Google CEO Sundar Pichai has insisted in the past that the company runs fairly. The lawsuit has not yet been filed
The Department of Justice on Tuesday filed an anti-trust lawsuit against Google, claiming it unlawfully maintains a monopoly to preserve its position as the ‘gatekeeper to the internet’.
The complaint – filed by the DoJ and 11 Republican State Attorney Generals – alleges that Google dominates the market unfairly by making billions in ad revenue then using the money to cement its presence on smartphones and devices, shutting out others by making ‘exclusionary’ deals with the likes of Apple, Samsung, LG and others, to ensure it’s the only search engine promoted anywhere, prosecutors say.
The 11 states that have signed on are Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas.
The government says Google makes it impossible for any competing search engines to have a sizable share of the market because a) advertisers go only to Google to advertise and b) that gives Google an unfair advantage in dominating the search engine market by paying billions to have itself installed on devices as a default search engine.
They say Google spends billions in partnerships with Apple, LG, Motorola, Samsung, AT&T, T-Mobile, Verizon, Mozilla, Opera and UCWeb to ‘secure default status for its general search engine and in many cases, specifically prohibit Google’s counterparties from dealing with competitors’.
The lawsuit is the result of a 16-month investigation by the Justice Department which began with AG Bill Barr vowing to take on big tech when he took office last year.
In an announcement on Tuesday morning, Attorney General Bill Barr said: ‘Today, millions of Americans rely on the Internet and online platforms for their daily lives. Competition in this industry is vitally important, which is why today’s challenge against Google — the gatekeeper of the Internet — for violating antitrust laws is a monumental case both for the Department of Justice and for the American people.
‘Since my confirmation, I have prioritized the Department’s review of online market-leading platforms to ensure that our technology industries remain competitive.
‘This lawsuit strikes at the heart of Google’s grip over the internet for millions of American consumers, advertisers, small businesses and entrepreneurs beholden to an unlawful monopolist.’
Google, in response, called the lawsuit ‘deeply flawed’ but would not give further comment.
The lawsuit contains graphs and charts chronicling how Google has grown its market dominance over the last 10 years, shutting out competitors by boosting its ad revenues
In 2020, Google dominated 94% of the mobile search engine market across the US – no other competitor comes close
Central to the government’s complaint is that Google makes its money through ads, dominating the space on its search engine with shopping ads and text ads, which companies pay a premium for to appear first in search results
According to the government’s complaint, Google then takes the billions it makes in ads and enters into ‘exclusionary’ agreements with other tech companies to ensure it is the only search engine that is installed or encouraged on their devices. It promotes more ads for them and keeps the cycle going
‘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. We will have a full statement this morning,’ the company said in a statement.
On a call with reporters on Tuesday morning, Deputy Attorney General Jeffrey Rosen said Google had had some ‘early success’ that ‘no one begrudges’ but that they’d grown into a ‘monopolist’ and advertising ‘behemoth’.
Google met with the DoJ before the lawsuit was filed but officials would not discuss whether or not they’d had settlement talks.
‘For years, there have been broad bipartisan concerns about business practices in our online economy.
‘Google is the gatekeeper to the internet and a search advertising behemoth…it has maintained its monopoly power through exclusionary uses,’ he said.
The 64-page complaint begins: ‘Two decades ago, Google became the darling of Silicon Valley as a scrappy startup with an innovative way to search the emerging internet.
‘That Google is long gone. The Google of today is a monopoly gatekeeper for the internet, and one of the wealthiest companies on the in planet, with a market value of $1 trillion and annual revenue exceeding $160 billion.
‘For many years, Google has used anticompetitive tactics to maintain and extend its monopolies in the markets for general search services, search advertising, and general search text advertising—the cornerstones of its empire.’
Shares of Alphabet, Google’s parent company, were up by more than 1 percent after the announcement. Analysts were quick to predict that breaking it up could extract more value from the company. It comes amid growing questions and concerns in the government over the power of big tech.
Rosen insisted on Tuesday that the lawsuit was not politically driven.
‘There is non-partisan, bipartisan, across the board interest.
‘I want to make sure there’s no confusion… there are people and concerns that are very separate from the antitrust issues we’re talking about today.
‘The antitrust case is very separate from the questions of social media about skew or bias that have been the subject or at least for us, section 230, that’s a totally separate set of concerns dealt with by different people in the department,’ he told reporters.
The news boosted shares of Alphabet, Google’s parent company, as analysts predicted breaking the company up would bring value out of it
Facebook has come under similar scrutiny in recent years for running a monopoly on how people communicate, through Facebook, Instagram or WhatsApp – all of which Mark Zuckerberg owns.
Deputy AG Jeffrey A. Rosen on Tuesday told reporters Google had ‘unlawfully maintained a monopoly’
Facebook, Twitter and Google – all notoriously run by left-leaning businessmen and predominantly out of California – have also been accused of using their power to exert political bias over the billions of people who use them.
Google has long been accused or favoring left-wing media in Google News. Its CEO, Sundar Pichai, has claimed repeatedly that an algorithm determines what is shown and nothing else.
Last week, Facebook and Twitter were accused of election interference by blocking an unflattering article about Joe Biden and his dealings with Ukraine.
Facebook claimed it wanted its fact checkers to vet the story, without explanation, and Twitter said it violated privacy laws.
The lawsuit is the result of a years-long investigation into Google.
Not only does it occupy the search engine space but Alphabet, its parent company, also owns YouTube, which has dominated online video platforms for years.