Google suit ze­ros in on search dom­i­nance

U.S. Jus­tice Depart­ment nar­rows fo­cus in or­der to file case by end of month

The Standard (St. Catharines) - - BUSINESS - CECILIA KANG, KATIE BEN­NER, STEVE LOHR AND DAISUKE WAKABAYASH­I

WASH­ING­TON—THE U.S. Depart­ment of Jus­tice’s im­pend­ing law­suit against Google has nar­rowed to fo­cus on the com­pany’s power over in­ter­net search, a de­ci­sion that could set off a cas­cade of sep­a­rate law­suits from states in en­su­ing weeks over the Sil­i­con Val­ley gi­ant’s dom­i­nance in other busi­ness seg­ments.

In pre­sen­ta­tions to state at­tor­neys gen­eral that be­gan Wed­nes­day, the depart­ment is ex­pected to out­line its le­gal case cen­tred on how Google uses its dom­i­nant search en­gine to harm ri­vals and con­sumers, said four peo­ple with knowl­edge of the plan, who spoke on the con­di­tion of anonymity be­cause de­tails were con­fi­den­tial. Meet­ing with the state at­tor­neys gen­eral is one of the fi­nal steps be­fore the DOJ files its suit against Google, they said.

The Jus­tice Depart­ment’s ac­tion against Google is set to be nar­rower than what some states and sev­eral ca­reer lawyers in the depart­ment had en­vi­sioned. The DOJ also in­ves­ti­gated Google’s reach in ad tech­nol­ogy and how the com­pany prices and places ads across the in­ter­net. But in an ef­fort to file a case by the end of September, the agency de­cided to pick the piece that was fur­thest along in le­gal the­ory and that it felt could best with­stand a po­ten­tial chal­lenge in court.

The depart­ment has not writ­ten the fi­nal draft of its com­plaint against Google and the doc­u­ment is ex­pected to change over the next few days to re­flect in­ter­nal de­lib­er­a­tions and in­put from con­stituents like the state at­tor­neys gen­eral. Su­ing Google would ful­fil a push by At­tor­ney Gen­eral Wil­liam Barr to take ac­tion against a tech gi­ant around the end of September, an ef­fort that has taken on greater ur­gency ahead of the Nov. 3 elec­tion as U.S. Pres­i­dent Don­ald Trump fights for a sec­ond term.

The Jus­tice Depart­ment and 48 states agreed to open their in­ves­ti­ga­tions into Google’s dom­i­nance a year ago as a bi­par­ti­san ef­fort, but the last­minute jostling about what is in­cluded in the cases and how they should play out has ex­posed po­lit­i­cal fault lines. The depart­ment is seek­ing sup­port of the search case and is set to file a law­suit even with­out bi­par­ti­san sup­port from state at­tor­neys gen­eral, two peo­ple with knowl­edge of the plan said.

On Wed­nes­day, Repub­li­can state at­tor­neys gen­eral will also at­tend a meet­ing with Trump and Barr over con­cerns of cen­sor­ship by so­cial me­dia com­pa­nies, ac­cord­ing to two peo­ple with knowl­edge of the plan.

If Barr brings the case by the end of this month, he will over­ride lawyers who worked on the in­ves­ti­ga­tion and who said they needed more time to bring what they con­sid­ered to be a strong law­suit.

Trump has sup­ported ef­forts to re­strain the power of Ama­zon, Ap­ple, Face­book and Google. Last sum­mer, the Jus­tice Depart­ment and Fed­eral Trade Com­mis­sion opened an­titrust in­ves­ti­ga­tions into the four tech com­pa­nies. The in­ves­ti­ga­tions were but­tressed by state in­ves­ti­ga­tions and a sep­a­rate House in­quiry into al­leged monopoly abuses by the four giants.

The Jus­tice Depart­ment and Google de­clined to com­ment.

The depart­ment’s com­plaint could come next week and is ex­pected to start a mul­ti­pronged bat­tle against Google, which is owned by Al­pha­bet.

While de­tails are still be­ing com­pleted, the DOJ’S case on search is ex­pected to fo­cus on Google’s agree­ments with other com­pa­nies like Ap­ple, which set its search en­gine as the de­fault op­tion for users on iphones and other de­vices. Those agree­ments give Google’s search en­gine an ad­van­tage over other ri­vals.

The com­plaint is ex­pected to be fol­lowed by other an­titrust ac­tions against Google by the end of the year, ac­cord­ing to peo­ple with knowl­edge of the plans by the DOJ and states.

Sep­a­rately, an in­ves­ti­ga­tion by state at­tor­neys gen­eral of Google’s be­hav­iour in dig­i­tal ad­ver­tis­ing — the source of vir­tu­ally all of Al­pha­bet’s $34 bil­lion (U.S.) in an­nual profit — is nearly com­plete.

That in­ves­ti­ga­tion, led by Ken Pax­ton, the Repub­li­can at­tor­ney gen­eral of Texas, is ex­pected to re­sult in a suit ac­cus­ing Google of us­ing tac­tics that have un­der­mined com­pe­ti­tion in the mar­ket for on­line ad­ver­tis­ing, a per­son briefed on the in­quiry said.

That suit, the per­son said, should be ready to be filed soon, with the Jus­tice Depart­ment po­ten­tially join­ing as a plain­tiff but with Texas tak­ing the lead.

There is also the po­ten­tial for an ad­di­tional, broader suit by the states, led by Phil Weiser, the Demo­cratic at­tor­ney gen­eral of Colorado. It would in­clude more wide-rang­ing allegation­s of Google us­ing its dom­i­nance of the search mar­ket to favour its shop­ping and other ser­vices, the per­son said.

That in­ves­ti­ga­tion is still in progress and a case, if filed, would come later than the other two, the per­son said. Weiser’s of­fice de­clined to com­ment.

Google con­trols about 90 per cent of web searches glob­ally, and ri­vals have com­plained that it ex­tended that power by mak­ing its search and brows­ing tools the de­faults on many smart­phones. Google also cap­tures about one-third of ev­ery dol­lar spent on on­line ad­ver­tis­ing and its ad tools are used to sup­ply and auc­tion ads that ap­pear across the in­ter­net.

AL DRAGO THE NEW YORK TIMES FILE PHOTO

A sep­a­rate in­ves­ti­ga­tion by state at­tor­neys gen­eral of Google’s be­hav­iour in dig­i­tal ad­ver­tis­ing is nearly com­plete. The probe was led by at­tor­ney gen­eral of Texas, Ken Pax­ton, right, seen with the at­tor­ney gen­eral of the District of Columbia, Karl Racine, dur­ing a news con­fer­ence on Sept. 9.

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