The U.S. Justice Department filed a civil antitrust lawsuit against Google, alleging the internet giant has locked up a virtual monopoly on search and search advertising to the detriment of consumers and competitors.
The federal suit, filed Tuesday in the U.S. District Court for the District of Columbia, alleges Google violated the Sherman Act with its search monopoly. The DOJ is seeking to stop Google from engaging in anticompetitive behavior that has resulted in “harmful effects,” and asks the court to “enter structural relief as needed to cure any anticompetitive harm” along with other potential remedies. On a press call Tuesday, Justice Department officials declined to detail what “structural relief” could mean in this case.
Joining the DOJ’s lawsuit against Google were 11 Republican state attorneys general, from Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas. (Read the government’s 64-page complaint against Google at this link.)
It’s the most significant antitrust action the DOJ has taken against a tech company since the agency sued Microsoft in the late 1990s, seeking to separate the Internet Explorer browser from Windows (a case that was resolved in a settlement between the government and Microsoft). If history is a guide, the DOJ-Google litigation will be tied up in court deliberations for years.
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In a blog post, Google SVP of global affairs and chief legal officer Kent Walker called the DOJ lawsuit “deeply flawed” and asserted that the remedies it proposes wouldn’t do anything to help consumers.
“We’re confident that a court will conclude that this suit doesn’t square with either the facts or the law,” Walker wrote. “People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives.” He continued, “This 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.”
In 2019, Google’s search revenue totaled $98.1 billion, up 15% from the year prior.
Attorney General William Barr, in a statement about the suit, said in part, “Over the course of the last 16 months, the Antitrust Division collected convincing evidence that Google no longer competes only on the merits but instead uses its monopoly power — and billions in monopoly profits — to lock up key pathways to search on mobile phones, browsers, and next-generation devices, depriving rivals of distribution and scale. The end result is that no one can feasibly challenge Google’s dominance in search and search advertising.”
Google’s monopoly harms “users, advertisers, and small businesses in the form of fewer choices, reduced quality (including on metrics like privacy), higher advertising prices, and less innovation,” Barr stated.
Barr said the antitrust complaint is “separate and distinct from concerns raised about content moderation and political censorship by online platforms.” Separately from the Justice Department’s Antitrust Division lawsuit, last month Barr sent draft legislation to Congress that would limit protections under Section 230 of the Communications Decency Act, which currently shield internet companies from legal liability for content posted on their platforms.
According to the DOJ lawsuit, Google owns or controls search channels accounting for about 80% of queries in the U.S. The Justice Department alleges that Google’s competitors are unable to compete against the internet giant, leaving consumers with fewer choices and affording advertisers with less competitive prices. In addition, the DOJ alleges that Google’s agreements with smartphone manufacturers that use the Android operating system to preload Google search functions represent anticompetitive conduct.
The Justice Department specifically cited Google’s long-term agreements with Apple that require Google to be the default and “de facto exclusive” search engine on Apple’s Safari browser and other Apple search tools.
Google’s Walker countered that just as a cereal brand might pay a supermarket to give its products preferential shelf placement, Google and other companies negotiate similar kinds of deals. “Our agreements with Apple and other device makers and carriers are no different from the agreements that many other companies have traditionally used to distribute software,” Walker wrote. “Other search engines, including Microsoft’s Bing, compete with us for these agreements. And our agreements have passed repeated antitrust reviews.”
The DOJ’s antitrust lawsuit against Google emerged from the DOJ’s probe into large tech companies, announced in July 2019, which was looking into “whether and how market-leading online platforms have achieved market power.”
On Tuesday, Deputy Attorney General Jeffrey Rosen told reporters that the DOJ is continuing to investigate other big tech firms over potential antitrust violations.
The DOJ’s lawsuit comes after the House Judiciary Committee earlier this month issued a report summing up an antitrust probe into four Big Tech companies: Apple, Amazon, Facebook and Google. The 449-page report urged Congress to enact new laws to curb the companies’ power, including laws that would further empower regulators to crack down on anticompetitive behavior as well as impose “structural separations” on tech giants to prohibit dominant platforms from entering adjacent lines of business.
Meanwhile, the European Union has taken aggressive action against Google in recent years, issuing fines of more than $9 billion in cases since 2017. The EU fined Google $2.6 billion in 2017 for favoring its own shopping business in search; $4.9 billion in 2018 for blocking rivals on its Android operating system; and $1.7 billion in 2019 for preventing websites from using competing services to find advertisers.