The US government on Tuesday filed a blockbuster lawsuit accusing Google of maintaining an “illegal monopoly” in online search and advertising in the country’s biggest antitrust case in decades — opening the door to a potential breakup of the Silicon Valley titan.
The politically charged case, which could take years to play out, draws new battle lines between the US government and big tech with potentially major implications for the sector.
US Deputy Attorney General Jeffrey Rosen said that the case filed with Republican state attorneys general from 11 states takes aim at Google’s dominance of the online ecosystem.
Photo: Reuters
“Google is the gateway to the Internet,” Rosen said. “But it has maintained its monopoly through exclusionary practices that are harmful to competition.”
The suit said that these practices include long-term agreements requiring that Google search be pre-loaded on devices and making it impossible to delete some of its apps. The US government accuses Google of paying billions of US dollars to maintain that position, thus reinforcing its monopoly.
The lawsuit filed in Washington contends that Google’s actions shut out competitors and proposes that the court consider a range of remedies.
The filing calls for the court to “enjoin Google” from anticompetitive practices and consider “structural” changes to the company — which could mean breaking it up.
Google called the lawsuit “deeply flawed.”
“People use Google because they choose to — not because they’re forced to or because they can’t find alternatives,” Google general counsel Kent Walker said in a blog post. “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 move comes after months of investigations by US federal and state antitrust enforcers seeking to check the company’s power and parallel probes into other titans such as Amazon.com Inc, Facebook Inc and Apple Inc.
Progressives have accused the firms of stifling competition and worsening economic inequality. A US House of Representatives report earlier this month suggested that Google and others should be broken up to preserve competition.
Conservatives have accused them of political bias, although evidence has been scant.
Officials hinted that more antitrust actions might be coming.
“Today’s review is a milestone, but not a stopping point,” Rosen said. “We plan to continue our review of competitive practices by leading online platforms.”
The main unit of holding firm Alphabet Inc, Google operates the dominant search engine used in most of the world and a variety of related services such as maps, e-mail, advertising and shopping. It also operates the Android mobile operating system used on the majority of smartphones worldwide.
Google has been hit with big fines in the EU for unfair competition and has challenged those cases. The company has consistently denied claims of monopoly abuse.
Eric Goldman, a professor at Santa Clara University’s High-Tech Law Institute, said that the lawsuit was “well expressed,” but appeared to be motivated by the political animus of US President Donald Trump’s administration to Silicon Valley.
Goldman said that the case could end up being “Microsoft redux,” with the industry evolving more quickly than the legal process.
“Any discussion on remedy is premature given how long this case will take to litigate,” Goldman added.
The case is the most high-profile since the action filed against Microsoft Corp in 1998 and could be a test case for antitrust.
To win in court, the US government would need to overcome a long standard of antitrust law that cases must show consumers are harmed by monopolistic practices.
Matt Schruers, president of the Computer & Communications Industry Association, a trade group which includes Google, said that the lawsuit “was hurried out on the eve of an election where the administration has aggressively pressured tech companies to take actions in its favor.”
Avery Gardiner, a former US antitrust enforcement lawyer who researches competition for the Center for Democracy & Technology, said that the Trump administration would face an uphill battle in proving Google’s harm to consumers.
The lawsuit “basically ignores price and focuses on quality and innovation,” Gardiner said, adding that such attempts were not new, “but the antitrust agencies in the past have been reluctant to move forward without evidence of price effects, so this is a shift.”
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