Google has become the subject of an antitrust lawsuit launched by the US Department of Justice (DoJ).
On Tuesday in a briefing held by Deputy Attorney General Jeffrey Rosen, the DoJ said that the company is illegally maintaining a monopoly over online search services and related advertising in the quest for profit, and as such, rival companies are being denied the opportunity to compete effectively.
Google said the DOJ lawsuit is deeply flawed and "would artificially prop up lower-quality search alternatives, raise phone prices, and make it harder for people to get the search services they want to use."
As noted by sister site CNET, digital advertising accounts for roughly 85% of Google's estimated annual sales of $160 billion.
The high-profile case, including the DoJ and 11 states, alleges that Google has violated Section 2 of the Sherman Act following a 2019 investigation into "market-leading platforms" and their competitive practices. This act is not invoked every day -- the last major case involving Microsoft in 1998 -- but the regulations can be used to tackle monopoly complaints.
The 64-page complaint calls Google "a gateway to the Internet," and while does give Google credit for transforming from a small search engine to a technology giant, also accuses the company of "exclusionary practices that are harmful to competition."
Furthermore, the DoJ accuses the company of "interlocking agreements that exclude competitors," such as by preventing vendors from pre-loading rival search services on Android handsets through "illegal agreements." In addition, the DoJ claims that Google forces the "preinstallation of its search applications in prime locations on mobile devices and make them undeletable, regardless of consumer preference."
When it comes to Apple devices, a monopoly is also allegedly maintained via long-term contracts with Apple to make sure Google's search functionality is the default and "de facto exclusive" option on the Safari browser and other search tools.
"An antitrust response is necessary to protect consumers [...] and the next wave of innovation," Rosen commented.
The DoJ said this case is "just beginning" and has already involved one of the largest teams in the department's history -- including legal and technology experts, as well as economists. While the department is seeking to change Google's practices, "nothing is off the table" when it comes to undoing the "harm" caused by over a decade of anticompetitive business, the DoJ added.
"We are working tirelessly to identify and stop anti-competitive practices," a DoJ representative commented. "We look forward to presenting our case in court."
While the department would not comment on whether or not other states could join the lawsuit, the DoJ did note that the 2019 investigation is ongoing -- and Google "would not be an exception to that."
Antitrust cases are taken seriously by regulators in the US, Europe, and beyond, as stifling competition can lead to unfair business practices, the suffocation of rival companies, a lack of innovation, and can potentially harm consumers when there is no real competition in the market when it comes to quality, product variety, and pricing.
This is not the first time that Google has clashed with regulators over competition laws. In March 2019, the tech giant was struck with a €1.49 billion fine by the European Commission (EC) for breaking EU antitrust laws by preventing rival companies from implementing adverts in third-party websites -- a practice regulators said was made possible through restrictive contract clauses.
Following this penalty -- as well as a €2.4bn antitrust fine for favoring its own shopping service by the EC, and a €4.3bn fine over restrictions placed on Android device makers and network operators to strengthen its own search position -- the EC then launched a query into Google's Chrome web browser. Investigators are examining how the browser relates to Google's rivals; in particular, local search services and online advertising.
A Google spokesperson told ZDNet:
"Today's lawsuit by the Department of Justice is deeply flawed. People use Google because they choose to -- not because they're forced to or because they can't find alternatives."
Previous and related coverage
- US antitrust probe finds 'alarming pattern' of innovation-stifling practices
- Antitrust showdown: Apple, Amazon, Facebook, and Google CEOs report to Capitol Hill
- Apple's antitrust fight could spell the end of iOS as we know it
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