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The US Government is Suing Google

The US Government is Suing Google

The United States Justice Department is finally suing Google over antitrust violations that have stifled competition.

The lawsuit is the first of its kind since the US sued Microsoft for anticompetitive practices in 1998, and could force Google to split into smaller companies. 

Unlike the FTC’s failed investigation in 2012, which focused on complaints of “search bias,” the DOJ lawsuit focuses on anticompetitive practices. “Absent a court order, Google will continue executing its anticompetitive strategy, crippling the competitive process, reducing consumer choice, and stifling innovation,” reads the suit.

The suit is backed by 11 Republican-led states, though progressive lawmakers including Senator Elizabeth Warren (D-MA) agree with the need to do something about Google’s monopoly.

“Google search is not a neutral gateway to the information available on the web,” argues former DOJ antitrust official David Dinielli. “Google search is a set of algorithms designed to make Google – or Alphabet, its parent company – the most money it can possibly make.”

The DOJ suit also has support from Yelp, which has been outspoken about Google’s unfair advantage. “By systematically reducing the quality of its search results in order to entrench and extend its search and search advertising monopolies, Google is directly harming consumers,” argues Yelp executive Luther Lowe. “Yelp applauds the work at the DOJ and encourages swift action by state attorneys general who are conducting parallel investigations into other aspects of Google’s business.”

Google’s monopoly is such that it controls more than 80% of search queries in the US, including 95% of searches from mobile devices. Google’s YouTube is the planet’s largest video platform, used by nearly 75% of American adults. Overall, the company is estimated to be worth nearly $1 trillion.

Aiding Google’s monopoly are its agreements with smartphone makers and browsers. Apparently, Google is paying billions of dollars per year to Samsung, Apple, LG, Motorola and others to ensure that its search engine is the default search engine on their devices.

All search services, including advertising, require complex algorithms that are constantly learning and changing; so by maintaining distribution agreements with smartphone makers, Google gets to enjoy a scale that is unavailable to competitors. Google’s advertising business alone raked in $135 billion last year (84% of its total revenue).

“The end result is that no one can feasibly challenge Google’s dominance in search and search advertising,” laments AG Bill Barr.

Google’s unfair monopoly has been addressed repeatedly by the European Union, which fined the tech giant $2 billion in 2019 for blocking websites from utilizing search engines other than Google to find advertisers, $4.9 billion in 2018 for blocking rival search engines on Android operating systems, and $2.6 billion in 2017 for prioritizing its own products in shopping queries.

Rather than restrictions and fines, the DOJ lawsuit asks for “structural relief” – a request that typically leads to forced asset sales. “Ultimately, it is consumers and advertisers that suffer from less choice, less innovation, and less competitive advertising prices,” reads the suit. “So we are asking the court to break Google’s grip on search distribution so the competition and innovation can take hold.”

When asked if Google would be forced to follow in the footsteps of Standard Oil, DOJ official Ryan Shores said “nothing is off the table.”

As expected, Google opposed the lawsuit as “deeply flawed” and claimed that people are using Google because they want to, not because they are forced to. Forcing Google to split into smaller companies would produce higher costs for consumers and put individuals at the mercy of poor-quality search engines, claims Google spokesman Kent Walker, who added that Google’s search engine has always been free. 

The lawsuit, which follows a years-long investigation by the Justice Department, is expected to take years to resolve. In the meantime, nearly all US attorneys general are conducting their own investigations into Google.

A separate report from the Senate cites Google’s “monopoly power,” accuses Amazon of mistreating third-party sellers, and describes Facebook’s moves to stifle competition through targeted acquisitions.

The Senate Commerce Committee plans to meet with the CEOs of Google, Facebook, and Twitter later this month.

Author’s Note: This lawsuit has been a longtime coming. Google, Facebook, and others have made so political enemies that they could be in real trouble. Their control is massive, but they are not invincible nor are they accountable, and they have abused their power every step along the way.

Sources:

US Says Google Breakup May Be Needed to End Violation of Antitrust Law

Justice Department Hits Google With Antitrust Lawsuit

The US government sues Google for alleged anticompetitive abuses

Google officially charged with antitrust by Justice Department

What Google, Apple, Amazon, and Facebook have at Stake in the Antitrust Fight

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3 Comments

  1. Brian

    Too little too late maybe. They have had a long time to prepare for this. It is the same for a lot of other industries. They gobble up the little to midsized entities then set whatever price they want and do whatever they want with no consequences.

    Reply
  2. Russell Bateman

    Not a legal mind or philosopher, but in my perfect world, ubiquitous services such as YouTube, Facebook and search engines would be under an apolitical, areligious, etc. restriction and allow the rest of us to sort out the lies told for ourselves. I don’t need the arrogant, self-appointed luminaries and would be nannies like Bezos, Gates, etc. “protecting” me from a dubious list of baddies. I’ll figure that out for myself.

    Reply
  3. Big Ed

    I enjoy commenting on various blog stories and the thing that pisses me off the most is the little warning that appears before the comment that says, “Your comment is awaiting moderation”. All comments must be verified for truth-we can’t alloe any lies to get to the people. How damned convenient. I didn’t see anyone worrying about the truth when the crooked Democrats were working their asses off attempting to railroad Trump for Russian collusion and I notice that whenever Trump has a success which will be beneficial to the citizens of the US-it is never allowed to be discussed. In fact, all of the science available says that HCQ, hydroxychloroquine is a very successful treatment for the COVID virus (countries that used it as a sole drug for treatment had 80% fewer deaths per COVID case than countries which did not use it). This means the media is responsible, directly, for about 180,000 of the 223,000 deaths in the US so far and they will still block any suggestion concerning it’s use. Their “fact checkers” accept all of the lies the left tells as truth and automatically reject as lies all of the truths the right tells. I say hang ’em.

    Reply

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