Is this the end of tech giants and their monopolies? Now that the American justice system is seriously considering breaking up Alphabet, many people are hoping so. Especially since there is no guarantee that Washington will not be tempted to go after Amazon, Apple, Meta and others.
In early August, the courts ruled that Alphabet’s Google controls the lucrative online search market through anticompetitive practices worthy of a monopoly. Then, last week, the U.S. government took its thinking a step further: What if Alphabet were broken up?
It’s not frivolous to imagine. Because when we talk about Alphabet, we’re talking about much more than a search engine. Within the digital conglomerate, we find Google, YouTube, the people responsible for the Android mobile system, the Chrome browser, the Pixel and Nest devices, the Google Workspace suite, the huge digital advertising network, a cybersecurity division, artificial intelligence labs that revolve around Gemini and DeepMind, and tutti quanti.
That said, it would be more than surprising if all of this were broken up into separate entities. The monopoly issue only affects web search, including the default search engine on desktop and mobile browsers. The main point of contention is the billions of dollars that Google pays out annually to companies like Apple, Opera and others to encourage them to use Google over, say, Bing, DuckDuckGo or some other, more marginal search engine.
Google will probably simply be banned from continuing to do so. It’s the lesser of two evils for Alphabet, and the least effort for Washington.
The Amazon File
It is not clear how this will be resolved. What we do know is that after this case is closed, Amazon will be the next in the crosshairs of the American justice system. Here is another one playing a double game, this time in online commerce, where its market share is overwhelming but not total. About half of the purchases made on the Internet in North America go through Amazon.
This makes its sales site essential for all e-tailers hoping to prosper quickly by living solely from Internet sales. And Amazon knows this. This is why the cyber giant imposes, it is said, a policy where the price displayed on its site by third parties must systematically be lower than that displayed for the same product elsewhere on the Internet.
Above all, Amazon also sells products on its site under its own brand, Amazon Basics, at prices often lower than those of these same retailers, who are thus stuck between a rock and a hard place with the Seattle giant. This is where Amazon could be caught: being both a player and a croupier, a practice that is at the very least… questionable.
The Apple case
Apple is also seen by some American elected officials as exercising a form of monopoly in the mobile applications market. The Cupertino company very jealously controls who, and what, can be displayed in its App Store, a single gateway to the phones or tablets of billions of consumers around the world who, as we know, spend more than others when it comes time to buy applications or subscribe to online services.
Apple’s case is interesting because the European Union (EU) has ruled and has required Apple, since this summer, to allow other app stores to sell their own games or apps directly on the iPhone. Europe has also required Apple to let third-party digital payment services run on its phones without having to use Apple Pay, which saves them from paying a fee to Apple.
Unsurprisingly, Apple only complies with these requests in Europe. And even there, the Californian manufacturer warns its users three times rather than once that installing a third-party service is done at their own risk. Many people, starting with Epic Games, publisher of the Fortnite platform, extremely popular with younger Internet users, would like to see the United States impose the same requirements as the EU on Apple.
The Chinese threat
If Google has a monopoly in its market, it seems logical to say that Amazon and Apple do the same in theirs, right? The problem, if you answer yes to this question, is that the response of these giants is already known: can you be a monopoly when you face more than emerging Chinese competition — and whose business practices are even more ferocious than ours?
Because that’s clearly the refrain of the hour in the United States. Meta, the former Facebook, is no longer even part of the debate on monopolies, now that TikTok has stolen the digital limelight. Amazon will always be able to claim that Temu, which sells items in virtually every consumer niche imaginable, beats Amazon every time with prices so low that they sometimes defy belief.
Apple, which narrowly avoided competition from Huawei, is in the same situation. Samsung remains its closest competitor, but the four largest phone vendors after them are Chinese: Xiaomi, Oppo, Vivo and Realme.
Note that none of these four brands are yet selling their products here. This is no coincidence.
Perhaps this is a sign that the era of technology monopolies is coming to an end.