A recent ruling by the law makers in Japan sets the precedence for further scrutiny of the monopoly of big tech firms like Google.

For years it’s true that big tech has created monopolistic tendencies in controlling pricing and business ecosystems. To stop this very behaviour governments, across the world, have played a proactive role in controlling such practices.

The Japan Fair Trade Commission (JFTC) recently issued a cease and desist order against Google for unfair trade practices in relation to promoting its search services on Android devices of different original equipment manufacturers.

In a statement the JFTC said that Google has been influencing smart phone manufacturers through licensing agreements to preferably treat its search services and apps over those of its rival firms. The JFTC has stated that Google had violated Japan’s anti-monopoly law in the process.

Google has had similar problems in the UK and the U.S. in the past.

Let’s examine this move by governments across the world and why governments will continue to face new problems even as new technologies like ChatGPT will challenge Google in the future over such a monopoly.

Anti-monopoly laws – do they promote competition

For years Google and Apple have been fighting over the device operating system race. Google’s Android operating system has a 72 percent market share in the smart phone industry, and is distributed through Mobile Apps Distribution Agreements with manufacturers like Samsung and Lenovo.  

iOS, on the other hand, has a closed loop controlled ecosystem and has a 28 percent market share. In Apple’s case its manufacturing is exclusive and in Google’s case it works with manufacturers who have their own brand of devices, but license the operating system Android. Both force the app developer ecosystem and even the manufacturer, in the case of Google, to give their apps a priority over competitors.

Now if such is the dominance of Big Tech around the world then why was the “cease and desist” order enforced by the JFTC.

Antitrust laws stop monopolies and promote fair competition. Go back 140-years in history and one has to visit the United States to understand where we stand today. The U.S.A passed the Sherman Anti-Trust Act of 1890 to stop large conglomerates from killing competition.

Even after a century of these anti-competitive laws being passed these laws still apply to us because of the dominance of big tech firms. Investigations by the Department of Justice and the Federal Trade Commission have brought various allegations against these big tech companies including exclusive agreements and predatory pricing. Large firms like Amazon, Google and Apple say that regulations could hinder technological advancement if governments intervene.  

However antitrust law reflects broader concerns about market power, consumer protection, and the future of competition in the digital age.

It is true that consumers will follow what is convenient to them. They will only adapt to goods and services that offer a convenient role in their daily lives. However what they forget is that behind the narratives of big tech there are smaller companies genuinely trying to lower the cost of service to these customers, but are often beaten down by predatory pricing.

Unfortunately, these small companies do not have the sphere of influence to keep up in the race of narratives.

Big tech has the power to influence markets to set prices and they want to manage their power in the market. These big tech firms can get rid of competition and form a monopoly, which is a system where a company can become the market leader.

Consumers don’t realise that such monopolies or a corterie of companies can work together to raise prices and stop innovating altogether.
If governments do not step in then consumers stand to be paying for sub-standard services that eat up their savings.

Unfortunately the separation of State and Corporation is muddled by the lack of accountability and transparency. Let’s look at examples.
The power play between the Presidency of the Trump administration, in the first term, and the merger between AT&T-DirecTV had lawmakers in a crossfire. They were caught between a President wanting to block the merger, and a questionable progressive merger. Political pundits called it a personal vendetta of the President disguising the narrative as that of consumer protection, and the companies offered a counter narrative that the merger would benefit consumers with lower prices.

Every company like Microsoft, Apple, Google, Amazon and Meta (Facebook) have faced the ire of governments across the world, but, somehow they seem to come out on top because of the nature of and concentration of capital.

One would also want to study the Clayton Act of 1914 which stops mergers and acquisitions that creates monopolies. The Federal Trade Commission Act of 1914 ensures that big firms give accurate information of products and services. Even when armed with such laws, corporations continue to dominate the narrative. They understand that the State can only be reactive, which can be managed in the short run with a battery of lawyers.

What about India and big tech?

The Competition Act, 2002 addresses antitrust issues and it supports competition, stops anti-competitive practices, and finally protects the consumers.

It aims to stop dominance of certain enterprises, and regulates their collusion which can affect competition within India.

This law was further enhanced with the Competition Amendment Bill, 2022 to further strengthen the regulatory framework.

India too has had problems with big tech. There have been complaints against Google for allegedly violating the provisions of the Competition Act, of 2002. Recently an Indian startup  foundation named Alliance of Digital India Foundation filed a complaint with the Competition Commission of India (CCI) alleging Google for abusing its dominant position in online advertising. The complainant alleged that Google was involved in the act of “self-preferencing” its own products over others. The complainants prayed to the court that this was an anti-competitive practice prohibited under section 4 of the Competition Act, 2002.  Last year’s U.S. ruling against Google enables Indian businesses to now use a ruling to dismantle big tech monopolies in India.  

A U.S. judge said, in 2024, that Google had violated provisions of the Sherman Act by maintaining its monopoly in two product markets in the U.S.—general search services and general text advertising—through exclusive distribution agreements. Section 2 of the Sherman Act prohibits individuals and businesses from monopolizing, attempting to monopolize, or conspiring to monopolize any part of trade or commerce in the United States.

We may all believe in free trade and enterprise, but when something becomes very popular the consumer must be given a chance to discover and welcome products that are competitive. This statement is sadly a state of utopia.

Unfortunately for everyone, the State and the large Corporation will war with each other before the consumer discovers a new product, whose discovery is anyway led by large capital.

The role of policy must be to free itself from the grip of Capital and enforce protection of smaller enterprises that are innovative, and not just seeking protection under the guise of perceived innovation or political affiliation. This is a very thin line for law makers in any country to handle.

This is where the Court, the political outfits and the bureaucracy must work together with Corporations to truly enable innovation and foster a competitive environment.

At BCL India we truly believe in representing such companies that are innovative and transformational along with offering accountability and transparency in the ecosystem. Let’s transform lives together with wisdom. Hope you enjoyed this article.