Google Faces Landmark Monopoly Lawsuit in US, Says Argument is ‘Deeply Flawed’
Google is facing a landmark lawsuit filed by the U.S. Department of Justice, which is claiming the tech giant holds an illegal monopoly over search and search advertising.
In the complaint filed in D.C. federal court, the DOJ’s Antitrust Division focuses on how Google has allegedly abused market power to protect its 90 percent share of internet search.
“Two decades ago, Google became the darling of Silicon Valley as a scrappy startup with an innovative way to search the emerging internet,” states the complaint. “That Google is long gone. The Google of today is a monopoly gatekeeper for the internet, and one of the wealthiest companies on the planet, with a market value of $1 trillion and annual revenue exceeding $160 billion. For many years, Google has used anticompetitive tactics to maintain and extend its monopolies in the markets for general search services, search advertising, and general search text advertising—the cornerstones of its empire.”
The suit, which was filed Tuesday, is joined by 11 states and accuses Google, a unit of Alphabet, violating antitrust laws. Deputy attorney general Jeffrey Rosen, who led the years-long investigation, said that Google “has maintained its monopoly power through exclusionary practices that are harmful to competition.” The suit says these practices include exclusive business contracts and agreements.
The case revolves around some of Google’s antitrust weak spots: the exclusive, billion-dollar agreements that require mobile-phone manufacturers to keep Google as their default search engine, as well as Google’s decision to preload Google search on Android phones. The European Union fined Google $5.1 billion over similar allegations two years ago.
The Justice Department is seeking structural relief, which could mean divestitures, plus injunctive relief against Google continuing to engage in alleged anticompetitive practices.
Google fired back with a blog post penned by chief legal officer Kent Walker, arguing that the lawsuit is “deeply flawed” and would only hurt the average person who uses the company’s services.
“This lawsuit would do nothing to help consumers,” the post reads. “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 argues that people use Google’s search engine because “they choose to.” Americans have demonstrated the ability to download new apps and seek out other search engines, Walker argues in the blog post.
Further, Walker says that the lawsuit falls short by failing to recognize that Google competes with companies beyond other search engines.
“It claims that we compete only with other general search engines,” Walker writes. “But that’s demonstrably wrong. People find information in lots of ways: They look for news on Twitter, flights on Kayak and Expedia, restaurants on OpenTable, recommendations on Instagram and Pinterest. And when searching to buy something, around 60 percent of Americans start on Amazon.”