Justice Department charges Google with illegally maintaining search monopoly
By Chris Mills Rodrigo - 10/20/20 10:45 AM EDT
The Department of Justice (DOJ) on Tuesday charged Google with illegally maintaining a monopoly on search and search advertising, teeing off a legal battle likely to take years and send shockwaves across Silicon Valley.
The lawsuit, filed in District of Columbia federal court, is the result of a yearlong investigation into concentrations of economic power in the online economy.
The DOJ argues that Google has entered into exclusionary contracts with phone makers to preload its search engine onto devices using Alphabet’s Android operating system.
Those contracts have allowed Google to maintain a monopoly while stifling competition and innovation, the suit contends. It also accuses Google of using profits from that monopoly to buy preferential treatment for its search engine on web browsers, including Safari.
Estimates of Google’s control of the market for online searches range from 80 up to 90 percent, resulting in tens of billions in annual revenue.
The Federal Trade Commission investigated whether Google had abused its search market power nearly a decade ago, but the five-person commission voted not to bring a case in 2013.
Eleven Republican state attorneys general joined the case filed Tuesday. Other attorneys general may choose to join the case later or bring their own challenges to Google’s position.
The attorneys general of New York, Colorado, Iowa, Nebraska, North Carolina, Tennessee and Utah said shortly after the case was filed that a bipartisan investigation into Google will continue.
“We appreciate the strong bipartisan cooperation among the states and the good working relationship with the DOJ on these serious issues,” they said in a statement. “We plan to conclude parts of our investigation of Google in the coming weeks. If we decide to file a complaint, we would file a motion to consolidate our case with the DOJ’s.”
Deputy Attorney General Jeffrey Rosen led the case, although, according to multiple reports, Attorney General William Barr was very involved in the investigation and pushed for it to be released before the upcoming election.
The DOJ calls for the court to decree that Google acted unlawfully to maintain its search monopolies in violation of Section 2 of the Sherman Act and enter “structural relief as needed.”
“Nothing is off the table, but the question of remedies is best answered by the court after it's had a chance to hear all the evidence regarding our clients,” Ryan Shores, associate deputy attorney general, told reporters.
Google called the lawsuit "deeply flawed" in its initial response to the case.
“People use Google because they choose to -- not because they're forced to or because they can't find alternatives,” a spokesperson said in a statement.
The lack of bipartisan sign-off and timing of the lawsuit close to the election have raised flags for many observers.
Alex Harman, competition policy advocate at Public Citizen, called the suit “nothing more than a thinly veiled political stunt.”
“The Trump DOJ’s narrow focus and alienation of the bipartisan state attorneys general is evidence of an unserious approach driven by politics and is likely to result in nothing more than a choreographed slap on the wrist for Google,” he said. “This will be a missed opportunity to bring about a structural reckoning with one of the most powerful and wealthy companies in the world so that Trump and Barr can score political points.”
The lawsuit comes two weeks after Democratic lawmakers on the House Judiciary Committee released a lengthy report on competition in digital markets that accused Google of controlling a monopoly over online search and the ads that come up during search.
“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.
Rep. David Cicilline (D-R.I.), the chair of the committee's antitrust panel, called the suit “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 added.
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