Google hit with antitrust lawsuit
Justice Dept. accuses tech titan of illegally protecting monopoly
WASHINGTON — The Justice Department accused Google of illegally protecting its monopoly over search and search advertising in a lawsuit filed Tuesday, the government’s most significant legal challenge to a tech company’s market power in a generation.
In a 57-page complaint, filed in the U.S. District Court in the District of Columbia, the agency accused Google of locking out competition by obtaining several exclusive business contracts and agreements. Google’s deals with Apple, mobile carriers and other handset makers to place its search engine as the default option for consumers accounted for most of its dominant market share in search, the agency said, a figure that it put at around 80%.
“For many years,” the lawsuit said, “Google has used anticompetitive tactics to maintain and extend its monopolies in the markets for general search services, search advertising and general search text advertising — the cornerstones of its empire.”
The lawsuit reflects the pushback against the power of the nation’s largest corporations, and especially technology giants like Google, Amazon, Facebook and Apple. Conservatives like President Donald Trump and liberals like Massachusetts Sen. Elizabeth Warren have been critical of the concentration of power in a handful of tech behemoths.
Attorney General William Barr, who was appointed by Trump, has played an active role in the investigation. He pushed career Justice Department attorneys to bring 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.
The lawsuit may stretch on for years and could 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 bring separate complaints against the company’s grip on technology for online advertising. Eleven state attorneys generals, all Republicans, signed on to support the federal lawsuit.
A victory for the government could remake one of America’s most recognizable companies and the internet economy that it has helped define since it was founded by two Stanford University graduate students in 1998. The Justice Department will not immediately put forward remedies, such as selling off parts of the company, in the lawsuit, the officials said.
Such actions are typically pursued in later stages of a case.
Ryan Shores, an associate deputy attorney general, said “nothing is off the table” in terms of remedies.
Google has long denied accusations of antitrust violations, and the company is expected to fight the government’s efforts by using its global network of lawyers, economists and lobbyists. Its parent company, Alphabet, valued at more than $1 trillion and with cash reserves of $120 billion, has fought similar antitrust lawsuits in Europe. The company spent $12.7 million lobbying in the United States in 2019, making it one of the top corporate spenders in Washington.
The company says it has strong competition in the search market, with more people finding information on sites like Amazon. It says its services have been a boon for small businesses.
“Today’s lawsuit by the Department of Justice is deeply flawed,” Kent Walker, the company’s chief legal officer, said in a blog post. “People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives.”
Walker said the lawsuit would do “nothing to help consumers. To the contrary, it would artificially prop up lower-quality search alternatives, raise phone prices and make it harder for people to get the search services they want to use.”
Democratic lawmakers
on the House Judiciary Committee released a report on the tech giants two weeks ago, also accusing Google of controlling a monopoly over online search and the ads that come up when users enter a query.
“A significant number of entities — spanning major public corporations, small businesses and entrepreneurs — depend on Google for traffic, and no alternate search engine serves as a substitute,” the report said.
The lawmakers also accused Apple, Amazon and Facebook of abusing their market power. They called for more aggressive enforcement of antitrust laws, and for Congress to consider strengthening them.
The scrutiny reflects how Google has become a dominant player in communications, commerce and media over the last two decades. That business is lucrative: Last year, Google brought in $34.3 billion in search revenue in the United States, according to the research firm eMarketer. That figure is expected to grow to $42.5 billion by 2022, the firm said.
In its complaint, the Justice Department said that Google’s actions had hurt consumers by stifling innovation, reducing choice and diminishing the quality of search services, including consumer data privacy. It also said that advertisers that use its products “must pay a toll to Google’s search advertising and general search text advertising mo
nopolies.”
The lawsuit is the result of an investigation that has stretched for more than a year. Prosecutors have spoken with Google’s rivals in technology and media, collecting information and documents that could be used to build a case.
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, giving the government its best chance to win. To prevail, the Justice Department has to show two things: that Google is dominant in search, and that its deals with Apple and other companies hobble competition in the search market.
Gene Kimmelman, a former senior antitrust official at the agency, said the case focused on how Google’s lock on search allowed it to “control a treasure trove of user data and deny access to competitors.”
He said the focus on contracts was significant because some were made when Microsoft’s Bing and Yahoo posed a competitive threat to Google’s search.