Google’s CEO has made an appeal that the company should not be broken up, as federal regulators and Congress are directing increasing scrutiny at the tech goliath.
Google’s massive size allows it to invest in future technologies without worrying about ‘short-term profits,’ CEO Sundar Pichai insisted in an interview with CNN Business on Thursday.
‘Scale does offer many benefits, it’s important to understand that,’ argued Pichai. ‘Big companies are what are investing in technologies like AI the most.’
Pichai even hinted that if Google were subject to antitrust regulation, it would spell doom for American innovation, allowing competitors like China to seize the advantage.
Google’s massive size allows it to invest in future technologies without worrying about ‘short-term profits,’ CEO Sundar Pichai said in an interview on Thursday
‘There are many countries around the world which aspire to be the next Silicon Valley, and they are supporting their companies too. So we have to balance both,’ he said in response to a question about China.
It comes as Google and other tech giants face withering scrutiny over privacy practices, censorship, the gutting of local journalism, and potential anti-competitive practices.
News broke earlier this month that the Justice Department will look at Google and Apple, while the Federal Trade Commission will probe Amazon and Facebook to determine if they abused their massive market power, setting up what could be unprecedented, wide-ranging probes of some of the world’s largest companies.
Meanwhile, the House Judiciary committee is launching its own antitrust inquiry into the tech industry, including Google.
Asked about the various probes, Pinchai tried to project an air of equanimity, saying it was ‘perfectly fine’ for companies like Google to be scrutinized when they get big enough.
‘Scrutiny is right, and we will participate constructively in these discussions,’ he said.
Pinchai tried to maintain his cool as Poppy Harlow questioned him about the many and growing calls for antitrust investigations into Google
The growing hostility to Google’s market dominance has also appeared on the presidential campaign trail, with Senator Elizabeth Warren, a Massachusetts Democrat seeking the party’s nomination, explicitly promising to break the company up if elected.
‘I think there needs to be healthy debate,’ Pichai said when asked about Warren’s vow. ‘Any campaign has moments around that, but what matters to me is the healthy thoughtful conversations around it.’
‘I worry that if you regulate for the sake of regulating it, it has a lot of unintended consequences,’ he said.
On Tuesday, the U.S. Justice Department’s antitrust chief suggested he’ll take a broad view of how competition is harmed when assessing whether big tech firms should be broken up.
Assistant Attorney General Makan Delrahim also was clear in a speech in Israel that he is well aware that just two companies dominate digital advertising, though he did not name the two: Google and Facebook.
Assistant Attorney General Makan Delrahim (above) the DOJ’s antitrust chief, obliquely compared Google to Standard Oil, spelling trouble for the tech giant
Without indicating whether he plans to move against any particular company, he said factors to be considered in assessing whether a monopoly exists – meriting antitrust action – go well beyond whether a company’s dominance leads to higher prices
Google and Facebook’s free (to consumers) services have long been used as an argument against antitrust action, with the company’s arguing that their market dominance doesn’t cost consumers.
‘Consumers actually enjoyed lower prices during the height of Standard Oil’s dominance,’ Delrahim pointed out, referring to the company that was ruled an illegal monopoly and broken up in 1911.
‘The current landscape suggests there are only one or two significant players in important digital spaces, including internet search, social networks, mobile and desktop operating systems, and electronic book sales,’ he said during a speech in Israel, which was published on the Justice Department’s website.
‘This is true in certain input markets as well. For example, just two firms take in the lion’s share of online ad spending. ‘