Justice Department files antitrust complaint against Google, alleging monopoly power

Attorneys general from 11 states join the government in a lawsuit over Google's dominance of online search and advertising

Loading the player...
Posted October 20, 2020 at 12:47pm

The Department of Justice and eleven states filed an antitrust lawsuit against Google on Tuesday accusing the company of unlawfully using anticompetitive tactics to preserve its dominance in online search and advertising.

The suit, filed in the U.S. District Court for the District of Columbia, alleges that Google, a subsidiary of Alphabet Inc., maintains monopoly power in both internet search and advertising through a network of contracts requiring its products to be the default -- and sometimes undeletable -- online search features on millions of mobile devices in the United States.

It is the first major federal antitrust case against a technology giant since the department sued Microsoft in 1998, and the first to emerge amid recently heightened scrutiny of the technology sector by lawmakers and antitrust regulators. If the government is successful, the case could have far-reaching implications for an industry that enjoyed largely unchecked growth for two decades.

“Google achieved some success in its early years and no one begrudges that,” Deputy Attorney General Jeffrey A. Rosen told reporters on a conference call. “But it has maintained its monopoly power through its exclusionary practices that are harmful to competition.”

“If the government does not enforce the antitrust laws, we could lose the next wave of innovation,” Rosen said. “If that happens, Americans may never get to see the next Google.”

In a brief statement, Google said the lawsuit is “deeply flawed.”

“People use Google because they choose to, not because they're forced to or because they can't find alternatives,” the company said on Twitter.

The suit focuses in part on the company’s agreement with Apple, which makes Google the default search engine on Apple’s Safari browser, as well as agreements that require it to be the default browser on phones running the Android operating system, which Google itself built.

“Between these exclusionary contracts and Google’s own properties, like its Chrome browser, Google owns or controls search distribution channels accounting for about 80 percent of search queries in the United States,” said Associate Deputy Attorney General Ryan Shores, the department’s senior advisor for technology industries.

“Ultimately it is consumers and advertisers that suffer from less choice, less innovation, and less competitive advertising prices,” Shores said.

At the very least, the suit would seek to break Google’s grip on the online search market, Shores said, although the government could seek additional enforcement measures.

“Nothing is off the table,” he said.

[Ahead of antitrust hearing, tech CEOs defend their companies]

Republicans on board

The department is joined in its suit by the state attorneys general of Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas, all of whom are Republicans. The partisan nature of the suit had raised questions about its integrity, given that the investigation began with a coalition involving AGs from both parties.

But New York Attorney General Letitia James, a Democrat who helped form that coalition, said in a joint statement with a bipartisan group of other state attorneys general that coordination with DOJ is ongoing and aspects of a separate investigation of Google would conclude “in the coming weeks."

“We appreciate the strong bipartisan cooperation among the states and the good working relationship with the DOJ on these serious issues,” James said. “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.”

Rosen dismissed questions about possible disagreements among the various parties.

“We’ve had numerous conversations with other states and they have indicated that they share the concerns we have,” he said. "I don’t take the fact that sometimes people want to do other things [...] as non-support.”

Rosen also said the timing of the suit is unrelated to the Nov. 3 presidential election and President Donald Trump’s frequent criticisms of Google and other technology giants.

“This case has nothing to do with that,” he said. “It’s been a matter of bipartisan, nonpartisan, across-the-board interest.”

Much of how the case plays out will depend heavily on whether Trump defeats former Vice President Joe Biden, the Democratic presidential nominee, in the upcoming election. Biden has called for greater antitrust scrutiny of the technology industry but it remains unclear how his Justice Department would proceed with the Google case.

The Justice Department’s case emerged from a review of market power wielded by online platforms that began in July of 2019, which Rosen said is ongoing.

Google is far from the only large technology company currently in the antitrust hot seat. Facebook and Amazon are also the subjects of investigations by federal or state antitrust enforcers, and all three companies plus Apple were the targets of a 16-month investigation by the House Judiciary Committee.

A report released by Democrats on that committee concluded that all four companies exercise monopoly power in their unique markets, including Google in online search and advertising. The report urged Congress to pass new antitrust laws and force the companies to separate parts of their business and limit the markets in which they can simultaneously do business.

Rep. David Cicilline, D-R.I., the chairman of Judiciary’s antitrust subcommittee, said in a statement that the Justice Department's suit against Google is “long overdue” and urged the department to expand the scope of its case to other parts of Google’s business empire.

“It is critical that the Justice Department’s lawsuit focuses on Google’s monopolization of search and search advertising, while also targeting the anticompetitive business practices Google is using to leverage this monopoly into other areas, such as maps, browsers, video, and voice assistants,” Cicilline said.

The announcement also won praise from Google’s Republican critics, including Sen. Josh Hawley of Missouri, who sued the company when he was attorney general there and called the department's suit “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,” Hawley said. “And Google in particular has gathered and maintained that power through illegal means.”