, “effectively destroying anonymity on the internet”, under the authorisation of Pichai. In 2007, Larry Page and Sergey Brin did not want to associate user data with cross-site cookies. Demings concluded that this meant that because of its enormous market power, Google did not have to worry about user privacy in 2016 any more. And since more than 80% of Google’s revenue comes from ad placements, Google has no incentive to stop using behavioural ads, she pointed out.
13. Splintering of Google’s businesses would reduce consumer choice, Pichai says: In response to Representative Frank Sensenbrenner (R-WI) question about impact of breaking Google into different businesses, such as YouTube and ad tech, on consumers, Pichai suggested that it would cause prices to increase and consumer choice to reduce. It is not clear how that would happen.
14. Google deletes location data by default after certain period, and law enforcement requests to Google for users’ location data increased by 15X between 2017-18, and 5X between 2018-19: Citing a Wall Street Journal article, Armstrong pointed out that geo-fence warrants, that allow authorities “to compel technology companies to disclose location records for any device in a certain area at a particular time” had risen significantly between 2017 and 2019, and that unlike search and seizure warrants that require cause and specificity, these require neither and act as general warrants. Pichai only said that Google now automatically deletes location activity after a certain period of time by default. It is not clear if that is the case for all users, including the ones on whom law enforcement wants more information.
Pichai on China and Google’s contracts with the US government
In response to Representative Gregory Steube’s (R-FL) question on whether the Chinese government steals technology from US companies, Pichai acknowledged that a cyber attack against Google originated in China in 2009 that led to “exfiltration of some code”.
Buck accused Google of modelling its policies after China, accusing the company of engaging in theft of intellectual property — like the Chinese military with whom Google has contracts —, exploiting labour, and engaging in corporate espionage. Buck sought to conflate Google’s now-terminated search engine project — Project Dragonfly — in China with its sympathy for the country’s “draconian security laws”.
Google is not working with the Chinese military: In response to Buck and Representative Matt Gaetz (R-FL), Pichai said that Google is not working with the Chinese military and its AI work in China was limited. He also clarified that Google has a cybersecurity project with the US Department of Defence to protect Pentagon’s networks from cybersecurity attacks, and other projects with the Navy and the Department of Veteran Affairs. He also said that Google doesn’t offer YouTube, Gmail, Maps, Search, etc. in China.
Pichai refuses to commit to cooperating with bigoted law enforcement agencies: Gaetz also prodded Pichai for Google pulling out of Project Maven — a controversial program that Google was developing for the US military wherein AI was being developed for drone strikes — at the behest of its employees. He attempted to cajole Pichai into saying that Google would continue dealing with law enforcement in the US, even if its employees found law enforcement bigoted and white supremacist, but Pichai stood his ground and said that Google will work with law enforcement “in a way that is consistent with law and due processes in the US” and has in the past “pushed back against over broad requests”.
Some Republican representatives chose to focus on conspiracy theories
Representative Gregory Steube (R-FL) thought that Google turning up different search results in different locations, across months was indicative of Google trying to curry favour with the subcommittee by not silencing conservative websites, to make up for its past history of silencing them. Pichai maintained that the company worked in a non-partisan way.
Steube then had an issue with how his campaign email weren’t landing up in people’s inboxes, including his fathers. “Our systems probably are unable to understand that that’s your father,” Pichai said. “There’s nothing about political ideology in the algorithm,” he said. Representative Val Demings (D-FL), in a moment of pointed levity, also said for the record her emails were also going to spam.
Representative Jim Jordan (R-OH) chose to “ensure” that Google didn’t tailor any of its features to help Joe Biden in the presidential elections. Pichai told him that Google worked in a politically agnostic manner. Jordan chose to harangue the point citing employee emails from 2016 that mentioned Google’s silent donation to the Clinton campaign, and that asked Latinxs to go out (not vote for a particular candidate, but just vote) and vote in swing states. Representative Mary Scanlon (D-NY) called Jordan’s questions “fringe conspiracy theories”.
Documents cited by representatives:
Documents from the Hearing on “Online Platforms and Market Power: Examining the Dominance of Amazon, Apple, Facebook and Google” pic.twitter.com/3hSdim2SAB
— House Judiciary Dems (@HouseJudiciary) July 29, 2020
Documents from the Hearing on “Online Platforms and Market Power: Examining the Dominance of Amazon, Apple, Facebook and Google” pic.twitter.com/j45ctS6xhF
— House Judiciary Dems (@HouseJudiciary) July 29, 2020
Documents from the Hearing on “Online Platforms and Market Power: Examining the Dominance of Amazon, Apple, Facebook and Google” pic.twitter.com/opV1XB0sOg
— House Judiciary Dems (@HouseJudiciary) July 29, 2020
Exhibits:
Documents:
News articles cited by representatives:
- Google’s Top Search Result? Surprise! It’s Google, by The Markup (July 28, 2020)
- Police Requests for Google Users’ Location Histories Face New Scrutiny, by The Wall Street Journal (July 27, 2020)
- Internal Google Program Taps Data on Rival Android Apps, by The Information (July 23, 2020) based on which Verge wrote its report Google reportedly keeps tabs on usage of rival Android apps to develop competitors (July 24, 2020)
Read more:
- Apple’s preferential treatment in App Store, coercive practices: 8 key takeaways from Cook’s deposition before the antitrust subcommittee
- Facebook bought, copied, threatened competition: 11 key takeaways from Zuckerberg’s deposition before the antitrust subcommittee
- Amazon targeted sellers, investees, AWS clients with anti-competitive practices: 9 key takeaways from Bezos’s deposition before the antitrust subcommittee
