Home US Trump administration launches antitrust salvo against Google

Trump administration launches antitrust salvo against Google

By

Leah Nylen

Dozens of states — both Republican and Democratic — have been investigating Google on a range of antitrust allegations. DOJ and the states had spent months attempting to find common ground.

The suit and the ask: DOJ’s complaint accuses Google of abusing its command of the online search market to stifle competitors. The complaint itself does not say exactly what fixes DOJ will pursue — though it mentions the possibility of “structural relief.” That would allow the Justice Department to push for the court to require Google to sell off parts of its operations, in what would be the nation’s biggest breakup of a corporate giant on antitrust grounds since AT&T was dismembered in the 1980s.

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Deputy Attorney General Jeffrey Rosen and other Justice Department officials repeatedly declined to say what remedies they might seek from the court, but Ryan Shores, a top deputy to Rosen who helmed the investigation, said that “nothing is off the table.”

Impact: The suit follows years of complaints by smaller tech companies, news publishers and other rivals in the U.S. and Europe who say the company has abused its search engine’s role as the internet’s de facto gatekeeper to unfairly benefit its other sprawling business interests. The suit could force major changes in how the search company operates — and may trigger legal rulings that shape the fate of ongoing antitrust probes into Apple, Facebook and Amazon.

Beyond that, this suit is the most concrete sign yet that Washington intends to impose real consequences on the tech industry, whose wealth and influence on society have turned Silicon Valley into a rival power center.

Just two weeks ago, House Democrats proposed an overhaul of U.S. antitrust laws that could make it easier to break up companies, writing that the tech giants “have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons.”

The DOJ view: DOJ officials pushed back on the idea that politics played a part in timing of the suit so close to Election Day.

“I would disagree that it is rushed. The matter has been investigated for more than a year now,” Rosen said, noting that some critics have said the agency hasn’t moved fast enough to challenge Google.

The Google complaint is also separate from concerns expressed by President Donald Trump and others about conservative censorship by tech platforms, he said.

“This case has nothing to do with with that subject. This is an antitrust case about competitive conditions in the marketplace,” Rosen said. Content moderation questions “are very separate from the antitrust issues we’re talking about today.”

In a statement, Barr also emphasized that questions about the law that shields tech companies from legal liability over how they treat user content, known as Section 230, didn’t play a part in the Google suit.

The case “is based solely on traditional antitrust principles and is aimed at promoting consumer welfare through robust competition,” he said. “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 breakaways: In a statement, the remaining states — led by Democratic AGs in Colorado, Iowa and North Carolina — said they are continuing their investigation and hope to finish in “the coming weeks” and would seek to file alongside the DOJ’s lawsuit, meaning it could be coordinated by the court.

Rosen said the Justice Department had “numerous conversations” with state attorneys general and “they share concerns that we have” about Google.

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“Sometimes [the states] want to do their own things in terms of what their approach or tactics or timing” are, he said on a call with reporters. “I don’t take that as non-support, I think it’s the other way.”

The background: The company, founded in 1998 with the motto “Don’t be evil,” takes its name from the googol — the math term for an unfathomably large number, 1 followed by 100 zeros.

Google’s role in technology, business and people’s everyday lives is just as vast. For more than two decades, its search engine has been the main way people find things on the internet. It also controls the world’s most popular web browser (Chrome), video streaming site (YouTube) and smartphone operating system (Android), while claiming the lion’s share of the revenue from the $ 162 billion global online ad market.

Its moves into other services and products — including mapping and navigation, music, movies, streaming television, games, smart speakers, home thermostats and health — have raised privacy concerns about the hordes of data it’s swooping up. Google has also found itself in disputes with a chorus of business rivals, from fellow tech giants like Apple and Oracle to smaller players such as the review websites Yelp and Tripadvisor.

These concerns helped lead DOJ to open an antitrust probe last year into Google’s activities. Google has also been the subject of antitrust investigations around the world — most prominently in Europe, where authorities have fined the company a total of about $ 9 billion in three separate cases. The U.S. Federal Trade Commission closed an earlier antitrust investigation into Google in 2013 without taking action after the tech company agreed to change some of its policies.

Reactions: Google issued a brief statement, calling the DOJ’s complaint “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.

Rep. David Cicilline, chair of House Judiciary’s antitrust subcommittee, called the Google suit “long overdue.”

“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,” he said.

Sen. Mike Lee, the top Republican on the Senate Judiciary’s antitrust panel, said the suit was an “encouraging sign,” but urged the DOJ to do more.

“Our recent hearing on Google’s advertising business revealed its anticompetitive conduct may not be limited to search,” he said. “I hope the Department will follow the evidence to end monopolistic behavior wherever it finds it.”

A long pursuit: Under Attorney General Bill Barr, a former Verizon lawyer who played a key role in that company’s antitrust skirmishes, DOJ has made the Google investigation one of its highest priorities. It has spent the past 16 months delving into the tech giant’s control over search, mobile and the technology underlying much of the advertising that funds the open web.

The Justice Department opened its probe into Google last summer, sending its first information request to the company in August 2019.

A group of attorneys general representing more than 50 states and territories announced their own, separate investigation into the search giant’s digital ad dominance the following month. Republican Texas Attorney General Ken Paxton — whose office has a large unit devoted to antitrust — is leading that effort and has spent money to hire experts to help with the probe.

Meanwhile, Colorado Attorney General Philip Weiser — a Democrat and an Obama-era DOJ antitrust official — took the lead for the states on search issues, bringing on his own team of lawyers to help with a probe.

Why it’s taken so long: Barr and the Justice Department had hoped to file a suit this summer, but disagreements with the states over the scope and timing of a suit delayed any final decisions on the case until now.

But this suit has still come together quickly compared with past probes of Google.

The Justice Department’s sister agency, the Federal Trade Commission, and a group of five states previously investigated Google over allegations of search bias. The FTC’s 19-month probe ended in January 2013 with the agency’s five commissioner’s opting against a case. The states, which included Texas, California, New York and Ohio, later closed their probes in 2014.

Google backers tend to portray the FTC’s decision not to bring an antitrust suit as an exoneration of the company. But in fact, the agency’s antitrust lawyers had proposed that the FTC file a suit focused on three aspects of Google’s behavior, concluding that the company’s conduct had harmed the market for search and search advertising, according to a staff report that the regulator inadvertently released to The Wall Street Journal in 2015 as part of a public records request.

But prosecutors declined to recommend a suit on the issue of search bias, warning of a “substantial risk” that the FTC wouldn’t be able to win an antitrust suit against the search giant because of the state of U.S. law.

Two years later, the European Commission fined Google €2.42 billion (about $ 2.8 billion) for giving advantages to one of its own services, Google Shopping, in search results. The commission would issue fines against Google two more times over its practices related to online advertising and exclusive contracts related to the Android operating system. In total, Europe’s primary antitrust authority has fined Google about $ 9 billion.

More suits on the horizon: The Justice Department and state AGs of both parties are separately pursuing an investigation focused on Google’s command of the online ad-technology market. The states, led by Texas Attorney General Ken Paxton, could file an antitrust suit on that issue in the coming weeks.

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