US Department of Justice along with 11 States Files Lawsuit Against Google’s Search Monopoly
Posted on 10/20/2020
The U.S. Department of Justice (DOJ) filed a lawsuit against Google in what could be the largest antitrust case against a tech company in more than two decades. The DOJ contends that Google has stifled competition in order to maintain its powerful position in online search and search advertising. Recently, the U.S. House of Representatives released a report on tech companies anti-competitive and possible anti-trust behaviors. Eleven states — Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas — joined the suit, according to the complaint.
“Today’s lawsuit by the Department of Justice is deeply flawed,” Google Senior Vice President Global Affairs and Chief Legal Officer Kent Walker wrote in a blog post. “People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives.”
According to the DOJ release, “As alleged in the Complaint, Google has entered into a series of exclusionary agreements that collectively lock up the primary avenues through which users access search engines, and thus the internet, by requiring that Google be set as the preset default general search engine on billions of mobile devices and computers worldwide and, in many cases, prohibiting preinstallation of a competitor. In particular, the Complaint alleges that Google has unlawfully maintained monopolies in search and search advertising by:
Entering into exclusivity agreements that forbid preinstallation of any competing search service.
Entering into tying and other arrangements that force preinstallation of its search applications in prime locations on mobile devices and make them undeletable, regardless of consumer preference.
Entering into long-term agreements with Apple that require Google to be the default – and de facto exclusive – general search engine on Apple’s popular Safari browser and other Apple search tools.
Generally using monopoly profits to buy preferential treatment for its search engine on devices, web browsers, and other search access points, creating a continuous and self-reinforcing cycle of monopolization.
These and other anticompetitive practices harm competition and consumers, reducing the ability of innovative new companies to develop, compete, and discipline Google’s behavior.”
The DOJ lawsuit has potential to be a major deal. Since the late 1970s, antitrust enforcement has declined dramatically in America. The U.S. government made historic antitrust actions against AT&T in 1974 and Microsoft in 1998 by enforcing the Sherman Act to restore the role of competition.
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Attorney General William P. Barr released the following statement:
“This morning the Department of Justice, along with eleven states, filed a civil lawsuit against Google for unlawfully maintaining a monopoly in general search services and search advertising in violation of the U.S. antitrust laws. This is a monumental case for the Department of Justice and, more importantly, for the American consumer.
Today, millions of Americans rely on the Internet and online platforms for their daily lives. For years, there have been broad, bipartisan concerns about business practices leading to massive concentrations of economic power in our digital economy. Hearing those concerns, I have made it a primary commitment of my tenure as Attorney General for the Department of Justice to examine whether technology markets have been deprived of free, fair, and open competition.
To that end, the Department of Justice formally opened a review of online market-leading platforms in July 2019. One part of this review is the Antitrust Division’s investigation of Google. Over the course of the last 16 months, the Antitrust Division collected convincing evidence that Google no longer competes only on the merits but instead uses its monopoly power – and billions in monopoly profits – to lock up key pathways to search on mobile phones, browsers, and next generation devices, depriving rivals of distribution and scale. The end result is that no one can feasibly challenge Google’s dominance in search and search advertising.
This lack of competition harms users, advertisers, and small businesses in the form of fewer choices, reduced quality (including on metrics like privacy), higher advertising prices, and less innovation.
The complaint filed today against Google is based on violations of the U.S. antitrust laws and is separate and distinct from concerns raised about content moderation and political censorship by online platforms. As part of the Department’s broader review of market-leading online platforms, we listened to myriad public concerns about how online platforms fail their users. While many of the concerns we heard were competition-related, others were not – like online child exploitation, public safety, and censorship. Outside the Antitrust Division, the Department has considered these issues separately, including by advocating for Section 230 legislative reforms. Our antitrust investigation of Google, by contrast, is based solely on traditional antitrust principles and is aimed at promoting consumer welfare through robust competition.
Twenty-five years ago, the Department of Justice sued Microsoft, paving the way for a new wave of innovative tech companies – including Google. The increased competition following the Microsoft case enabled Google to grow from a small start-up to an Internet behemoth. Unfortunately, once Google itself gained dominance, it resorted to the same anticompetitive playbook. If we let Google continue its anticompetitive ways, we will lose the next wave of innovators and Americans may never get to benefit from the “next Google.” The time has come to restore competition to this vital industry.
Today’s challenge against Google – the monopoly gatekeeper of the Internet – shows the tremendous efforts of the Department, in particular the hardworking men and women of the Antitrust Division, and our state partners to restore competition in markets beholden to an unlawful monopolist. This is an important milestone, but not the end of our review of market-leading online platforms. The Department will continue to vigorously investigate and enforce the antitrust laws where appropriate to protect and promote competition in the digital economy for the benefit of the American consumer.”
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Keywords: Alphabet.