U.S. sues Google, alleges search, ads monopoly
WASHINGTON — The Justice Department on Tuesday sued Google, accusing it of abusing its dominance in online search and advertising. It is the government’s most significant attempt to protect competition since its groundbreaking case against Microsoft more than 20 years ago.
Other major technology companies — including Apple, Amazon and Facebook — are also under investigation at the Justice Department and the Federal Trade Commission.
“Google is the gateway to the internet and a search advertising behemoth,” U.S. Deputy Attorney General Jeff Rosen told reporters. “It has maintained its monopoly power through exclusionary practices that are harmful to competition.”
Lawmakers and consumer advocates have long accused Google of abusing its dominance in online search and advertising. The case filed in federal court in Washington, D.C., alleges that Google uses billions of dollars collected from advertisers to pay phone manufacturers to ensure Google is the default search engine on browsers.
That stifles competition and innovation from smaller upstart rivals to Google and harms consumers by reducing the quality of search and limiting privacy protections and alternative search options, the government alleges.
The Justice Department also investigated Google’s behavior and acquisitions in the overall market for digital advertising, which includes search, web display and video ads.
But the search case is the most straightforward and is seen as giving the government its best chance to win. To prevail, the Justice Department has to prove two things: that Google is dominant in search, and that Google’s deals with Apple and other companies hobble competition in the search market.
Critics contend that multibillion-dollar fines and man
dated changes in Google’s practices imposed by European regulators in recent years weren’t severe enough and that structural changes are needed for Google to change its conduct. The Justice Department didn’t lay out specific remedies, although it asked the court to order structural relief “as needed to remedy any anticompetitive harm.”
That opens the door to possible fundamental changes, such as a spinoff of the company’s Chrome browser.
Google, based in Mountain View, Calif., vowed to defend itself, and Kent Walker, the company’s chief legal officer, responded immediately via tweet: “Today’s lawsuit by the Department of Justice is deeply flawed. People use Google because they choose to — not because they’re forced to or because they can’t find alternatives.”
Most of Google’s services are offered for free in exchange for personal information that helps it sell its ads.
Barring a settlement, a trial would likely begin late next year or in 2022.
The lawsuit could stretch on for years and set off a cascade of other antitrust lawsuits from state attorneys general.
About four dozen states and jurisdictions have conducted parallel investigations and are expected to file separate complaints against the company’s grip on technology for online advertising.
ARKANSAS JOINED SUIT
Arkansas and 10 other states, all with Republican attorneys general, joined the federal government in the lawsuit.
“Most Americans think it is free to ‘Google’ something, but it comes at a cost and that cost is the freedom to choose the best products from the best companies,” said Arkansas Attorney General Leslie Rutledge. “As attorney general, I am charged with the responsibility of protecting the citizens of our state, and while I want businesses to thrive, I will do everything in my power to protect consumers from deceptive and unfair practices.”
President Donald Trump’s administration has long had Google in its sights. One of Trump’s top economic advisers said two years ago that the White House was considering whether Google searches should be subject to government regulation.
Sally Hubbard, an antitrust expert who runs enforcement strategy at the Open Markets Institute, said it was a welcome surprise to see the Justice Department’s openness to the possibility of structurally breaking up Google, and not just imposing conditions on its behavior as has happened in Europe.
“Traditionally, Republicans are hesitant to speak of breakups,” she said. “Personally, I’ll be very disappointed if I see a settlement. Google has shown it won’t adhere to any behavioral conditions.”
U.S. Attorney General William Barr, who was appointed by Trump, has played an unusually active role in the investigation. He pushed career Justice Department attorneys to file the case by the end of September, prompting pushback from lawyers who wanted more time and complained of political influence. Barr has spoken publicly about the inquiry for months and set tight deadlines for the prosecutors leading the effort.
DIVERSIFIED GOLIATH
The argument for reining in Google has gathered force as the company stretched far beyond its 1998 roots as a search engine governed by the motto “Don’t Be Evil.” It’s since grown into a diversified goliath with online tentacles that scoop up personal data from billions of people via services ranging from search, video and maps to smartphone software.
That data helps feed the advertising machine that has turned Google into a behemoth.
The company owns the leading web browser in Chrome, the world’s largest smartphone operating system in Android, the top video site in YouTube and the most popular digital mapping system. Some critics have singled out YouTube and Android as among Google businesses that should be considered for divestiture.
Google, whose corporate parent Alphabet Inc. has a market value just over $1 trillion, controls about 90% of global web searches.
A recent report from a House Judiciary subcommittee concluded that Google has monopoly power in the market for search. It said the company established its position in several markets through acquisition, snapping up successful technologies that other businesses had developed — buying an estimated 260 companies in 20 years.
The Democratic congressman who led that investigation called Tuesday’s action “long overdue.”
“It is critical that the Justice Department’s lawsuit focuses on Google’s monopolization of search and search advertising, while also targeting the anticompetitive business practices Google is using to leverage this monopoly into other areas, such as maps, browsers, video and voice assistants,” Rep. David Cicilline of Rhode Island said in a statement.
The lawsuit could stretch on for years and set off a cascade of other antitrust lawsuits from state attorneys general
SIMILAR TO MICROSOFT CASE
Columbia Law professor Tim Wu called the suit almost a carbon copy of the government’s 1998 lawsuit against Microsoft that was filed under former President Bill Clinton. A federal district court judge ruled that Microsoft should be split up for having tied its internet browser to its Windows operating system — strangling competitors. But an appeals court reversed that ruling, and the Justice Department settled the case under the George W. Bush administration.
Republicans and Democrats have accelerated their criticism of big technology companies in recent months, although sometimes for different reasons. It’s unclear what the status of the government’s suit against Google would be in a Joe Biden administration.
The Justice Department sought support for its suit from states across the country that share concerns about Google’s conduct. A bipartisan coalition of 50 U.S. states and territories, led by Texas Attorney General Ken Paxton, announced a year ago that it was investigating Google’s business practices, citing “potential monopolistic behavior.”
Besides Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas joined the Justice Department lawsuit.
Information for this article was contributed by Michael Balsamo, Marcy Gordon, Michael Liedtke, Matt O’Brien and Frank Bajak of The Associated Press; by David McCabe, Cecilia Kang and Daisuke Wakabayashi of The New York Times; and by David McLaughlin of Bloomberg News.