Google Sued the US Government - here's What You Need to Know

Google Sued the US Government - here's What You Need to Know

Google is facing a landmark lawsuit from the U.S. Department of Justice for illegally monopolizing search and search advertising. The lawsuit is likely to spark a long and nasty battle between Washington, D.C., and Silicon Valley, and will likely have far-reaching implications for the entire tech industry.

The lawsuit, filed Tuesday, involves 11 states and alleges that Alphabet-owned Google violated antitrust laws. Deputy Attorney General Jeffrey Rosen, who led the multi-year investigation, said Google "has maintained its monopoly power through exclusive practices that are harmful to competition." According to the complaint, these practices include exclusive business contracts and agreements.

Google controls nearly 90% of online searches worldwide. This drives its search advertising business, which generated $34.3 billion in the U.S. last year, according to research firm eMarketer.

In a statement posted on Twitter, Google said, "Today's lawsuit by the DOJ is deeply flawed. People use Google because they choose to, not because they are forced to or cannot find an alternative. We will be issuing a detailed statement this morning."

The DOJ complaint comes on the heels of a major congressional report that found big tech (Google, Apple, and Amazon) exercising "monopolistic power" and accused them of anti-competitive behavior.

This is the largest antitrust case against a high-tech company in more than two decades. The two sides settled the case in 2001.

Here's what you need to know about the government vs. Google antitrust case.

The lawsuit was filed Tuesday in federal court in Washington, D.C. as United States v. Google. Both are Republican attorneys general. [New York Attorney General Letitia James, a Democrat, told NPR that she and other states have completed their own investigations into Google.

President Donald Trump has repeatedly attacked Google and other tech companies for being biased toward conservatives, despite a lack of evidence. According to the New York Times, Attorney General Bill Barr reportedly forced the investigation by setting a strict deadline.

Liberal lawmakers like Senator Elizabeth Warren have also been critical of big tech companies. When Warren ran for president, she outlined a plan to dismantle the giant corporations: "Now is the time to break up the biggest tech companies to restore the balance of power in our democracy, to promote competition, and to ensure that the next generation of innovation is as vibrant as the last."

According to the DOJ complaint, Google violated Section 2 of the Sherman Act by allegedly maintaining a monopoly.

Twenty years ago, Google was the darling of Silicon Valley as a scrappy startup with innovative ways to search the emerging Internet. 'That Google is no more. Today Google is the monopolistic gatekeeper of the Internet and one of the wealthiest companies on the planet, with a market capitalization of $1 trillion and annual sales in excess of $160 billion. For years, Google has used anti-competitive tactics to maintain and expand its monopoly in the markets for general search services, search advertising, and general search text advertising, which are the cornerstones of its empire.

The lawsuit cites "exclusionary agreements involving tying" and "anti-competitive practices that fix distribution channels and impede rivals." For example, the complaint outlines that Google pays Apple billions of dollars a year to be the default search engine for the iPhone's Safari web browser.

The DOJ is not looking to dismantle Google, but is seeking "structural relief." Barring an early settlement or a change in the DOJ's priorities, the court battle could take years.

Aside from reactions on Twitter, Google has not commented further on the lawsuit.

.

Categories