Google is facing a landmark lawsuit filed by the U.S. Department of Justice, which is claiming the tech giant holds an illegal monopoly over search and search advertising. The suit is likely to ignite a long, messy battle between Washington, D.C. and Silicon Valley and possibly hold sweeping implications for the entire tech industry.
The suit, which was filed Tuesday, is joined by 11 states and accuses Google, a unit of Alphabet, violating antitrust laws. Deputy attorney general Jeffrey Rosen, who led the years-long investigation, said that Google “has maintained its monopoly power through exclusionary practices that are harmful to competition.” The suit says these practices include exclusive business contracts and agreements.
Google controls nearly 90 percent of all online searches around the world. That fuels its search advertising business, which brought in $34.3 billion in the U.S. last year, according to the research firm eMarketer.
In a statement posted to Twitter, Google said, “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. We will have a full statement this morning.”
The DOJ’s complaint comes on the heels of a major congressional report that found Big Tech (Google, Apple, Amazon) wield “monopoly power” and condemned their anticompetitive pracftices.
This is the largest antitrust case against a tech company in over two decades, when the DOJ accused Microsoft of a monopoly in the PC software business. The two sides settled in 2001.
Here’s what you need to know about the government vs Google antitrust suit.
United States v. Google: How it developed
The suit was filed Tuesday as United States v. Google in federal court in Washington D.C. Eleven states joined the DOJ: Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas. All have Republican attorneys general.
More states may join the suit; New York Attorney General Letitia James, a Democrat, told NPR she and others are wrapping up their own investigations into Google.
President Donald Trump has repeatedly attacked Google and other tech companies for bias against conservatives, despite lack of evidence. Attorney General Bill Barr reportedly pushed through the investigation by setting tight deadlines, according to the New York Times.
Liberal lawmakers, like Senator Elizabeth Warren, have also been critical of big tech. When Warren was running for president, she outlined a plan to break up the massive companies: “To restore the balance of power in our democracy, to promote competition, and to ensure that the next generation of technology innovation is as vibrant as the last, it’s time to break up our biggest tech companies.”
What the Google lawsuit says
The DOJ’s complaint says that Google is violating Section 2 of the Sherman Act through its alleged monopoly maintenance.
“Two decades ago, Google became the darling of Silicon Valley as a scrappy startup with an innovative way to search the emerging internet,” the complain reads. “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. 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.”
The suit calls out “exclusionary agreements, including tying arrangements” and “anticompetitive conduct to lock up distribution channels and block rivals.” For example, the complaint outlines how Google pays Apple billions of dollars a year to be the default search engine on the Safari web browser on iPhones.
The DOJ is not looking to break apart Google, but it does seek “structural relief,” which could require the company to sell part of its business. The legal battle could take years, unless there’s a quick settlement or a change in priorities at the DOJ.
Aside from the one reaction on Twitter, Google has not commented further on the lawsuit.