DOJ Antitrust Lawsuit Aims at the Heart of Google's $1 Trillion Business - 5 minutes read
After a 16-month investigation, the Department of Justice and 11 states filed an antitrust lawsuit against Google on Tuesday, arguing that the company’s search app—which is a permanent, preloaded fixture on Android phones—hurts search competition and disproportionately funnels traffic to Google’s ad business.
“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 complaint states. “The Google of today is a monopoly gatekeeper for the internet, and one of the wealthiest companies on the planet.”
The DOJ is effectively doing a rerun of its case against Microsoft from the early 2000s: big tech company uses its size to gain software exclusivity. Where once it was Internet Explorer with a target on its back, now Google’s search app on Android—and the deals Google cuts to keep it pre-installed and immutably on those phones—is at issue.
“Google pays billions of dollars each year to distributors—including popular-device manufacturers such as Apple, LG, Motorola, and Samsung; major U.S. wireless carriers such as AT&T, T-Mobile, and Verizon; and browser developers such as Mozilla, Opera, and UCWeb—to secure default status for its general search engine and, in many cases, to specifically prohibit Google’s counterparties from dealing with Google’s competitors,” the suit claims. The DOJ contends that this allegedly illegal strategy has bought Google “nearly 90 percent of all general-search-engine queries in the United States, and almost 95 percent of queries on mobile devices.”
“ 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,” a Google spokesperson told Gizmodo. “ We will have a fuller statement this morning.”
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The lawsuit, filed in the U.S. District Court in Washington, DC, has been criticized as haphazardly rushed to court to secure political gains for the Trump administration. “This case has nothing to do with that subject,” Deputy Attorney General Jeff Rosen said, on a press briefing this morning, when asked about why the suit was filed two weeks before the election.
Department of Justice officials also repeatedly deflected when asked by journalists why this was not a bipartisan effort. The 11 states that joined—Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina, and Texas—all have Republican attorneys general.
Last year, New York Attorney General Letitia James and Texas Attorney General Ken Paxton announced a parallel, wide-ranging, bipartisan antitrust investigation into Google along with 49 attorneys general. “We appreciate the strong bipartisan cooperation among the states and the good working relationship with the DOJ on these serious issues,” James and the attorneys general of Colorado, Iowa, Nebraska, North Carolina, Tennessee, and Utah said in a joint statement today:
This is a historic time for both federal and state antitrust authorities, as we work to protect competition and innovation in our technology markets. We plan to conclude parts of our investigation of Google in the coming weeks. If we decide to file a complaint, we would file a motion to consolidate our case with the DOJ’s. We would then litigate the consolidated case cooperatively, much as we did in the Microsoft case.
The DOJ’s antitrust division initiated 18 investigations into the potential abuse of monopoly power between 2010 and 2019, but only a single case was brought to court. That case was brought against United Regional Health Care System, which was accused of forming contracts that prevent health insurers from contracting with United Regional’s competitors. A settlement was quickly reached in the case preventing it from conditioning contracts on the basis of whether insurers worked with competing providers.
As the DOJ bitingly notes, back when it was Microsoft in the spotlight “Google claimed Microsoft’s practices were anticompetitive, and yet, now, Google deploys the same playbook to sustain its own monopolies.” In that case, Microsoft was tried for violating a consent decree by engaging in exclusionary practices in an effort to maintain a stranglehold on the PC operating system market. (The company was further accused of trying, unsuccessfully, to monopolize the web browser market.) In 1999, a federal judge ruled that Microsoft was a monopoly and attempted to break the company into two. An appeals court later threw out the judge’s proposal and—against the protestations of several state attorneys general—approved a settlement negotiated by DOJ. As a result, Microsoft agreed to make it easier for third-party developers to integrate their software into Windows and was held to other conditions, including independent audits, which expired in 2011.
The preloaded search app was a cornerstone of an EU antitrust case against Google, which resulted in a $5.1 billion fine in 2018. (At the time, Donald Trump accused the EU of taking “advantage” over “one of our great companies, Google.”) The European Commission leveled a $2.7 billion fine against Google for prioritizing its own shopping service in search and another $1.7 billion fine for dominating ad space on its search engine and across the web.
Interestingly, unprompted, Rosen was adamant about maintaining that this has nothing to do with recent GOP calls to dismantle Section 230 over perceived anti-conservative bias by Twitter and Facebook. “The antitrust case is very separate from the questions about social media and some other technology issues that are out there about skew or bias, which have been the subject, at least for us, with regard for Section 230 of the Communications Decency Act,” Rosen said. “That’s a totally separate set of concerns dealt with different people in the department.”
DOJ officials wouldn’t say if they engaged in settlement talks Google ahead of the filing, nor would they give specific details about what sort of resolution they were hoping to gain, though Associate Deputy Attorney General Ryan Shores stated that “nothing’s off the table.”
Updated to include a statement from Google
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