Charges were filed in federal court on Tuesday by the US Department of Justice and 11 other states including Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina, and Texas.
Justice Department Sues Monopolist Google For Violating Antitrust Laws
Department Files Complaint Against Google to Restore Competition in Search and Search Advertising Marketshttps://t.co/JTFDO5kJ9d
— Justice Department (@TheJusticeDept) October 20, 2020
The lawsuit is the biggest brought against a major tech company since the October 1997 action to break-up Microsoft. That case was one of the biggest antitrust assaults of the century, in which the DOJ (Department of Justice) sued Microsoft, alleging the software maker required computer manufacturers to ship Microsoft’s Internet Explorer Web browser on PC’s loaded with Windows 95. After negotiations for a settlement between the government and Microsoft officials broke down, Judge Jackson, presiding, issued a final ruling calling for Microsoft to be split into two companies, one for the Windows operating system and another for its Internet and other businesses.
Today’s lawsuit alleges that Google uses a similar network of business agreements to ensure Google’s dominance to the cost of competitors. It says Google takes profits made from ads to pay other carriers and cell phone makers to keep Google as their default browser, thus ensuring it ends up as the “gatekeeper” to the internet, owning or controlling the channels responsible for 88% of the internet search queries, and 94% of mobile searches in the U.S.
The complaint continued, “Google has thus foreclosed competition for internet search. General search engine competitors are denied vital distribution, scale, and product recognition – ensuring they have no real chance to challenge Google.” It added: “Google is so dominant that ‘Google’ is not only a noun to identify the company and the Google search engine but also a verb that means to search the internet.” It noted the company established its position in several markets through acquisition – buying up successful technologies that other businesses had developed. Google has bought an estimated 260 companies in 20 years, and ultimately harms consumers by lowering the quality of search services and reducing choice, says the lawsuit.
Google began as an internet search engine governed by the motto ‘Don’t Be Evil’ in 1998. It is now a tech behemoth, worth $1.04 trillion on the stock market with an online presence that scoops up personal data from billions of people via services like search, video and maps, and smartphone software. It owns Chrome, the top web browser, Android, the number one smartphone operating system, YouTube the top video/content creator site, and the most popular digital mapping system.
The DOJ and 11 states are using Section 2 of the Sherman Act to file the lawsuit. They reference the case against Microsoft citing that the D.C. Circuit “recognized that anticompetitive agreements by a high-tech monopolist shutting off effective distribution channels for rivals, such as by requiring pre-set default status (as Google does) and making software undeletable (as Google also does), were exclusionary and unlawful under Section 2 of the Sherman Act.”
Google responded via a blog post, calling the case “deeply flawed”. They say, “people use Google because they choose to – not because they’re forced to or because they can’t find alternatives.” Antitrust specialists believe without splitting up the company, a government victory or settlement will only lead to small changes.
They say the US action follows the approach – “fine and forget” -taken by European regulators in the last ten years, whereby they have filed three different antitrust actions against Google, imposing over 8 billion euros ($9.46 billion) in fines in response to complaints over Google’s price comparison service, its Android mobile operating system, and for blocking adverts from rival search engines via its AdSense platform. Google is already appealing fines of €8.2bn ($9.5bn) ordered by the European Commission.
Christian Bergqvist, a professor of law at Denmark’s Copenhagen University, said the U.S. antitrust action was belatedly adopting this approach. He said, the problem is that years of hefty fines have had limited impact on the market dynamics in Europe, where Google’s Chrome browser has an even larger share of the market than in the United States and Android remains dominant. Moreover, an independent study from September advising Google’s European competitors said the company’s price-comparison service was still breaching the EU rules.
The most successful US antitrust lawsuits against Big Tech companies in the past was the 1984 government breakup of AT&T in 1984: which ended up restructuring the entire U.S. telecoms business and had a huge impact on consumers and businesses alike.
The problem with this kind of solution for the Google monopoly is: how do you break it up when everything is free. According to Bergqvist, “Google’s services are organized like a series of money-losing trenches that protect advertising: the company’s ‘cash cow.’ Even if a couple of those trenches were taken over by competitors or transformed into a standalone business – such as YouTube or the Chrome browser, for example – it was hard to see how they survive on their own”.
Senator Josh Hawley, (R-MO), was optimistic and pleased with the development stating that “Today’s lawsuit is the most important antitrust case in a generation. Google and its fellow Big Tech monopolists exercise unprecedented power over the lives of ordinary Americans, controlling everything from the news we read to the security of our most personal information.”
My full statement on today’s blockbuster Department of Justice antitrust suit against @Google pic.twitter.com/gV3j4ShNNr
— Josh Hawley (@HawleyMO) October 20, 2020
What is for sure is that deciding this case will not be quick or easy, and it could be the first of many in the US to combat Google’s power.
Carol King received a first-class BA (honors) in History and Politics from Stirling University, along with an exceptional commendation for a study on US public opinion and Foreign Policy. She also completed a year of study at University of London before taking up a Graduate Proctor Fellowship at Princeton University. She further completed a MPhil in American Politics at Dundee University. Aspiring to be a writer/commentator on American politics, she now writes for UncoverDC.