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Justice Department Suing Google For Antitrust Violations

Topline

The U.S. Department of Justice filed a lawsuit against Google Tuesday for alleged antitrust violations, after the agency spent more than a year investigating the tech giant as part of a broader governmental effort to scrutinize big tech companies’ allegedly anticompetitive practices.

Key Facts

The lawsuit alleges that Google uses “an unlawful web of exclusionary and interlocking business agreements that shut out competitors,” according to the Wall Street Journal.

Google allegedly hurts competitors through arrangements that make its search platform the default platform on most U.S. devices—including on iPhones and Android, where it’s impossible to delete Google’s search application from the device—the lawsuit reportedly alleges.

The lawsuit will be the biggest antitrust lawsuit brought by the U.S. government against a major tech company since Microsoft was sued for alleged antitrust violations in 1998.

11 states joined the lawsuit, all of which have Republican attorneys general: Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas.

Chief Critic

Google has previously defended itself against allegations of its anticompetitive practices, with Alphabet CEO Sundar Pichai saying in his opening testimony to House lawmakers in July that the company “operates in highly competitive and dynamic global markets” and citing travel or real estate-related platforms and businesses like Amazon as competitors for specific search queries. “We see vigorous competition,” Pichai told House Antitrust Subcommittee chair Rep. David Cicilline (D-.R.I.) during the hearing. “We are working hard, focused on the users, to innovate.”

Key Background

The Google antitrust suit is one of a series of antitrust investigations aimed at Silicon Valley’s biggest players, as the DOJ, state attorneys general, Federal Trade Commission and Congress have all taken steps to scrutinize Google, Facebook, Amazon and Apple’s allegedly anticompetitive practices. House lawmakers released the findings of their antitrust investigation earlier this month, finding that Google and other tech giants had “monopoly power” and recommending that Congress consider breaking the companies up. The DOJ Google lawsuit comes after the FTC had previously investigated Google for possible antitrust violations in 2013, which ultimately resulted in a victory for Google, and three antitrust investigations by the European Union that have resulted in more than $9.7 billion in fines. Despite the bipartisan support in Washington for antitrust action against big tech, however, the DOJ’s lawsuit is reportedly not without internal controversy, as reports suggested in August and September that career DOJ lawyers believed that the department should be taking more time to build an airtight case against the company, and U.S. Attorney General William Barr was rushing to file the lawsuit ahead of the election over their objections. The New York Times notes that Barr has played an “unusually active role” in the Google investigation.

What To Watch For

The Google lawsuit could set off a broader wave of governmental actions against big tech as the probes against other Silicon Valley companies continue, potentially foreshadowing further lawsuits aimed at Facebook, Amazon or Apple. The DOJ lawsuit also may be the first of several investigations Google will face: states that did not join the DOJ suit are likely to continue with their own investigations and could join the federal suit or file their own lawsuits later, according to multiple reports, and the Journal reports that Google’s advertising business is also facing continued investigations and possible lawsuits by the DOJ and state attorneys general. The Journal notes that the DOJ lawsuit is likely to take several years to ultimately get resolved, and may soon be overseen by an attorney general appointed by Joe Biden rather than Barr, should Biden win the November election.

Further Reading

Justice Department to File Long-Awaited Antitrust Suit Against Google (Wall Street Journal)

U.S. to Accuse Google of Protecting Illegal Monopoly (New York Times)

Long-Awaited House Report Says Congress Should Consider Breaking Up Big Tech (Forbes)

Source: Forbes – Business

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