US launches landmark antitrust complaint against Google
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The US Justice Department has initiated legal proceedings against Google, alleging that the company has abused its market dominance in online search and advertising.
The case has been filed in federal court in Washington DC. It alleges that the trillion-dollar search giant uses billions of dollars raised from advertisers to pay Apple, Samsung, and other phone manufacturers to ensure that Google is the default search engine on their devices. This prevents rival search engines from scaling up and competing with Google, the complaint said.
Google accounts for 90 per cent of all general search engine queries in the US, and almost 95 per cent of searches on mobile.
Attorney General Bill Barr said that Google does not compete on the quality of its search results, but bought its success through these payments to phone manufacturers: “The end result is no one can feasibly challenge Google’s dominance in search and search advertising.”
According to Justice Department investigators, an internal Google analysis of restrictive agreements estimated that just 1 per cent of Google’s Android search revenue was up for grabs to competitors.
“Absent a court order, Google will continue executing its anticompetitive strategy, crippling the competitive process, reducing consumer choices, and stifling innovation,” the filing says.
Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina, and Texas will join the legal action; all these states have Republican Attorneys General.
“Google is the gateway to the internet and a search advertising behemoth,” said Deputy Attorney General Jeff Rosen, speaking to reporters. “It has maintained its monopoly power through exclusionary practices that are harmful to competition.”
Rosen said that antitrust cases in the tech industry must move briskly in order to prevent damaging “the next wave of innovation”.
It remains to be seen whether the Justice Department will seek major changes to Google’s corporate structure, potentially breaking up one of the world’s largest and most omnipresent companies. The filing’s request for relief said that it was seeking “structural relief as needed to cure any anti-competitive harm”.
Ryan Shores, Associate Deputy Attorney General, commented: “Nothing is off the table, but a question of remedies is best addressed by the court after it’s had a chance to hear all the evidence.”
A serious outcome such as the forced sale of part of Google’s business would take years to resolve, likely involving drawn-out legal disputes
EU regulators have imposed multibillion-euro fines and demanded changes in Google’s practices in recent years (€2.4bn in 2017 for promoting its own shopping service in search, €4.3bn in 2018 for blocking rivals on Android OS, and €1.5bn in 2019 from preventing websites from using its rivals to find advertisers). However, critics have argued that this action has been insufficient and that serious structural changes are necessary to level the playing field in search and online advertising.
Google tweeted: “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.”
Given previous arguments made by Google and its representatives, Google is expected to defend itself by arguing it faces sufficient competition, has improved people’s lives through innovation, and that it has not forced consumers to use its services or prevented them from using competitors services; rather that people use Google services because they enjoy them.
This marks the most significant antitrust action by the US government since its landmark case against Microsoft 20 years ago, which found that Microsoft had monopolised the PC market by preventing manufacturers and users from uninstalling its software. The accusations made against Google closely echo those made against Microsoft.
The action could open the gateway to other antitrust cases, given brewing investigations over the allegedly anticompetitive behaviour of Facebook, Apple and Amazon by other US authorities. In July, the CEOs of Google, Facebook, Apple, and Amazon were forced to defend their companies’ behaviour during a historic congressional antitrust hearing.
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