DOJ slammed Google with a landmark antitrust case, Too Big

Business Insider – by Isobel Asher Hamilton and Aaron Holmes

The US Department of Justice filed an antitrust lawsuit against Google on Tuesday morning, kicking off the largest legal challenge the tech giant has ever faced.

The case argues that Google uses a network of illegal, exclusionary business deals that disadvantage smaller competitors, building an unfair advantage in search and online advertising. Eleven states joined the Justice Department in its lawsuit.

“Google is a monopoly under traditional antitrust principles and must be stopped,” Associate Deputy Attorney General Ryan Shores said at a press conference Tuesday morning. “We are asking the court to break Google’s grip on search.”

Google is unlikely to back down from the legal fight, which could stretch out in court for years. If the government wins, Google could be forced to restructure or separate parts of its business. If Google wins, the case could set a precedent shielding several tech giants from legal scrutiny — but lawmakers could still aim to regulate or break up tech companies through new laws.

The antitrust suit will be led by the appointees of whoever wins this year’s US presidential election. The lawsuit does not ask for specific remedies, which would be decided later by the courts. Prosecutors said they would ask courts to stop what they described as Google’s anticompetitive behavior and added that “additional relief” might be necessary to undo harms caused.

“Nothing is off the table,” Deputy Attorney General Jeff Rosen said at Tuesday’s press conference.

Google’s senior vice president of global affairs, Kent Walker, responded with a statement calling the lawsuit “deeply flawed,” arguing that people intentionally chose to use Google’s search engine rather than one from its competitors.

“This lawsuit would do nothing to help consumers. To the contrary, it would artificially prop up lower-quality search alternatives, raise phone prices, and make it harder for people to get the search services they want to use,” Walker said.

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The lawsuit focuses on claims Google choked out competitors, building on precedent set in a 1998 antitrust suit against Microsoft

The lawsuit takes the rare step of invoking the Sherman Act, an antitrust law passed in 1890 granting the government power to break up monopolies. The most recent high-profile government case that invoked the Sherman Act was a 1998 antitrust lawsuit brought against Microsoft, which settled with the government and agreed to restructure its business.

“It’s not an everyday occurrence,” Rosen said. “It’s a very significant thing for the department to do.”

Critics of antitrust action against tech giants have argued that the Sherman Act is a weak legal basis for such a lawsuit because it defines monopolies in terms of consumer harm, typically interpreted as an unfair increase in cost — but Google doesn’t charge consumers for most of its popular products. The DOJ argues, however, that Google’s conduct has had other negative impacts on consumers, such as reducing the quality of search services.

In online search, Google controls more than 88% of the market, according to the results of the DOJ’s investigation. Its market share is even greater among smartphone users — 94% of web searches on mobile devices are made through Google. At the same time, Google’s share of the search ads market is 70%, DOJ officials said.

In addition to its dominance in search and online advertising, the DOJ lawsuit argues that Google unfairly pays smartphone manufacturers to place its apps front and center by preinstalling them on handsets, which it pays for using revenue from its advertising platform.

DOJ officials waved away concerns that the lawsuit is politically motivated

The heavily anticipated lawsuit comes as President Donald Trump has pushed his administration to crack down on big tech companies, which he perceives as biased against him. Attorney General William Barr is said to have pushed prosecutors to file the lawsuit before Election Day, on November 3, despite concerns from some prosecutors that the case required a longer investigation, according to The New York Times.

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Rosen, however, emphasized that the antitrust lawsuit against Google was unrelated to Trump’s criticisms of Section 230, a law that shields tech companies from lawsuits over content users post on their sites.

Google is also the subject of an investigation by 50 state attorneys general, which was officially announced in September last year. Eleven of those states — Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina, and Texas — joined the Justice Department’s lawsuit filed Tuesday. All of those states have Republican attorneys general, but Rosen denied that their decision to join the lawsuit had partisan motivations, implying that Democratic attorneys general also supported the suit.

“People might want to do their own thing on timing and approach,” Rosen said. “That’s fine, I don’t take that as non-support.”

Indeed, both Democratic and Republican lawmakers are calling for tech giants to be more heavily regulated. Last month, House Democrats published a report following a yearlong investigation that concluded Google, Apple, Facebook, and Amazon had monopoly power on part with “oil barons and railroad tycoons” of past centuries.

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