Google LLC’s headquarters complex in Mountain View, Calif. Source: Thomas Hawk via Flickr
Attorney General Ashley Moody has joined a federal and multi-state antitrust action accusing Google LLC of monopolizing the markets for internet search services and advertising by using exclusionary agreements to freeze out potential competitors.
The lawsuit, filed on Tuesday, alleges that the company has harmed consumers and innovation by using exclusionary agreements with device manufacturers, wireless carriers, and browser developers to guarantee default access for its search engine and, “in many cases, to specifically prohibit Google’s counterparties from dealing with Google’s competitors.”
The parties asked the U.S. District Court for the District of Columbia to enjoin Google’s allegedly anticompetitive activities and erect protections for consumers and competitors. It also seeks to recover the plaintiffs’ costs of litigation.
“Google is one of the largest and most powerful companies in the world. Regardless of its size, all companies have an obligation to compete fairly in the marketplace. Our investigation into Google revealed that the global tech behemoth allegedly used its size and scale to build a moat around its core markets— general search services and search advertising,” Moody said in a written statement.
“We believe Google’s conduct violates state and federal antitrust laws and that a successful outcome in this case will bring many benefits to all Americans including Florida consumers, the overwhelming majority of whom use Google products every day.”
Also joining the litigation are the U.S. Department of Justice and the states of Arkansas, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina, and Texas.
“If we let Google continue its anticompetitive ways, we will lose the next wave of innovators and Americans may never get to benefit from the ‘next Google.’ The time has come to restore competition to this vital industry,” Attorney General William Barr said in a written statement.
He added that separate DOJ sections are investigating “online child exploitation, public safety, and censorship” allegations against the tech industry. Additionally, he said, the agency plans to seek reform of a federal statute that gives tech companies safe harbor against legal liability for third-party information published on their platforms.
Google defended itself via a written statement by Kent Walker, senior vice president for global affairs.
“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,” Walker wrote.
“This lawsuit would do nothing to help consumers. To the contrary, it 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.”
The complaint compares this case to the antitrust prosecution against Microsoft Corp. some 20 years ago, in which the courts “recognized that anticompetitive agreements by a high-tech monopolist shutting off effective distribution channels for rivals, such as by requiring preset default status (as Google does) and making software undeletable (as Google also does), were exclusionary and unlawful under Section 2 of the Sherman Act.”
Google was among the companies complaining about Microsoft’s behavior back then, the complaint notes.
“Two decades ago, Google became the darling of Silicon Valley as a scrappy startup with an innovative way to search the emerging internet. That Google is long gone. The Google of today is a monopoly gatekeeper for the internet, and one of the wealthiest companies on the planet, with a market value of $1 trillion and annual revenue exceeding $160 billion,” the document notes.
“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.”
According to the complaint, Google pays billions of dollars annually to companies including Apple, LG, Motorola, AT&T, T-Mobile, Verizon, Mozilla, Opera, and UCWeb “to secure default status for its general search engine and, in many cases, to specifically prohibit Google’s counterparties from dealing with Google’s competitors.”
The company in total owns or controls some 90 percent of the general search inquiries in the United States and 95 percent on mobile devices, the plaintiffs allege.
“Google has thus foreclosed competition for internet search. General search engine competitors are denied vital distribution, scale, and product recognition — ensuring they have no real chance to challenge Google. Google is so dominant that ‘Google’ is not only a noun to identify the company and the Google search engine but also a verb that means to search the internet.”
The complaint alleges that a top Google executives warned employees against committing to writing anything that might give an impression of seeking a monopoly — including “bundle,” “tie,” “crush,” “kill,” “hurt,” or “block” competition, “and to avoid observing that Google has ‘market power’ in any market.”
Now, the complaint continues, the company is targeting new search platforms including internet-enabled smart speakers, home appliances, and cars.
“Absent a court order, Google will continue executing its anticompetitive strategy, crippling the competitive process, reducing consumer choice, and stifling innovation,” it says.
“Google is now the unchallenged gateway to the internet for billions of users worldwide. As a consequence, countless advertisers must pay a toll to Google’s search advertising and general search text advertising monopolies; American consumers are forced to accept Google’s policies, privacy practices, and use of personal data; and new companies with innovative business models cannot emerge from Google’s long shadow.
“For the sake of American consumers, advertisers, and all companies now reliant on the internet economy, the time has come to stop Google’s anticompetitive conduct and restore competition.”
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