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WASHINGTON: The United States sued Google accusing the company of allegedly abusing its dominance in online search and advertising and using its market muscle to hobble rivals.
The Justice Department lawsuit could lead to the break-up of an iconic company that has become all but synonymous with the internet and assumed a central role in the lives of billions of people around the globe. The outcome is far from assured but the case is likely to take years to resolve.
The lawsuit marks the first time the US has cracked down on a major tech company since it sued Microsoft for anti-competitive practices in 1998. Other major tech companies including Apple, Amazon and Facebook are under investigation by both the Justice Department and the Federal Trade Commission.
The federal government’s complaint alleging that Google acted unlawfully to maintain its position in search and search advertising on the internet was joined by eleven states. The US government said Google has nearly 90% of all general search engine queries in the United States and almost 95% of searches on mobile.
Attorney General Bill Barr said his investigators had found Google does not compete on the quality of its search results but instead bought its success through payments to mobile phone makers and others. “The end result is that no one can feasibly challenge Google’s dominance in search and search advertising,” he said.
In its complaint, the Justice Department said that Americans were hurt by Google’s actions. In its “request for relief,” it said it was seeking “structural relief as needed to cure any anti-competitive harm.” Structural relief in antitrust matters generally means the sale of an asset.
“Ultimately it is consumers and advertisers that suffer from less choice, less innovation and less competitive advertising prices,” the lawsuit states. “So we are asking the court to break Google’s grip on search distribution so the competition and innovation can take hold.”
Google called the lawsuit “deeply flawed,” adding that people “use Google because they choose to – not because they’re forced to or because they can’t find alternatives.”
The complaint pointed to the billions of dollars that Google pays to smartphone makers such as Apple, Samsung and others to make Google’s search engine the default on their devices. This means that rival search engines never get the scale they need to improve their algorithms and grow, the complaint said.
Google has been successful at protecting its profit derived from the Android mobile operating system, which is officially open source but companies that change it are barred from lucrative revenue-sharing agreements.
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Justice Department investigators found an internal Google analysis of restrictive agreements determined that just 1% of Google’s worldwide Android search revenue was at risk of being lost to competitors. “This analysis noted that the growth in Google’s search advertising revenue from Android distribution was ‘driven by increased platform protection efforts and agreements,’” the complaint found.
More lawsuits could be in the offing since probes by state attorneys general into Google’s broader businesses are underway, as well as an investigation of its broader digital advertising businesses. Attorneys general led by Texas are expected to file a separate lawsuit focused on digital advertising as soon as November, while a group led by Colorado is contemplating a more expansive lawsuit against Google.
The lawsuit comes more than a year after the Justice Department and Federal Trade Commission began antitrust investigations into four big tech companies: Amazon, Apple, Facebook and Google. Seven years ago, the FTC settled an antitrust probe into Google over alleged bias in its search function to favor its products, among other issues.
Google has faced similar legal challenges overseas. The European Union fined Google $1.7 billion in 2019 for stopping websites from using Google’s rivals to find advertisers, $2.6 billion in 2017 for favoring its own shopping business in search, and $4.9 billion in 2018 for blocking rivals on its wireless Android operating system.
