- Google now faces its first antitrust lawsuit by the U.S. government as the Department of Justice announced its intent to press charges against the tech giant.
- Attorneys general from almost every state have also been probing Google’s practices.
- Google’s search and advertising businesses had emerged as key areas of interest for antitrust regulators.
The Department of Justice will file its antitrust lawsuit against Google Tuesday, which will reportedly focus on the tech giant’s dominance in online search.
Eleven Republican state attorneys general have joined the DOJ as plaintiffs in the case: Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas, according to an open docket of the case filed Tuesday morning.
Google’s stock barely moved following news of the suit. Shares were slightly positive as of Tuesday morning.
The lawsuit is the culmination of a more than year-long investigation into the company’s business practices. Google was previously the subject of a U.S. antitrust investigation by the Federal Trade Commission over its search product, but the agency closed that probe in 2013 without charges. A leaked document published by The Wall Street Journal later showed staff had recommended bringing a case on several grounds.
Google has also faced penalties for alleged competition violations abroad, most notably in the European Union. The commission’s competition authority has waged over $9 billion in fines against Google in two separate cases focused on its shopping price comparison product and Android mobile operating system.
But the DOJ lawsuit marks the first time a serious antitrust charge has been brought against Google on the federal level in its home country. Attorneys general from every state besides Alabama have also been probing Google’s practices. California’s attorney general has not confirmed its investigation, but Politico reported last month that the state had opened its own probe separate from the multistate effort led by Texas.
Attorney General Bill Barr had pushed staff in the Antitrust Division to bring a case against Google by the end of September, though most of the roughly 40 lawyers working on the probe wanted more time to craft a more thorough case, The New York Times first reported. Disagreements about how to approach the case between the Republican Justice Department and the state-led probe including mostly Democratic AGs had stalled the decision to bring a case, Politico reported last month.
Google did not immediately provide a statement on the expected suit.
Antitrust concerns around Google
Google’s search and advertising businesses have emerged as key areas of interest for antitrust regulators. The rise of those verticals were fueled in part by key acquisitions, like that of advertising technology company DoubleClick. Antitrust chief Makan Delrahim had been hired to lobby the government for approval of the Google-DoubleClick merger back in 2007. He recused himself during the later stage of the investigation.
Google has technology in every step of the complex and opaque buying process for digital ads. Though it allows advertisers to use other digital tech tools to buy space on most of its properties, advertisers must use Google’s tools to buy inventory on Google-owned YouTube.
Vertical search competitors including Yelp and TripAdvisor have complained that Google has created an unfair playing field on its dominant search platform which now includes products that compete directly with Yelp’s local search product and TripAdvisor’s travel search engine.
Google’s Android mobile operating system has also attracted scrutiny, like in the European Union, where it was required to present consumers with options for their default search engine on the OS.
The Justice Department’s action in the Google case may be an ominous sign for other tech companies. The Department has been conducting a broad review of the tech industry and reportedly has oversight of Apple in antitrust matters, according to multiple outlets. The Federal Trade Commission has an ongoing probe into Facebpook’s competitive practices and has contacted Amazon sellers about their experience on the platform, according to Bloomberg.
The CEOs of the four companies faced a panel of lawmakers on the House Judiciary subcommittee on antitrust in late July at a hearing about their competitive practices. Documents shared by the committee provided a glimpse into the types of evidence regulators have likely been poring over for the past year, such as emails from executives about key mergers, like Google’s acquisition of YouTube, and discussions about competing services.
A nearly 450-page report by the majority Democratic staff found that all four businesses hold monopoly power that should be reined in by Congress and enforcers. Bipartisan members of the committee are now looking forward to rewriting antitrust laws to better address digital markets.
By Lauren Feiner