Google, which runs the global leading web browser in Chrome, the world’s largest smartphone operating system in Android, the top video site in YouTube and the most popular digital mapping system, is being taken to court by the US Justice Department.
The Justice Department on Tuesday sued Google for abusing its dominance in online search and advertising, which represents the US Government’s most significant attempt to protect competition since its groundbreaking case against Microsoft in 2001.
Officials at the Department of Justice accused Google of building an illegal monopoly and dominating the internet, saying it pays tens of billions of dollars to smartphone companies such as Apple and Samsung so it is used as their phones’ default search engine.
Very few people change their default search engine, which means Google stifles competition and innovation from smaller upstart rivals to Google and harms consumers by reducing the quality of search and limiting privacy protections and alternative search options, the government alleges.
The case is likely to drag on for years and could ultimately lead to multibillion dollar fines or even an order to split the business, recalling the break-up of Standard Oil by trustbusters more than a century ago, The Telegraph reported.
The Justice Department didn’t lay out specific remedies along those lines, although it asked the court to order structural relief “as needed to remedy any anticompetitive harm”.
Prosecutors claimed Google had “foreclosed competition for internet search” and that competitors are “denied vital distribution, scale, and product recognition”.
“Google is the gateway to the internet and a search advertising behemoth,” said US Deputy Attorney General Jeff Rosen, reported AP News. “It has maintained its monopoly power through exclusionary practices that are harmful to competition.”
Google is likely to be the first of many technology giants to face prosecution. Apple, Amazon, Facebook and Twitter are under investigation at the Justice Department and the Federal Trade Commission.
The US Justice Department’s action is backed by 11 states, all with Republican attorneys general.
Google responded immediately to the Justice Deportment’s action, via a tweet.
“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.”
The US Justice Department’s action is backed by 11 states, all with Republican attorneys general. A bipartisan coalition of 50 US states and territories, led by Texas Attorney General Ken Paxton, announced a year ago they were investigating Google’s business practices, citing “potential monopolistic behaviour”.
The attorneys general of New York, Colorado, Iowa, Nebraska, North Carolina, Tennessee and Utah released a statement Monday saying they have not concluded their investigation into Google and would want to consolidate their case with the DOJ’s if they decided to file. “It’s a bipartisan statement,” said spokesman Fabien Levy of the New York State attorney general’s office. “There’s things that still need to be fleshed out, basically”
Sally Hubbard, an antitrust expert who runs enforcement strategy at the Open Markets Institute, told AP News it was a welcome surprise to see the Justice Department’s openness to the possibility of structurally breaking up Google, and not just imposing conditions on its behaviour as has happened in Europe.
“Traditionally, Republicans are hesitant to speak of break-ups,” she said. “Personally, I’ll be very disappointed if I see a settlement. Google has shown it won’t adhere to any behavioural conditions.”
The argument for reining in Google has gathered force as the company stretched far beyond its 1998 roots as a search engine governed by the motto “Don’t Be Evil.” It’s since grown into a diversified goliath with online tentacles that scoop up personal data from billions of people via services ranging from search, video and maps to smartphone software. That data helps feed the advertising machine that has turned Google into a behemoth.
Google, whose corporate parent, Alphabet, has a market value of just over US$1 trillion, controls about 90% of global web searches. Barring a settlement, a trial would likely begin late next year or in 2022.
The company, based in Mountain View, California, argues that although its businesses are large, they are useful and beneficial to consumers. It maintains that its services face ample competition and have unleashed innovations that help people manage their lives. Most of Google’s services are offered for free in exchange for personal information that helps it sell its ads.
A report from a House Judiciary subcommittee concluded that Google has monopoly power in the market for search. It said the company established its position in several markets through acquisition, snapping up successful technologies that other businesses had developed — buying an estimated 260 companies in 20 years.
The Democratic congressman who led that investigation called Tuesday’s action “long overdue”.
“It is critical that the Justice Department’s lawsuit focuses on Google’s monopolisation 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,” David Cicilline said in a statement.
Three weeks ago, I released a report outlining steps Google took to maintain and expand its monopoly power through anti-competitive actions.
Today, DOJ finally brought an antitrust lawsuit against Google. This step is long overdue. It is time to restore competition online.
— David Cicilline (@davidcicilline) October 20, 2020