[ad_1]
(CNN Business) – The Trump administration sued Google on Tuesday in what constitutes the largest antitrust case against a technology company in more than two decades.
In its lawsuit, the Department of Justice (DOJ) makes overwhelming allegations that Google has stifled competition to maintain its powerful position in the market for online search and search-based advertising.
Eleven states – Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas – joined the lawsuit, according to the document.
The complaint centers on a series of intertwined actions by Google that, taken together, allegedly hurt competition and prevented rivals from gaining a meaningful audience.
Details of the Justice Department complaint
The complaint alleges in part that Google pays billions of dollars a year to device makers such as Apple, LG, Motorola and Samsung and browser developers such as Mozilla and Opera to be its default search engine. And, in many cases, to prohibit them from dealing with Google’s competitors. As a result, “Google effectively owns or controls the search distribution channels that account for approximately 80% of overall search queries in the United States.”
DOJ officials did not rule out a dissolution of Google in a call with reporters Tuesday.
“There is nothing out of the question,” said Deputy Attorney General Jeffrey Rosen, warning that if the DOJ did not file a lawsuit now, “we could miss the next wave of innovation.” He also said that “Americans may never see the next Google.”
Google responds to demand
“The lawsuit filed by the Justice Department today is flawed,” wrote Kent Walker, Google’s senior vice president of global affairs and chief legal officer, in a blog post. “People use Google because they want to, not because they are forced to or because they cannot find alternatives,” he argued.
The publication states that the complaint “is based on dubious antitrust arguments” that “would not help consumers at all.”
“Rather, it would artificially prop up lower-quality search alternatives, drive up phone prices, and make it harder for people to get the search services they want to use,” Walker wrote.
Google said its practice of paying to be the default search engine on smartphones like Apple’s “is no different” from other companies’ actions to promote their products. “In the same way that a cereal brand could pay a supermarket to store its products at the end of a row or on a shelf at eye level,” he explained.
The lawsuit comes after questions from Congress
Rosen said the Google lawsuit represents a “milestone.” However, he asserted that it is not the end of DOJ’s broad review of the tech industry. And he said other lawsuits could be filed “when necessary.”
The landmark federal lawsuit follows a year-long antitrust investigation by the DOJ. And it comes just before an election in which tech platforms have come under scrutiny for their impact on democracy and small businesses. It also comes on the heels of a major congressional report that Google and other tech giants enjoy “monopoly power.” And that they have exercised their dominance in an anti-competitive manner. That report alleges that Amazon has mistreated sellers and that Apple’s app store fees and policies are anti-competitive. Also that Facebook has sought to eliminate future rivals through specific acquisitions.
State investigations
Dozens of states have been conducting a separate antitrust investigation on Google over the past year. On Tuesday, several of them said they intend to close that investigation “in the coming weeks.” And that if they file a lawsuit, it could merge with the federal case.
“We appreciate the strong bipartisan cooperation between the states and the good working relationship with DOJ on these serious issues,” the multi-state group said. The group includes Colorado, Iowa, Nebraska, North Carolina, Tennessee, and Utah. “This is a historic moment for federal and state antitrust authorities as we work to protect competition and innovation in our technology markets,” he added.
The DOJ’s lawsuit against Google marks the most important step the US government has taken to hold Silicon Valley to account after Washington took a dramatic turn against the tech industry. This, after evidence that the main social media platforms were manipulated by foreign interference efforts in the 2016 elections. Since then, the top executives of the main technology platforms have been repeatedly brought before Congress. There they have faced questions about their responsibilities in relation to political discourse; hateful content and misinformation; small businesses and local journalism; and competition.
Risk to the tech giant’s business
The looming case could pose an unprecedented risk to Google’s broader advertising business, which generated $ 134.8 billion in revenue last year. This represents 84% of Google’s total business.
Even as the Justice Department is taking Google to court over antitrust concerns, others in the tech industry could face lawsuits of a similar magnitude. Officials at the Federal Trade Commission have been investigating Facebook for more than a year, and that investigation could culminate in their own landmark litigation.
Google’s lawsuit also symbolizes mounting criticism, particularly from former Democratic presidential candidates – including Senators Elizabeth Warren and Amy Klobuchar – against historic levels of economic inequality and business concentration in the United States.
Antecedent: ‘United States vs. Microsof ‘
“The biggest tech industry monopolization case before this was’ America vs. Microsoft ‘in 1998,’ William Kovacic, former chairman of the Federal Trade Commission, told CNN Business before the lawsuit was announced. During that case, the Government alleged that Microsoft violated the law by including its browser, Internet Explorer, with every copy of Windows, to the detriment of competition among browser developers. After several years of litigation, Microsoft and the government reached an agreement that imposed new limits on Microsoft’s software business.
Experts have since credited that case with paving the way for new innovations, including the rise of Google.
Kovacic said that, as before, the government faces years of litigation ahead and a challenging path to victory. “None of this will be easy,” he said. “You can climb to the top, but it is a difficult climb,” he said.
Barr and Trump’s involvement
Attorney General William Barr has taken a personal interest in the investigation and the resulting lawsuit, reported The New York Times.
After the head of the DOJ’s antitrust division, Makan Delrahim, recused himself for having previously represented Google in his private practice, Barr assigned senior staff in his own office to oversee the investigation. According to reports, he had pushed for an aggressive deadline for filing the lawsuit. Back in March of this year, Barr told the Wall street journal that he hoped to bring the investigation to fruition “early in the summer.”
President Donald Trump, who has been vocal in his criticism of technology platforms, will also be on the case.
Trump has repeatedly criticized Facebook, Google and Twitter for allegedly systematically censoring conservative views. This is a claim that the companies deny and for which the experts have found no evidence. Last year, Trump told Fox Business: “We should sue Google and Facebook and all that, what we might do, okay?”
Trump’s comments could complicate any lawsuit against tech companies. By nature and longstanding custom, presidents are expected to steer clear of addressing government investigations and potential lawsuits. The aim is to avoid even the perception of a politically motivated litigation.
Google ‘is not a neutral gateway’
Critics of Google have complained that its search business promotes Google’s own applications and services to users while degrading those of its rivals.
“Google search is not a neutral gateway to information available on the web,” David Dinielli, a senior adviser to the Omidyar Network and a former DOJ antitrust official, told CNN Business before the lawsuit was announced. “Google search is a set of algorithms designed to make Google, or Alphabet, its parent company, make as much money as possible,” he added.
Google has also faced antitrust scrutiny and numerous multi-million dollar fines from European regulators – punishments the company has protested against.
CNN’s Evan Pérez contributed reporting.
