- As Google is hit with a landmark antitrust lawsuit, the people who truly control Google are nowhere to be found.
- Despite owning controlling shares of the company, Sergey Brin and Larry Page have disappeared from public view, leaving Sundar Pichai to go to war with Washington.
- It’s allowed the founders to avoid many of the headaches that have come as a result of their company’s size. But as Google’s past actions are investigated, the duo may be dragged back into the limelight.
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The last time we saw Google’s cofounders Larry Page and Sergey Brin address an audience together was in a company all-hands held just after the 2016 election.
In a recording of the meeting, which leaked two years later, the duo bemoaned President Trump’s win and addressed questions from concerned Googlers. A somber atmosphere hung over the room, but Brin and Page still managed to display some of their typical goofiness.
By that point, the pair had already left the daily grind of Google to CEO Sundar Pichai, and they were off spending the next few years working on “moonshot” projects under parent company Alphabet – before handing that over, too.
But don’t be fooled: Page and Brin are still the true power center of Alphabet today. That’s thanks to their Class B shares, a special stock that gives them extra voting rights. With more than 50% of the total votes between them, the buck still stops with the founders.
Even former CEO Eric Schmidt, who this week claimed he was “unfettered” when opining that the Justice Department’s lawsuit against Google was misguided, still owns 5.2% of the total voting power, according to the company’s most recent SEC filings.
That’s hardly unfettered, even if Schmidt has officially bowed out from the company.
But it highlights a relevant point: The people who truly control Google are no longer in view. Instead, it is the soft-spoken Sundar Pichai who is left to lead the charge as the company goes to war with Washington.
The pragmatic CEO may be the perfect person to do so, but there’s no doubt that he inherited a tricky hand.
Meanwhile Brin and Page, who described their current relationship to Alphabet as one of “proud parents,” have effectively vanished from view just as their company braces itself for a years-long antitrust battle.
“They certainly saw this coming,” said Shane Greenstein, an economist and Harvard Business School professor who studied the cofounders.
It was public knowledge that the Justice Department had been working on an investigation for over a year, but the larger antitrust sentiment by regulators has been brewing for much longer. Google had already been subjected to an investigation by the FTC into search bias in 2013, but the case was closed without action.
The Justice Department case, filed this week, focuses narrowly on the moves Google has made to become a leader in search, particularly its contract with Apple to remain the iPhone’s de facto search engine.
It paves the way for potentially years of legal fighting ahead, and possibly other cases to come.
“Things that are functionally useful for a firm when they’re young can be quite acceptable so long as the firm lacks market power,” said Greenstein. “Those same things, like exclusive contracts, can be problematic once the firm has solidified market power and has been in that position for a long time.”
But it’s not just an antitrust headache that the founders have left for Pichai, who is steering a company through what could become a midlife crisis. He’s inherited a company with a larger and more vocal employee base, increasing accusations of censorship, and a long list of expensive passion projects.
Pichai was also left to handle a shareholder lawsuit alleging that the board had mishandled sexual misconduct by Google executives.
Under Page’s watch, the company reportedly paid former Android boss Andy Rubin a $90 million exit package, despite finding sexual misconduct claims against him to be credible. A settlement was reached last month.
The founders still have a financial interest and may be dragged into the fight, like it or not
Pichai still regularly consults with Page and Brin, but it is unclear how involved the founders will be in the coming fight.
It’s certainly a battle that both would prefer to avoid, Page in particular. When neither Page nor Pichai showed at a congressional hearing on election interference in 2018, senators left an empty chair by way of trying to shame the company. Since then, Pichai has seen to be largely cooperative.
Many colleagues have described Pichai as a much more diplomatic leader than Page, and his appointment to the top of Google and Alphabet was perhaps, in part, because Page knew this, too.
“Larry was the type who never wanted to go to an event where he had to talk to a politician or CEO,” said one former executive who worked with the founders.
During a call with reporters this week, a DOJ official refused to say whether Larry Page had been contacted as part of the investigation. A Google spokesperson refused to comment further.
But in the months ahead, he might not have a choice. The government’s discovery process, which could take many months, will request that Google provide documentation. It may also depose certain company executives.
“It’s hard to believe that Sergey Brin or Larry Page don’t possess information that could lead to admissible relevant evidence here,” said Joel Mitnick, a former FTC trial lawyer and partner in Cadwalader’s Antitrust Group.
“I would be surprised if they did not bring in the cofounders for deposition. I know that they’ve not been as active in recent years, but they certainly may have relevant testimony about the evolution of Google’s strategy, and the genesis of the current contractual relationships that they have.”
It may not come to that. The two parties could reach a settlement, but experts say that any settlement will need to fundamentally address the core concerns of the lawsuit.
It’s another thing for Pichai to mull over in the coming months, and another thing on his long list of problems to fix.