DOJ files antitrust lawsuit against Google, says it stifles competition

The Justice Department on Tuesday sued Google in the government’s most aggressive antitrust action in more than 20 years, accusing the Big Tech behemoth of steering search results to its products and shutting out competitors.

The underhanded dealings prevented other businesses from building the scale necessary to compete, leaving consumers with less innovation and higher prices, the Justice Department said.

Google used “monopoly power” and “billions in monopoly profits” to ensure its dominance, said Attorney General William Barr.

Google is estimated to handle about 80% of U.S. searches, and advertising generated through those queries generates nearly all of the company’s $160 billion in annual revenue.

Mr. Barr called the lawsuit, which has been long anticipated, “a monumental case” that demonstrated that investigating technology companies was a “primary commitment.”

The lawsuit is the largest antitrust case against the government since it sued Microsoft in 1998. That case ended with a multibillion-dollar settlement between the tech giant and the government.

Kent Walker, Google’s chief legal officer and senior vice president of global affairs, said the lawsuit is “deeply flawed” and “relies on dubious antitrust arguments” that “would do nothing to help consumers.”

“People use Google because they choose to, not because they are forced to, or because they can’t find alternatives,” he wrote in a blog post.

The legal action was joined by 11 states: Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas. Texas Attorney General Ken Paxton is conducting his review of Google’s business practices, which 48 other state attorneys general have assisted.

A court battle with Google, which has the resources to mount a fierce defense, is likely to last for years as it bounces among appellate courts.

It is not clear whether Democratic presidential nominee Joseph R. Biden would have an appetite for pursuing the lawsuit if he wins the election next month.

Justice Department officials say Google uses an illegal web of business agreements that keep competitors from appearing in search results.

For example, they say Google uses its advertising revenue to pay mobile phone manufacturers and carriers such as Apple to maintain Google as the preset, default search engine on iPhones.

That gives Google top priority on hundreds of millions of devices with no opportunity for a competitor to strike a similar agreement.

Google’s search application also is preloaded and cannot be removed from mobile phones running on Android operating systems. One of the most common operating systems in the world, Android is owned by Google.

Google owns top video platform YouTube and the most popular mapping website, which are the cornerstones of its trillion-dollar empire.

Google then uses a “web of exclusionary and interlocking agreements that shut out competitors,” said Associate Deputy Attorney General Ryan Shores, who works in the Justice Department’s antitrust division.

The Justice Department spent more than a year investigating Google’s advertising practices, and the lawsuit coincides with demands for a crackdown on Silicon Valley from lawmakers on both sides of the aisle.

The lawsuit was met with strong bipartisan support.

House Judiciary Committee Chairman Jerrold Nadler, a New York Democrat and one of President Trump’s fiercest critics, hailed the Justice Department’s action.

“There is bipartisan agreement in Congress and among federal and state antitrust enforcers that protecting competition and innovation online is essential to our economy. Today’s antitrust lawsuit against Google is an important step for ensuring a competitive online space,” Mr. Nadler said.

Sen. Josh Hawley, Missouri Republican, called it “the most important antitrust case in a generation.”

“Google and its fellow Big Tech monopolists exercise unprecedented power over the lives of ordinary Americans, controlling everything from the news we read to the security of our most personal information,” he said.

Consumer advocacy and tech groups slammed the lawsuit, but for different reasons depending on their political slant.

The left-leaning consumer advocacy group Public Citizen said the lawsuit is “a thinly veiled political stunt.” It called for stronger measures to hold Google accountable for what it says is “anti-competitive conduct.”

“The Trump DOJ’s narrow focus and alienation of the bipartisan state attorneys general is evidence of an unserious approach driven by politics and is likely to result in nothing more than a choreographed slap on the wrist for Google,” the group said.

Jake Ward, president of the Connected Commerce Council, a group that supports small tech businesses, called the Justice Department’s actions “political theater.”

“It is shockingly un-American for the Justice Department to try to punish success for political gain and reprehensible that tens of millions of small businesses could become roadkill on this crassly political highway,” he said.

In the lawsuit, the Justice Department is not asking for any specific remedies, but if it prevails, a federal judge could order Google to change its business practices. That could create inroads for competitors seeking to challenge Google’s dominance.

One possible outcome is a court ordering Google to sell off YouTube, Android or both.

A Justice Department loss could be a setback to calls for greater regulation of Big Tech. Google, Apple, Amazon and Facebook are the targets of a broader antitrust probe by the House Judiciary Committee.

The investigation, run by the committee’s antitrust subcommittee, is reviewing whether legislation is needed to rein in tech companies.

A report released by the subcommittee this month accuses the tech companies of “abuses of monopoly power” and calls for tight operating restrictions and making it harder for giants to buy smaller tech companies.

Mr. Paxton, the Texas attorney general, last year announced an antitrust probe into Google’s digital advertising business. The investigation has been supported by attorneys general from 48 states, the District of Columbia and Puerto Rico.

Mr. Paxton is looking into Google’s advertising operation and data collection policies. Some of the allegations are part of the Justice Department’s complaint.