Ayyyeee… What’s Goodie Everyone…So I got some tea and it involves Google being sued by 40 states… Here’s why.
On Thursday almost 40 states filed a wide ranging antitrust lawsuit against Google alleging the tech giant manipulates its search results to give its own products and services greater rankings over rivals depriving web users from seeing the best options whenever they query the web for shopping, dining, travel and more.
The lawsuit filed by nearly 40 state attorneys general marks the third competition case that U.S. regulators have filed against the search and advertising giant since October, reflecting the rising unease with Google’s massive profits and expansive reach and the growing national dissatisfaction with Silicon Valley at large.
The heightened scrutiny marks a stunning turn of fortunes for Google, which for years managed to dodge U.S. antitrust scrutiny. Nearly a decade ago, federal watchdogs similarly probed Google out of concern it had been acting anti competitively yet a government agency concluded its inquiry in 2013 without bringing a case against the company and its sprawling search business. The U.S. ultimately stood alone in opting against seeking massive penalties against Google, even as European regulators issued a battery of punishments and roughly $9 billion in fines over allegations that the company acted in a uncompetitive manner.
Google faces a political and regulatory assault aimed at the very heart of its business and on Wednesday, Texas Attorney General Ken Paxton led nine fellow Republican officials in suing Google over its advertising practices, claiming the tech giant illegally sought to suppress competition and reap massive profits from targeted advertisements placed across the internet.
Just months earlier, the Department of Justice filed its own antitrust case. The complaint took aim at Google’s special arrangements to ensure its search engine is set as the default option on a wide array of devices, including Apple’s iPhone, and services, such as the Mozilla Firefox web browser. Google denies the charges that its practices violate federal competition laws.
Colorado, Nebraska and other states attorneys general said on Thursday they would seek to consolidate their lawsuit with the Justice Department’s earlier complaint so that the cases would be argued together. Much like the earlier lawsuits, the Democratic and Republican state leaders opened the door for a judge to order broad penalties, including potentially forcing Google to sell off its business. They stopped short of calling explicitly for Google to be broken up.
Investigators estimate that Google’s special deals have helped it become the default search service on 80 percent of web browsers. It has also tied its search engine to the Android operating system, further pushing its service to billions of smartphone users worldwide, and Google has expanded its exclusionary deals to home assistants, ensuring the next generation of search tool from smart speakers to connected car also generate traffic for Google.
“Google sits at the crossroads of so many areas of our digital economy and has used its dominance to illegally squash competitors, monitor nearly every aspect of our digital lives, and profit to the tune of billions,” according to Letitia James (D), the attorney general of New York, one of the eight state leaders driving the Google case.
Google argued that antitrust regulators around the world already concluded that the way it presents search results is not anti competitive. Changing its approach threatened to “harm the quality of your search results,” said Cohen, the company’s economic policy director, adding it would “come at the expense of businesses like retailers, restaurants, repair shops, airlines and hotels whose listings in Google help them get discovered.”
The antitrust lawsuits against Google go along with a broader regulatory reckoning across Technology world. State and federal officials announced last week two wide ranging antitrust lawsuits against Facebook, alleging the social networking giant sought to buy, bully or kill its rivals, harming competition and leaving users with few other options online. The lawsuits called on a federal judge to consider breaking the company up, setting up a massive battle to come between the U.S. government and one of Silicon Valley’s most powerful firms. Federal regulators and lawmakers on Capitol Hill also have probed Apple and Amazon over competition concerns. And some federal policymakers have sought broad revisions to federal antitrust law, hoping to make it easier to prosecute competition abuses in the future.
Google’s special deals also have created a special kind of headaches for companies including Yelp, a reviews site, and TripAdvisor, a travel search service, which for years have asked regulators to intervene. These firms generally must rely on Google in order to attract traffic and customers. But Google heavily restricts these companies in the way they can advertise and even in their ranking on the search results page in a move that state officials said seeks to constrain their growth. In the process, Google promotes its own restaurant reviews and travel offerings, according to the lawsuit, which drew praise from Google’s critics.