US hits Google with landmark antitrust lawsuit
US’s landmark action, alleging Google uses its search engine to create monopolies, has potential implications for other tech giants.
The US Department of Justice has filed a landmark antitrust lawsuit against Google alleging that the tech giant used its search engine to create monopolies and undermine rivals.
The historic move has enormous potential implications for other tech giants like Facebook and Amazon and sets up a major battle between Washington and Silicon Valley.
It is the culmination of growing anger in Washington over the lack of regulation covering Google’s operations as the company amassed power through a lucrative system of search advertising.
“Absent a court order, Google will continue executing its anti competitive strategy, crippling the competitive process, reducing consumer choice, and stifling innovation,” the DOJ said.
“For the sake of American consumers, advertisers, and all companies now reliant on the internet economy, the time has come to stop Google’s anticompetitive conduct and restore competition.”
The DOJ alleges that Google used its murky business practices to capture almost 90 per cent of all search queries in the US and that this “grip on distribution” has stymied other search engines from competing.
“Ultimately it is consumers and advertisers that suffer from less choice, less innovation and less competitive advertising prices,” the lawsuit states. “So we are asking the court to break Google’s grip on search distribution so the competition and innovation can take hold.”
The lawsuit, the biggest antitrust case in a generation, does not rule out the possibility of a break-up of the $US1 trillion company.
“Nothing is off the table but a question of remedies is best addressed by the court after it’s had a chance to hear all the evidence,’ the lawsuit states.
Google is alleged to have used the funds gained from its dominance of search advertising to pay a raft of browsers and mobile-phone makers to use Google as their default search engine.
This enables Google to remain far and away the main search engine used by the majority of Americans.
Google hit back against the news, with a spokesman saying: “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.”
In a statement the company said: “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 action against Google comes as part of a wide-ranging antitrust review of tech giants announced by the Trump administration in July.
The move is the first major US government action against a US tech giant since it took antitrust action against Microsoft in 1998.
The lawsuit against Google marks a much tougher approach to the tech giants in the US. Historically Washington has allowed the Silicon Valley companies to grow without serious regulation or oversight believing that such moves would stifle innovation.
This softer approach has been in marked contrast to Europe which has launched a series of tough actions against Google for anti-competitive practices with the European Union fining the company more than $US9 billion.
News Corp, owner of The Australian, has complained to antitrust authorities in Australia and in the US about Google’s search practices and its dominance in digital advertising.
Australian competition watchdog head Rod Sims called the lawsuit “extremely significant”.
“It’s probably one of the major anti-trust cases of the last 25 years,” he told ABC radio.
He said the Australian Competiton and Consumer Commission had been looking at the same issues and had been talking to the US Department of Justice “a lot”.
“It’s absolutely fascinating this action has now been taken,” Mr Sims said.
Deputy US Attorney General Jeffrey Rosen said the lawsuit was a “milestone” in the DOJ’s efforts to promote greater competition on the internet.
He said Google “has maintained its monopoly power through exclusionary practices that are harmful to competition. Google is the gateway to the internet and a search advertising behemoth,” he said.
Mr Rosen said the lawsuit was not related to Donald Trump’s calls for shake-up of search engine practices to prevent the stifling of conservative voices on the internet.
(Cameron Stewart is also US Contributor for Sky News Australia)
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