Every wonder how a noun becomes a verb? Why we don’t use a ‘search engine’, but rather we ‘Google’ something? No, it’s not because Larry and Sergey built a great product and are marketing whizzes. According to a new antitrust lawsuit from the US Department of Justice, it’s the result of behind the scenes use of  market power to illegally exert control over an industry.

The DOJ lawsuit is going after Google’s search function, which controls 80% of all searches in the United States. The internet giant is accused of illegally maintaining its monopoly position through exclusive contracts which lock out competition, and stifle innovation.

The contracts include:

By the numbers Google’s search strategy is wildly successful. In 2019 the company's search revenue was $34.3 billion, it is expected to grow to $42.5 billion by 2022.

Alphabet, Google’s parent company, is valued at $1.04 trillion and has $120 billion in cash.

The suit may appear, and may be partially, politically motivated, with conservatives accusing Google and other tech companies of bias, but there is support for antitrust enforcement on both sides of the aisle.  Not to mention Google has undergone a similar ordeal before, settling a 10 year investigation in 2013.

Attorney General Bill Barr, a Republican, leads the Justice Department and has been speaking of bringing a suit for over a year. He pushed for the case to be filed ahead of the election.

Senator Elizabeth Warren, a Democrat, is a long time critic of monopolopies including the ones which exist in the tech sector. She made breaking up big tech a central tenet of her presidential campaign last year.

The House Judiciary Committee, made up of Republicans and Democrats, held hearings to grill the CEOs of Facebook, Apple, Google and Amazon on their monopolistic practices this summer.

Under International Pressure
It’s not just American legislators who are needling Google. The European Union has filed three suits against the company, the UK and Australia are each investigating Google’s power in the online advertising market.

Canada started an investigation into Google’s anti-competitive practices in 2013 but dropped it in 2016.

Unlike Google search results, the outcome of this suit won’t be lightning fast. Google has assembled the best legal team in the world and is sitting on enough cash to spend freely on their defence. Ultimately, the case will likely make its way to the already business friendly Supreme Court. Expect a decade before a settlement.

In the nearer term, lookout for more lawsuits. A number of States have conducted their own investigations into Google and could bring similar state level court cases. It would also be unsurprising to see similar federal cases brought against the rest of the FAANG.

Turn and face the recognizable new faces on top of corporate Canada, as Bell Media, Laurentian Bank and Magna International have all installed new execs.

First Woman to Lead Major Canadian Bank
Laurentian Bank has tapped Rania Llewellyn to be their new CEO, making her the first woman to lead a major bank in Canada. Ms. Llewellyn will have a tough job ahead of her, after the Montreal based bank dropped its former CEO in June after a series of weak financial results and a failure to grapple with the coronavirus fallout.

Rania Llewellyn, who will need to “reinvigorate” Laurentian, spent the past 26 years of her career at the Bank of Nova Scotia where she started as a part time teller and most recently held the position of executive vice-president of global business payments.

Magna International, the world’s third largest auto parts manufacturer, has announced Seetarama (Swamy) Kotagiri will take the wheel as CEO, after the current boss Don Walker steps down after 22 years. Mr. Kotagiri has been with Magna since 1999, he’s served at the Chief Technology Officer for the past 6 years, and the President since January.

Kotagiri’s big challenge will be managing the transition to electric vehicles. He says the key is to be “agnostic” about the power source and manage to supply to all.

For Whom The Bell Tolls

Bell Media’s president, Randy Lennox, will be stepping down in the new year after five years with the company and three years heading the media division. Wayne Oosterman, the vice chair of BCE (Bell Media’s parent) will replace Lennox. Oosterman has been with Bell for 14 years in a variety of roles.

Bell Media, like many others, has been hit hard by the pandemic as advertisers cut their budgets. The division’s second quarter operating revenue dropped by 31% and it took a $452 million impairment charge.

Fresh off announcing an approval from the CRTC, Space X is launching a new collab, this time with Microsoft to bring their Azure cloud computing platform to the great beyond.

What’s in the Drop?
The companies will co-sell their services to each other’s customers. The basic offer is moving cloud computing services to space increasing the power and connectivity of the service which is in higher demand since the shift to work from home. Microsoft has also launched Azure Space which will offer “disaster prediction and tracking, increased visibility of supply chains and economic activity.”

Wish Upon a Shooting Star
The linkup adds more momentum to Space X’s Starlink satellite system, which has over 800 satellites in low orbit around the earth. The company also recently landed a contract to build missile tracking satellites for the Pentagon. Elon Musk, the Space X founder, hope revenue from Starlink will eventually fund his interplanetary travel goals.

Space Race
Jeff Bezos of Amazon won’t appreciate being shaded by his rival Musk. This deal gives Azure an advantage in the cloud wars over Amazon Web Services, but Amazon is planning a catch-up with Bezos’ Blue Origin which is proposing a network of 3,236 satellites.

Heads up to founders and execs who are people of colour or Indigienous, Caisse de Dépôt, Quebec’s public pension fund, and the second largest in Canada, is earmarking $250 million to boost diversity in Canadian businesses.

Caisse’s Criteria:

Caisse intends to invest between $5 million and $30 million into these companies, and will support investees in developing and maintaining a diversity plan. The pension plan says they’re motivated by the proven benefits diverse teams have on company performance. 

Diversity Disaster

Corporate Canada has not done well in fostering diversity among senior management and board members. A recent study found that of 799 executives and 686 board members representing 60 companies on the S&P/TSX only 6 execs and 4 board members were black.