Should Google Be Classified as a Public Utility?

Google and other Big Tech companies face challenges in every legal sphere, from the U.S. Congress and state legislatures to federal and state courts and authorities in foreign jurisdictions. Most critics of Google, Meta (formerly Facebook), X Corp. (formerly Twitter), Amazon (AMZN), and other tech giants focus on the companies’ market conduct and argue that their operations are anticompetitive and monopolistic.

The Federal Trade Commission (FTC) and state attorney generals have brought antitrust litigation against these powerful, Internet-based companies. Legislators have held extensive hearings and—viewing present antitrust law inadequate to address the issues raised by these corporations—are seeking legislative changes targeted at Big Tech’s power.  

Big Tech: Public Utility or Antitrust Regulation

While both the Biden administration and Congress are focusing on antitrust-oriented approaches to counter Big Tech’s power, the Ohio attorney general, in 2021, took a different approach in a lawsuit to combat Google’s alleged anticompetitive practices in its operations in the Buckeye State.

In a case filed in state court, Attorney General Dave Yost contends that Google’s operation of Google Search is a public utility and/or common carrier. The state asks the court to issue a declaratory judgment that Google Search is a common carrier and/or a public utility and to enjoin specific business and technical practices conflicting with this status.

Characteristics of a Public Utility or Common Carrier

Classifying a business as a public utility and/or common carrier, under Ohio law as well as the laws of other states and the federal government, recognizes that the entity’s operations affect the public welfare and subjects the entity to regulation.

A public utility is an organization that provides essential, i.e., necessary, goods and services—for example, electricity, telephone, or water services—to the general public on the same terms. Similarly, common carriers transport goods or services—for example, rail, airline, and telecommunications companies—for the general public without discriminating among members of the public.

Generally, both types of businesses are monopolies—exclusive providers of particular goods and services. Typically, they are expensive to establish and operate, and they are granted their exclusive status in the interest of consistency and economic efficiency in providing the necessary goods or services.

They are regulated by federal, state, or in some cases, local commissions. Because of the favored treatment granted to public utilities and common carriers, the reasonableness of their rates and the quality and adequacy of their performance are regularly evaluated by officials and reviewed by the public through comments and testimony.

State of Ohio v. Google

The complaint filed by Yost outlines critical aspects of the operation of Google Search, Google’s Internet search engine, which, it argues, intentionally favors Google affiliates and clients to the detriment of Google’s competitors. It contends that the search function’s prioritization of Google’s content, its preferential treatment of Google’s affiliates and clients, and its incorporation of algorithms whose performance automatically improves with increased usage thereby preventing effective competition.

It criticizes Google Search’s method of displaying search results, which, the complaint indicates, gives priority listing to Google-related links and results in “captured-click searches,” i.e., searches where a user clicks only on links leading to a Google product or page.

The state confines its complaint and proposed remedies to Ohio, explaining that Google Search can provide results on the basis of a user’s location. It emphasizes the dominance of Google Search among Internet search engines in Ohio: Google Search produced more than 88% of all Internet searches conducted in that state in 2020 and in 2021 so far, and Google Search is used by a large majority of Ohio residents. The complaint concludes that Google Search is a matter of public concern, has substantial market power, and is monopolistic.

Request for Declaratory Judgment and Injunction

Specifically, Ohio asks the court to rule that in operating Google Search in Ohio, Google must permanently refrain from unfairly discriminating in favor of Google’s own content compared to content from other sources.

The state seeks a permanent injunction to prohibit Google from favoring the placement of its products, services, and websites on its results page from Google searches in Ohio without providing equal opportunities for prioritization to non-Google entities. The state also asks that the court permanently enjoin Google Search from including pages that promote captured-click searches in its results for searches conducted in Ohio without providing access to similar features to non-Google entities.     

Other Public Utility/Common Carrier Rationales

Ohio is not alone in its view that Google Search, and potentially other Big Tech companies, should be regulated as public utilities and/or common carriers. While concerns about anticompetitive and monopolistic conduct underlie the Ohio litigation, other proponents of public utility status urge classifying Big Tech, and particularly social media companies, as common carriers for entirely different reasons.

These groups note that in his concurring opinion in Biden v. Knight First Amendment Institute at Columbia University, U.S. Supreme Court Justice Clarence Thomas suggested that Google and other digital platforms holding themselves out to the public resemble common carriers.

In the wake of decisions by Facebook and X Corp. to ban former President Donald Trump, and Apple and Google’s removal of Parler, a site favored by Trump supporters, from their app stores, some political conservatives promote common carrier classification as a means of preventing censorship by social media because discrimination by common carriers in providing their services is prohibited.

Other commentators, including conservatives and libertarians, find this analysis flawed. They contend, for example, that focusing on the “search” market is inappropriate when Google and other companies compete for digital advertising and that those companies’ current dominant, even monopolistic, character may be challenged and diminished by new tools and businesses.

Opposition to Public Utility/Common Carrier Characterization

Some anti-censorship advocates offer the common carrier theory as an adjunct to the repeal of Internet companies’ immunity, their “Section 230” protection, for most content provided by third parties. (Section 230 of the Communications Decency Act both protects Internet providers from being considered a publisher that could be held liable for illegal posts--and also gives them the power to regulate content that could be considered obscene, violent, or objectionable.)

Other commentators, including conservatives, contend that competitors to these giants are emerging and that market competition is preferable to regulation.

At the present time, the public utility or common carrier approach to restricting Big Tech appears far less threatening to the Internet giants’ business practices and structures than legislative initiatives based on antitrust principles. The dismissal of two antitrust suits brought against Meta by the FTC and more than 40 states have placed heightened emphasis on legislative efforts to enact antitrust rules to rein in Big Tech.

Principal Threat to Big Tech: Antitrust

The bipartisan support for antitrust measures to regulate online giants, even when arising from different motivations, presents the most immediate challenge to Big Tech. The growing consensus that Big Tech’s power threatens institutions and requires external regulation constitutes a serious crisis for the giants of the Internet.

The Bottom Line

Big tech companies have been able to control large portions of specific markets: Google with Internet search and Amazon for online shopping, for example. Regulators seek to limit the power of these companies as they find them to be monopolistic.

While many legislators seek new antitrust laws against these companies, others are exploring new avenues, such as making some companies public utilities. What the outcome will be is yet to be determined.