Confirmation that Google is a monopoly frames the federal government’s continuing attempts to regulate social media and search engines in a new light.Drew Angerer/Getty Images
Blayne Haggart is an associate professor of political science at Brock University. His latest book, with Natasha Tusikov, is The New Knowledge: Information, Data and the Remaking of Global Power (Routledge, 2023).
The Monday finding by a U.S. court that Google GOOGL-Q has an illegal monopoly in online searches is immensely clarifying. The case focused on how Google paid billions to ensure its search engine is the default in new cellphones and gadgets. But it underscores a wider issue.
The ruling reinforces what those of us who study online platforms have always taken as a fundamental fact: The desire and ability to monopolize markets largely defines what it means to be a platform.
More concretely and closer to home, confirmation that Google is a monopoly also frames the federal government’s continuing attempts to regulate social media and search engines in a new light. To be blunt, it fully vindicates the government’s regulatory approach with respect to its legislation regulating online culture, online news and, most recently, online harms. If anything, this ruling suggests that Ottawa hasn’t gone far enough.
Monopolies are evidence of what economists call market failures. In an ideal competitive market, competition keeps companies in line and working to improve their products at competitive prices. But when you’re a monopoly – a company that dominates a market – you can do pretty much whatever you want.
This can include raising your prices above what you could get away with in a competitive market. But it can also include lowering the quality of your product, which amounts to the same thing. Why hasn’t Google suffered any loss of market share after polluting its best-in-industry search engine with factually questionable generative artificial intelligence results or with advertising? Because it’s a monopoly.
Google isn’t the only online monopoly abusing its position. For the past year, Facebook has been banning legitimate news sources from its Canadian network as part of its refusal to follow Canadian law and pay Canadian news media. Users, who still want to share legitimate news sources, are getting around the ban by trading screenshots of links to news stories, a kind of digital samizdat. Like Google, Facebook’s parent company, Meta Platforms Inc., has been able to get away with this because it has a monopoly on a key slice of social media.
Or consider what I’ve noticed from personal experience about Twitter/X. Famously, Elon Musk has degraded the technical infrastructure of the former Twitter while also reopening it to the most vile racist, misogynist and antisemitic content. So why have so many academics, media and governments apparently flocked back? Likely because although X has competitors, they’re not exact substitutes for what it offers. Like Facebook, it’s a monopolist.
The economic argument for government regulation of monopolies – for the rectification of a market failure – is overwhelming. When it comes to regulating monopolies, the economist’s question isn’t whether to do so, but how.
Here, too, the U.S. court’s finding of monopoly clarifies Canada’s own digital regulation debate. Scholars who study online platforms easily understand these companies as monopolies. In contrast, a lot of opponents to Canada’s platform regulation agenda have, in effect, been arguing against the need for any substantive regulation. While this position is often seen as freedom-loving cyberlibertarianism, at heart it’s mostly old-fashioned market fundamentalism.
In the coming days, much will be claimed about the need for greater competition to blunt Google’s market power. While this may seem like an obvious remedy, it’s also unlikely to get to the heart of the problem.
Search engines and social media aren’t regular market services. Rather, they’re best thought of as public utilities: basic media services upon which we have come to depend. What’s more, they demonstrate characteristics of what economists call natural monopolies. These are the result of network effects, among other things: If everyone you know is on a platform, it’s really hard to leave, no matter how bad the service gets.
Understanding Google and social media as monopolies, and likely natural monopolies, points us toward the need for extensive governmental regulation to keep them from messing with users and to force them to deliver the high-quality services that Canadians require. This very much involves doing more, including requiring them to carry legitimate news sources, reduce abusive behaviour by following publicly mandated rules and meet publicly determined high-quality search standards. If these are utilities, we should regulate them as such.