Google’s “Don’t Be Evil”: Fail

Google/Alphabet's Offices

Google/Alphabet’s Offices

Google’s corporate motto is officially “Don’t be evil.” Corporate lore holds that a Google employee, Paul Buchheit, suggested it at a meeting about corporate values in early 2000 or in 2001. Buchheit, the creator of Gmail, said he “wanted something that, once you put it in there, would be hard to take out”, adding that the slogan was “also a bit of a jab at a lot of the other companies, especially our competitors, who at the time, in our opinion, were kind of exploiting the users to some extent.”

Google has since reorganized itself as Alphabet. The slogan has morphed to “Do the right thing.” It’s in the Corporate Code of Conduct.

Employees of Alphabet and its subsidiaries and controlled affiliates (“Alphabet”) should do the right thing – follow the law, act honorably, and treat each other with respect.

“Don’t be evil.” “Do the right thing.” “Follow the law.”

Unlike the United States, the European Union still enforces its antitrust laws. And the European Union has concluded that Google hasn’t done any of those things. It has done evil; it has failed to do the right thing; it has failed to follow the law.

The EU has concluded that Google/Alphabet, which controls an estimated 90% of the European digital search market, granted itself preferential search results under its closely-guarded search algorithms. If true, because Google has such a dominant position in the market that would be a violation of both the US and EU antitrust laws. Also unlike the U.S., the E.U. routinely levies fines that are intended to get the attention of ultra-rich multinational corporations. In this case, US$2.7 billion dollars. Not that this will bankrupt Google/Alphabet or anything; the $2.7 billion fine represents just over 2.5% of Google’s revenue last year and Alphabet, Google’s owner, had $92.4 billion in cash as of end of March. Not exactly a slap on the wrist, but in terms of punishing Google, not all that heavy, either.

The fine is likely to be a relatively minor concern for Google/Alphabet. The bigger issue is that the E.U. will want to have a means of monitoring the presentation of search results to make certain they are fair, and don’t, as the E.U. alleges, unfairly favor Google’s affiliates. That would involve Google/Alphabet allowing the E.U. to see its famous search algorithms, the crown jewels of the company. Sharing, even a very controlled sharing, of those closely guarded trade secrets is something Google is likely to ferociously oppose. You can expect a long, ugly and fierce fierce legal fight.

Google/Alphabet is hardly the only U.S. multinational that the E.U. is investigating. Apple, Facebook, Amazon and Nike are also targets of ongoing investigations. Before you accuse the E.U. of “picking on” U.S. companies, consider that this is really a consequence of the U.S.’s failure to enforce its own laws. There haven’t been any major antitrust cases in the United States in the last 25 years. The results were predictable. United States’ multinational corporations have turned in to scofflaws.Aside from occasional efforts to block mega-corporate mergers, there hasn’t been enforcement. As a result, the E.U. has stepped in to the gap.

We’re only surprised because we’ve gotten used to non-enforement of our laws.

And Google/Alphabet is partially to blame for that. That’s part of what those $15 million in lobbying expenses have gone to.

“Don’t be evil”? Don’t make WC laugh.