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The Justice Department filed an antitrust lawsuit against Google on Tuesday, alleging that the tech giant has used its dominance in the search business to become a “monopoly gatekeeper” of the Internet.
The Justice Department alleges that Google, which is a division of Alphabet, paid billions of dollars to Apple and other mobile phone manufacturers, as well as web browser companies, for those companies to keep Google as their search engine. predetermined.
Those payments and similar settlements have allowed Google to maintain a lock on the web search market, which has long been the foundation of its business, according to the antitrust suit.
In one of the alleged fixes outlined in the lawsuit, Google requires device makers to preload not just its search app, but five other apps, including Chrome, Google Play, Google Maps, and YouTube. What’s more, manufacturers are required to pre-install apps “in a way that prevents the consumer from removing them,” according to the government case.
“For years, Google has entered into delisting agreements, including binding agreements, and has engaged in anti-competitive conduct to block distribution channels and block rivals,” the Justice Department said in its antitrust complaint. “Two decades ago, Google became the darling of Silicon Valley as a startup with an innovative way of searching the emerging Internet. That Google no longer exists.”
“It’s a very good case,” according to antitrust expert Eleanor Fox, a professor at New York University School of Law. “If the Justice Department can prove the facts that it has in the complaint, it should be able to prove that Google has been anti-competitive and it should be banned.”
Although Fox also pointed out that the Supreme Court has made it very difficult for the government to win most of the antitrust cases.
The case was brought in federal court in Washington, DC Eleven states, all with Republican attorneys general, also joined the United States’ case against Google.
Google called the lawsuit “deeply flawed” and in a lengthy statement said the lawsuit “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.”
Dan Ives, a top Wall Street analyst who follows Google and other tech giants for Wedbush Securities, said the case against Google shows that Google and other tech giants are clearly in antitrust crosshairs.
“A possible blue wave in November increases the risk of a breakout going forward for [Google and other tech] giants in our opinion, “said Ives.” Right now, tech stocks are ignoring all the bad news, including this lawsuit from the Justice Department today, as investors are taking a wait-and-see approach to fears of big tech breakouts. “
Shares of Alphabet, Google’s parent company, rose $ 40, or 2.5%, to $ 1,570 on Tuesday, despite news of the government case.
A search giant
Google has long dominated the online search space, accounting for more than three-quarters of online searches, and often much more.
According to the Justice Department, Google takes 90% of all search queries in the United States and 95% on mobile devices, and the company has “used anti-competitive tactics” to defend and extend its monopoly. Google’s conduct has hurt consumers by reducing search quality by limiting potential competition, according to the government. Some academic studies have found that consumers prefer Google searches that do not exclude competing content, such as consumer reviews posted on non-Google websites.
The lawsuit also alleges that Google, which makes most of its money serving ads on the Internet, has harmed its corporate clients by using its dominant position “in a way that allows it to charge advertisers more than it could charge advertisers. in a competitive market. “
The lawsuit marks the government’s most significant effort to protect competition since its groundbreaking case against Microsoft more than 20 years ago. It could be an opening salvo before other major government antitrust actions, given ongoing investigations by major tech companies – including Apple, Amazon and Facebook – at both the Justice Department and the Federal Trade Commission.
The House antitrust subcommittee released a sweep report Earlier this month, it was recommended that federal laws be revised to ease the pursuit of the Big Four tech companies, as well as potentially restructuring those companies or dividing them into their component divisions.
The Justice Department will not immediately seek to separate Google, but could eventually attempt to force a change in the way Alphabet operates, which could eventually include the division of Google’s various businesses.
The Mountain View, California-based company has long denied allegations of unfair competition. Google maintains that although its businesses are large, they are useful and beneficial to consumers. It maintains that its services face wide 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 you sell your ads. Google insists it has no special powers that force people to use its free services or prevent them from going elsewhere.
An anti-technology administration
The Trump administration has Google has long had its sights. A top economic adviser to President Donald Trump said two years ago that the White House was considering whether Google searches should be subject to government regulation. President Trump has often criticized Google, recycling unsubstantiated claims by conservatives that the search giant is biased against conservatives and suppresses their views on searches, interferes with US elections, and prefers to work with the Chinese military. instead of the Pentagon.
However, Justice Department officials in a call with reporters on Tuesday repeatedly insisted that the government’s case against Google was not politically motivated. They also said the timing of the case was not related to the presidential elections, which are two weeks away.
“This case has nothing to do with the president,” said Assistant Attorney General Jeffrey Rosen. “These are competitive positions, in which there has been bipartisan interest across the board.”
Rosen said the case is not related to concerns that Google and other social media platforms have a liberal bias. “There is a concern that social media and some other technologies have a bias or bias,” Rosen said. “Those are very separate from the questions in this case.”
Letitia James, the New York attorney general, who did not join the government’s antitrust lawsuit, said her state and others were continuing to investigate what she called anti-competitive practices by Google. James said in a statement Tuesday that his investigation was wrapping up and that if New York or another state brought a case, he would seek to consolidate the case with the government’s action filed Tuesday.
“This is a historic moment for federal and state antitrust authorities as we work to protect competition and innovation in our technology markets,” James said in his statement.
Irina Ivanova of CBS News and Associated Press contributed reporting.
