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Google faces third antitrust lawsuit for allegedly manipulating searches

Filed by a bipartisan group of 38 attorneys-general.

Written by Campbell Kwan, Contributor Dec. 17, 2020 at 5:51 p.m. PT

Google has been sued again on antitrust allegations, this time by more than 30 US states, for abusing its market power to rearrange search results to squeeze out competition.

According to the legal complaint [PDF], Google methodically buried competitor sites and services in its own search results -- despite these competitors paying Google for advertising services -- and, at the same time, prominently displayed its own competing reviews or services. This prevented companies from creating specialised services that could have challenged Google's search engine, the complaint said.

"In this way, Google bars its own advertising customers from making their value known to consumers in a manner that would benefit competition, consumers, and advertisers. In so doing, Google degrades access provided to specialised services as compared to other services that do not pose a competitive threat," the complaint said.

This abuse of power, the bipartisan group of 38 attorneys-general said in their lawsuit, has given Google nearly 90% of the internet search market.

By comparison, the bipartisan group said no competing search engine has more than 7% of the market, and, over the past decade, no new entrant in the general search market in the United States has accounted for more than 1% of internet searches in a given year.

"Our economy is more concentrated than ever, and consumers are squeezed when they are deprived of choices in valued products and services. Google's anti-competitive actions have protected its general search monopolies and excluded rivals, depriving consumers of the benefits of competitive choices, forestalling innovation, and undermining new entry or expansion," Colorado Attorney-General Phil Weiser said.

In response to the latest lawsuit, Google's director of economic policy Adam Cohen said in a blog post the company was prepared to answer questions but would fight the allegations.

"This lawsuit seeks to redesign Search in ways that would deprive Americans of helpful information and hurt businesses' ability to connect directly with customers. We look forward to making that case in court, while remaining focused on delivering a high-quality search experience for our users," Cohen said.

This is the third lawsuit filed against Google by US regulators in recent months, with the latest lawsuit coming only a day after 10 other US states accused Google of colluding with Facebook to manipulate the digital ad market, and two months after the Justice Department filed a similar monopolisation case.

Meanwhile, the US Federal Trade Commission (FTC) and 40 state attorneys-general last week accused Facebook, in two separate lawsuits, of buying Instagram and WhatsApp to crush smaller rivals and snuff out competition. Both lawsuits have called for Facebook to divest itself from Instagram and WhatsApp.

Taken together, these lawsuits indicate a shift in government perception of big tech companies to being viewed as monopolies that stifle competition.

This push for increased oversight of big tech companies is not only in the US. Earlier this week, the European Commission proposed two new pieces of legislation that could potentially give it the power to compel big tech companies to take down harmful content and open up competition, otherwise they risk paying hefty fines.

Down under, Australia has tabled legislation that attempts to address the fundamental bargaining power imbalances between Australian news media businesses and major digital platforms, such as Facebook and Google.

In response to the legislation entering Parliament, Google said in a blog post on Friday that the code's arbitration model -- which would contain a binding bargaining agreement between new media businesses and platforms -- and the requirement to pay publishers for having them appear on search results are both "unworkable".

This is despite the code recently being revised to contain a "two-way value exchange", which Australian Treasurer Josh Frydenberg said would require the value of search results in directing attention to content created by news publishers to be considered during the arbitration process.

"It forces Google to pay to show links in an unprecedented intervention that would fundamentally break how search engines work. No website and no search engine pays to connect people to other websites, yet the code would force Google to include and pay for links to news websites in the search results you see," Google ANZ vice president Mel Silva said in the blog post.

Silva's comments echo much of what Google has been pushing since August. In addition to calling the code "unworkable", the search giant has previously labelled the code as "unfair", while also saying it puts the "way Aussies' search at risk", would result in a "dramatically worse Google Search and YouTube" experience down under, and "ignores the real-world value Google provides to news publishers and opens up to enormous and unreasonable demands".

Google also posted a separate blog post on Friday, stating that it would continue to support third-party cookies in the meantime, despite privacy concerns around their use, as publishers receive on average 52% less programmatic ad revenue when third-party cookies are disabled.

"We're committed to having privacy-preserving mechanisms in place that address the industry's critical needs before discontinuing support for third-party cookies. We think this will not only promote business growth for numerous companies," Google said.

Google has previously said the feature to disable third-party cookies will not fully roll out to Chrome users until 2022.

Outside of the legal realm, Google and other big tech companies are currently the subjects of various federal antitrust investigations conducted by the FTC, House Judiciary Committee, and the Department of Justice.

The findings from the House Judiciary Committee's probe, released two months ago in a 450-page report, found Google holds a monopoly, with search dominance "protected by high entry barriers".

Such anti-competitive tactics, the report listed, include contractual restrictions and exclusivity provisions to extend Google's search monopoly, such as in the case of its 2005 purchase of the Android operating system.

"Google exploits information asymmetries and closely tracks real-time data across markets, which -- given Google's scale -- provide it with near-perfect market intelligence," the report said. "In certain instances, Google has covertly set up programs to more closely track its potential and actual competitors, including through projects like Android Lockbox."

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