WASHINGTON – In a landmark antitrust lawsuit filed Tuesday, the Justice Department and 11 states accused Google’s online search and advertising business of violating federal laws against monopolies and harming consumers, advertisers and competitors.
Jeff Feldman, a law professor at the University of Washington, said the case is relatively unprecedented in the history of antitrust law, given the size and nature of the company.
“It certainly is not a standard antitrust case,” Feldman said, “but in the world of high tech, it is what we have come to see. … We now live in a world where we have some extraordinarily large and economically powerful companies.”
The suit, filed in a federal district court in Washington, D.C., alleges Google has used the earnings from its search business to maintain its dominance, paying companies like Apple billions each year to make Google the default search on their devices.
“Today’s challenge against Google – the gatekeeper of the Internet – for violating antitrust laws is a monumental case both for the Department of Justice and for the American people,” Attorney General Bill Barr said in a statement. “This lawsuit strikes at the heart of Google’s grip over the internet for millions of American consumers, advertisers, small businesses and entrepreneurs beholden to an unlawful monopolist.”
Google pushed back, with a spokesman arguing in a blog post that the company pays to promote its services “just like a cereal brand might pay a supermarket to stock its products at the end of a row or on a shelf at eye level.”
“Today’s lawsuit by the Department of Justice is deeply flawed,” Kent Walker, Google’s senior vice president for global affairs, wrote. “People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives.”
Google’s search business – which makes money by selling ads that target users based on data the company collects – generates the majority of revenue for its parent company, Alphabet. That revenue was more than $98 billion of Alphabet’s roughly $162 billion in 2019, according to an earnings statement.
The closest analog to Tuesday’s lawsuit, Feldman said, was the government’s 1998 suit against Microsoft, in which the Justice Department accused the Redmond, Washington-based company of creating a monopoly by bundling its Internet Explorer browser with the Windows operating system. Despite the unique nature of Tuesday’s lawsuit, he said, the principles behind the government’s move are not new.
“The legal theory and the economic theory that’s at play here is actually not that unusual,” said Feldman, who practiced antitrust law before joining the UW faculty. “If you have enough economic power that you can force your customer or your partner not only to engage in a transaction but also tie that to other relationships, that’s a way of using your power to assert some element of control over the market. That phenomenon has been the subject of any number of antitrust actions over the years.”
Mason Marks, a law professor at Gonzaga University and Petrie-Flom Center fellow at Harvard Law School, said the government could be making a mistake by looking at Google as a monopoly in the traditional sense, which takes a narrow view of a company dominating a single market.
Alphabet – which in addition to Google includes the life sciences company Verily, home security company Nest and others – has its sights on something bigger than dominating the search market, Marks said. He calls this idea “biosupremacy,” influence that cuts across industries to affect entire populations.
“To say that users can just switch to another (search engine) is pretty disingenuous,” Marks said. “People are kind of trapped within the Google ecosystem. … It certainly does provide a benefit over other competitors, but it does come at a cost, which is that you’re providing Google with a lot of information about you.”
That data, Marks said, helps Google and its Alphabet siblings increase their parent company’s dominance in multiple markets by building increasingly detailed profiles of its users.
“We don’t want a single search engine to have such a large share of the market,” he said, “but we also need to think about how the data that people put into the search engine flows to the other limbs and branches of this company and affects other markets.”
The suit comes as Republicans and Democrats alike have been stepping up criticism of Google and other tech giants. While Tuesday’s action saw only GOP state attorneys general join the Trump administration in suing Google, it came just two weeks after Democrats on the House Judiciary Committee released a lengthy report alleging unfair, anti-competitive practices by Google, Facebook, Apple and Amazon.
“We concluded it’s time to rein in Big Tech’s anti-competitive behavior as it harms innovation, small businesses, consumers and local journalism,” Rep. Pramila Jayapal, a Seattle Democrat and member of the subcommittee that produced the report, tweeted Tuesday. “It is critically important that the Department of Justice’s Antitrust Division take very seriously the responsibility to protect workers, small businesses, and the public from the harms of monopolies through a thorough and legally rooted investigation.”
Google CEO Sundar Pichai is set to testify before the Republican-controlled Senate Commerce Committee on Oct. 28, along with the CEOs of Twitter and Facebook, as lawmakers continue to fret over Silicon Valley’s influence in American society.
Marks argues the federal government needs to take a broader view of anti-competitive behavior in order to serve the original goals of antitrust law.
“The whole purpose of antitrust was to control the political power of companies, and that’s been lost. Now antitrust focuses so narrowly on a single market or how price is affected and it needs to go back to its original roots, in a sense, but also expand its scope.”
Feldman said that if past antitrust suits are any indication, this case could take years to play out in the courts. It’s not clear if future administrations will take the same approach as the Trump administration.
“If the case is resolved in favor of Google, then everything remains the same,” Feldman said. “What’s harder to visualize is: What would the world look like if this case were successful?”
“Everybody uses Google. It’s the most ubiquitous product on the planet,” he said. “As a consumer, the thing that’s most interesting for me to know is: If the government is right, how is my world going to change? I’m not sure we know the answer to that.