Google Abuses Its Monopoly Power Over Search, Justice Department Says In Lawsuit

October 20, 2020 / 8:14 am

caption: The U.S. Justice Department is suing Google, accusing the tech giant of breaking antitrust laws as it amassed power and grew into the world's most dominant search engine.

Updated at 11:30 a.m. ET

The Justice Department on Tuesday filed an antitrust lawsuit against Google that says the company abused its dominance over smaller rivals. It's the federal government's most significant legal action in more than two decades to confront a technology giant's power.

Justice Department lawyers accuse Google of illegally using its monopoly power to stifle competition and hurt consumers through exclusionary agreements, including deals like the one it struck with Apple making Google the default search engine on the Safari browser on iPhones.

Justice officials say Google used profits it made from its dominant position to buy special treatment for its search engine on devices and Web browsers, creating what the department says is a "self-reinforcing cycle" of monopoly power abuse.

"The Google of today is a monopoly gatekeeper for the internet," the complaint says. "For many years, Google has used anticompetitive tactics to maintain and extend its monopolies in the markets for general search services, search advertising, and general search text advertising — the cornerstones of its empire."

In the suit, Justice Department lawyers ask a federal court to stop Google from maintaining monopoly power over Internet search and search advertising. The government is asking a federal judge to provide relief "as needed" to resolve the alleged anticompetitive behavior.

Eleven Republican-led states joined the lawsuit, which was filed in the U.S. District Court for the District of Columbia. New York Attorney General Letitia James, a Democrat, said she and other state attorneys general are expected to wrap up their investigation of Google soon and they may ask to join the Justice Department suit.

"Absent a court order, Google will continue executing its anticompetitive strategy, crippling the competitive process, reducing consumer choice, and stifling innovation," Justice Department lawyers wrote.

In a statement, Google called the lawsuit "deeply flawed."

"People use Google because they choose to — not because they're forced to or because they can't find alternatives," Google said.

The lawsuit sets up a high-stakes showdown between the Trump administration and Google two weeks before a presidential election, raising questions about the suit's timing.

President Trump has promised to hold Big Tech accountable, repeatedly accusing tech companies of being biased against conservatives, despite the notion not being supported by evidence.

The lawsuit also represents the biggest battle over the power of a dominant technology company since the government sued Microsoft in 1998 for using its heft to squash competition.

More than 80% of online searches in the U.S. happen on Google, according to the complaint. On mobile devices, it controls about 95% of searches, Justice officials say.

That dominance has enabled the company to build a massive advertising business that generates nearly all of its $160 billion in yearly sales. Google captures almost 30% of U.S. digital ad dollars, according to research group eMarketer, ahead of Facebook and Amazon.

Critics say Google has created a stranglehold in search that allows it to show more ads and keep people locked into its properties, like YouTube and Maps. They say it has done that by striking deals to become the default search engine in many browsers and devices, favoring its own content and websites over competitors' in search results and building up a deep trove of data on users and rivals.

Another rival, Yelp, the local search and review site, applauded the Justice Department's Tuesday action.

"By systematically reducing the quality of its search results in order to entrench and extend its search and search advertising monopolies, Google is directly harming consumers," Yelp said in a statement.

In a lengthy report released by House Democrats this month on the unchecked power of Big Tech, lawmakers wrote of Google that "no alternative search engine serves as a substitute."

"Google increasingly functions as an ecosystem of interlocking monopolies," the report said, because of the company's ability to tie together its search and ads business with the data it collects.

Google has long said it plays fairly and that its products — which are free to consumers — promote choice and competition.

The Justice Department and attorneys general from 50 states and territories have been investigating Google for more than a year, with probes focusing on its search and advertising businesses. It comes amid broader scrutiny of the power of Big Tech, which includes separate investigations into Facebook, Amazon and Apple.

Google has weathered challenges before, including a Federal Trade Commission investigation into its search business that ended in 2013 without finding any wrongdoing. The company has been fined more than $9 billion in the past few years by competition regulators in Europe.