Google Faces its First Antitrust Lawsuit by DOJ

Tech giant Google is being sued by the Department of Justice (DOJ) in an antitrust case over search dominance.

The agency has announced charges against Google, making it the very first antitrust lawsuit the company has faced by the federal government.

The Justice Department filed its long-expected antitrust lawsuit against Google this week and has alleged that the company has unlawfully maintained a monopoly in search by cutting off rivals from key distribution channels.

The DOJ and states are bringing the complaint under Section 2 of the Sherman Act and claim that Google has unlawfully maintained monopolies in markets for “general search services, search advertising, and general search text advertising.”

The Justice Department claims that Google has “foreclosed competition for internet search” through exclusionary agreements that deny rivals the opportunity to achieve the necessary scale to challenge its dominance.

The states in the lawsuit are as follows: Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas.

“Google is the gateway to the internet and a search advertising behemoth,” said U.S. Deputy Attorney General Jeffrey Rosen. “It has maintained its monopoly power through exclusionary practices that are harmful to competition.”

Eleven Republican state attorneys general have joined the DOJ as plaintiffs.

Google’s business practices have been investigated for over a year. The lawsuit is the most significant antitrust lawsuit since the Justice Department sued Microsoft in the 1990s.

According to the DOJ, Google holds 88% of the U.S. search market, with 94% of mobile searches occurring on its services. The department claims Google’s conduct has harmed consumers by lowering the quality of search services and reducing choice.

The agency also claims Google owns more than 70% of the search ads market and has used its monopoly power to charge more for lower-quality services than would be possible in the face of competition.

The complaint additionally says the company has used its revenue-sharing model for distributors to expand its dominance.

Google Chief Legal Officer Kent Walker stated in a blog post, “Today’s lawsuit by the Department of Justice is deeply flawed. People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives. 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 says that consumers choose to use Google’s services because they want to, since switching defaults is easy to do. He also points out that consumers use plenty of specialized search engines like Expedia for travel and OpenTable for restaurant reservations and even platforms like Twitter to seek information outside of Google’s services.

“Over the last year, both the US DOJ and state attorneys general have conducted separate but parallel investigations into Google’s anticompetitive market behavior,” attorneys general from Iowa, Nebraska, Colorado, Tennessee, New York, North Carolina, and Utah said in the statement.
“We appreciate the strong bipartisan cooperation among the states and the good working relationship with the DOJ on these serious issues. This is a historic time for both federal and state antitrust authorities, as we work to protect competition and innovation in our technology markets. We plan to conclude parts of our investigation of Google in the coming weeks. 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.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.