US Department of Justice files antitrust lawsuit that ‘strikes at heart’ of Google

The US Justice Department and 11 states have come out swinging against Google in a case that seeks to end the company’s dominance.

US tech giant Google is facing a lawsuit from the US Department of Justice that could end the company’s dominance of online search and may even see it broken up.

The case is the latest in a number of battles the tech giant is facing around the world from Europe to Australia over its market dominance.

The US Department of Justice suit, filed on Tuesday, accuses the company of violating antitrust laws in search and advertising markets.

The 64-page document claims the company sought to maintain a monopoly on search and is filed on behalf of the US Department of Justice and 11 state Atttorney Generals from Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas.

“Today, millions of Americans rely on the internet and online platforms for their daily lives. Competition in this industry is vitally important, which is why 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 William Barr said.

“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.”

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The US government is suing Google in the biggest antitrust case in decades. Picture: Denis Charlet/AFP

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ROAD TO BECOMING INTERNET BEHEMOTH

The documents allege that Google’s role as a “scrappy start-up” is long gone as it is now one of the wealthiest companies on the planet, valued at $US1 trillion ($A1.4 trillion).

The Department of Justice claims Google has entered into exclusionary agreements with mobile phone providers that essentially control the way people access the internet, by ensuring that Google is the default search engine on phones and computers around the world.

The company is accused of entering “long-term agreements with Apple that require Google to be the default – and de facto exclusive – general search engine on Apple’s popular Safari browser and other Apple search tools,” the statement said.

The agency claims such behaviour reduces the ability of companies to innovate and has harmful effects on consumers by reducing their options and providing them with poorer outcomes as a result.

However Google’s senior vice president of global affairs Kent Walker hit back at the suit, calling it “deeply flawed”.

“People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives,” he 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.”

He argued Google’s tactics were no different to stocking certain products at “eye level” in a supermarket and said it was missing the main point about US consumer behaviour.

“The bigger point is that people don’t use Google because they have to, they use it because they choose to.

“This isn’t the dial-up 1990s, when changing services was slow and difficult and often required you to buy and install software with a CD-ROM. Today, you can easily download your choice of apps or change your default settings in a matter of seconds – faster than you can walk to another aisle in the grocery store.” he said.

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Google argues that people aren’t forced to use its search engine, but they choose to. Picture: Fabrice Coffrini/AFP

CALLS FOR ‘STRUCTURAL CHANGE’

US authorities have had Google and other tech giants like Apple and Facebook in their sights for years. The government has also called for “structural” change which could ultimately see the company broken up if it proves successful.

The tech giant is also facing legal fights in Europe and Australia over compensation for media outlets.

In Europe, Google has come under Brussels’ scrutiny three times in recent years for anticompetitive practices, ordered to pay billions of euros in fines in three separate cases which are all before European courts.

In August, the EU opened up a new front against Google with an “in-depth” probe into its acquisition of fitness wearables maker Fitbit that regulators fear would further buttress its dominance of the online advertising market.

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‘How much market concentration do we want to tolerate?’ asks ACCC chair Rod Sims. Picture: Gary Ramage/NCA NewsWire

PAYING FOR CONTENT

Meanwhile media organisations, including News Corp Australia, publisher of news.com.au, have accused the company of profiting from news content without paying their fair share.

In March last year, the European parliament adopted a directive on so-called “neighbouring rights” that calls for the tech giants to pay publishers.

France implemented the law immediately and was challenged in court by Google. But judges recently upheld a decision that required the company to enter into talks with publishers over neighbouring rights.

Since then, Google has said it is close to a deal with one of its opposite numbers in the French press, and has also announced a program to pay publishers around the world through a licensing system.

In July, the Australian Government unveiled a binding “code of conduct” that would require digital giants to pay media for their content and to increase transparency around the algorithms used to rank content in news feeds and search results – on pain of significant fines.

On Wednesday, Australian Competition and Consumer Commission (ACCC) chair Rod Sims said Australia also needed to think about how to reshape company behaviour more broadly in light of the recession and disruption created by the COVID-19 pandemic.

“There is no doubt that Facebook and Google achieved their dominant market positions in search and social media essentially by excellent and beneficial innovation,” he told the National Press Club in a speech.

“But how much stronger and more entrenched is Facebook with its very many and continuing acquisitions, including Instagram and WhatsApp; and Google with its numerous acquisitions including YouTube and the digital advertising intermediary Doubleclick?

“We need as a society to ask how much market concentration do we want to tolerate?”

– with wires