Justice Department, 11 States File Antitrust Lawsuit Against Google

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Google

The Justice Department and the attorneys general of 11 states filed an antitrust lawsuit on Tuesday against Google, claiming that the internet giant abused its market power in search and advertising.

“Google has maintained its monopoly power through exclusionary practices that are harmful to competition,” Deputy Attorney General Jeffrey Rosen said in a call with reporters.

The 57-page lawsuit (read it here), filed in U.S. District Court in the District of Columbia, claims that Google has used its dominance in search to harm consumers, and that it has used its ad revenue to ensure that it is the default browser on mobile smart phones.

Ryan Shores senior adviser for technology at the DOJ, said that Google “collectively paid mobile phone manufacturers carriers and web browsers billions of dollars each year from its monopoly search advertising revenues to be the preset default search engine. This is by far the most effective way for a search engine to gain users as most people simply use this default.”

Shores added, “Ultimately, it is consumers and advertisers who suffer from less choice, less innovation and less competitive advertising prices. Some new models for search are emerging, but if they have any chance to challenge Google they must have an effective way to distribute their product so they can build a user base.”

The lawsuit says that “largely as a result of Google’s exclusionary agreements and anticompetitive conduct, Google in recent years has accounted for nearly 90 percent of all general-search-engine queries in the United States, and almost 95 percent of queries on mobile devices.” 

Shores said that the lawsuit is seeking to “break Google’s grip on search distribution.” 

DOJ officials were not specific in describing what type of remedies they are seeking from the court other than to end what it claims is anticompetitive conduct and to order structural changes, such as divestments, “as needed.” “Nothing is off the table,” Shores said.

In a statement, a Google spokesperson said, “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. We will have a fuller statement this morning.”

The lawsuit is not a surprise. The DOJ announced last year that it was reviewing the competitive conduct of major tech platforms.

Congress also has been investigating major internet companies, and the House Judiciary Committee released its findings earlier this month. They concluded that Google, Amazon, Apple and Facebook were showing preference for their own services at the expense of competitors and small businesses. They also called for new approaches to antitrust to reflect the shift to the online economy.

Rep. David Cicilline (D-RI), who chairs the House antitrust subcommittee, said in a statement that the lawsuit was “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,” he said.

The DOJ lawsuit will be one of the biggest challenges to tech industry dominance since the Clinton-era DOJ filed a lawsuit against Microsoft in the late 1990s.

The entertainment industry has seized on the scrutiny of tech platforms by saying it reflects the need for Google and other internet giants to be more accountable, particularly when it comes to pirated content on their sites.

While Republicans and Democrats have urged action against major tech platforms, the Google lawsuit’s filing just two weeks before the presidential election likely will be used by President Donald Trump in his continued bashing of Silicon Valley.

The 11 states that have joined the DOJ lawsuit include Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas. No Democratic attorneys general signed on to the lawsuit, but they are said to be preparing their own action against the search giant.

Google has long dominated the search market, as potential rivals like Microsoft’s Bing and Yahoo maintain just a fraction of market share. The Justice Department, however, claims that “general search engine competitors are denied vital distribution, scale, and product recognition—ensuring they have no real chance to challenge Google. Google is so dominant that ‘Google’ is not only a noun to identify the company and the Google search engine but also a verb that means to search the internet.”

The lawsuit claims that Google is following the same “playbook” that Microsoft did.

“But Google did learn one thing from Microsoft—to choose its words carefully to avoid antitrust scrutiny,” the lawsuit claims. “Referring to a notorious line from the Microsoft case, Google’s Chief Economist wrote: ‘We should be careful about what we say in both public and private. ‘Cutting off the air supply’ and similar phrases should be avoided.'”

Like the Microsoft case, the DOJ’s lawsuit invokes section 2 of the Sherman Antitrust Act of 1890, which has to do with illegal monopolies. After federal and appellate courts sided with the government in the Microsoft case, the company settled.

This article was printed from https://deadline.com/2020/10/google-antitrust-justice-department-1234600271/