Ayyyeee… What’s Goodie Everyone. So I got some tea and it involves a lawsuit from the Justice Department and Google.
On Tuesday the Justice Department sued Google over allegations that its search and advertising empire violated federal antitrust laws, creating what is likely going to be a lengthy, bruising legal fight between Capitol Hill and Silicon Valley that could have vast implications for the entire tech industry.
The federal government’s lawsuit caps off a year long investigation that concluded Google wielded its digital dominance to the detriment of corporate rivals and consumers. The complaint contends that Google relied on a mix of special agreements and other problematic business practices to secure an insurmountable lead in online search, capturing the market for nearly 90 percent of all queries in the United States.
According to the Justice Department Google gained its “grip on distribution,” by paying billions of dollars to become the default search application in Web browsers, on smartphones and across a wide array of other devices and services, including those offered by some of its competitors. This vast reach allowed Google to enrich itself through lucrative ads, maintain its online foothold and render it impossible for other search engines to compete.
Bringing its case, the Justice Department did not ask a judge to break apart Google. Instead, it urged the court to consider “structural relief,” which could include a requirement that the company sell a portion of its business and cease other practices that federal regulators see as harmful and unlawful.
Google rejected the government’s claims as “deeply flawed.” Kent Walker, the company’s chief legal officer defended Google’s business practices, arguing that consumers nationwide still have the choice to use its rivals’ online offerings.
“American antitrust law is designed to promote innovation and help consumers, not tilt the playing field in favor of particular competitors or make it harder for people to get the services they want,” Walker wrote in a blog post. “We’re confident that a court will conclude that this suit doesn’t square with either the facts or the law.”
Eleven Republican attorneys generals from states including Louisiana, Florida and Texas signed onto the Justice Department’s lawsuit and, other states are still probing Google on antitrust grounds and may choose later to join the federal case or opt to bring their own, threatening to widen the legal territory Google must cover to defend its business from serious, potentially far reaching changes.
The Justice Department began to target Google due to part of a broad review of Big Tech which was announced last summer, with federal officials seeking to respond to what was described then as “widespread concerns that consumers, businesses, and entrepreneurs have expressed about search, social media, and some retail services online.” That September, Google started turning over key, sensitive documents to the Justice Department for its investigation, the company acknowledged in a securities filing at the time.
Agency officials signaled an interest in probing the company’s advertising business, in which contributed the lion’s share of the company’s $162 billion in 2019 revenue. Though, the probe expanded to touch on a wider array of issues in response to a flurry of complaints from rival companies from news publishers to travel review websites that say Google wields its powerful search engine in myriad ways to entrench its dominance.
The federal case filed on Tuesday ultimately hinges on several agreements brokered between Google with some of its rivals aimed at expanding the reach of its search engine. With its Android smartphone operating system, for instance, Google relies on formal arrangements with device manufacturers including Samsung and LG that force them to set the tech giant’s search as the default or could risk losing access to its other suite of coveted smartphone apps and services.
Apple, Samsung and other tech giants did not respond to requests for comment.