Google in sights of anti-trust sleuths

US Justice Department prepares an anti-trust investigation of Google that would examine its search business.

Google’s dominance in the search arena has brought it under intense scrutiny by regulators in the US and abroad. Picture: AP

The US Justice Department is gearing up for an anti-trust investigation of Google, a move that could present a new layer of regulatory scrutiny for the search giant, according to people familiar with the matter.

The department’s anti-trust division in recent weeks has been laying the groundwork for the probe. The Federal Trade Commission, which shares anti-trust authority with the department, previously conducted a broad investigation of Google but closed it in 2013 without taking action, though the US tech giant made some voluntary changes to certain business practices.

The commission and the ­department have been in talks on who would oversee any new anti-trust investigation of the tech giant, and the commission agreed to give Justice jurisdiction over Google. With turf now settled, the department is preparing to examine Google’s business practices related to its search and other businesses.

A Justice investigation would put Google — and potentially other tech giants — in an unwanted spotlight at a time when internet companies have seen their political fortunes turning.

The shift has come with multibillion-dollar anti-trust fines for Google from the EU. Facebook has come under fire over Russian use of its platform to meddle in the 2016 US election. Policy makers also are increasingly sceptical of internet companies’ privacy practices, as well as their potential to create other public harm.

Alphabet, Google’s parent, is ranked among the world’s five largest firms by market capitalisation, nourished by its powerful position in online advertising. Along with Facebook, it has ­become a player in the complex market. But other firms — ­notably Amazon — also have begun to compete for the business, raising competitive concerns for Google.

Increasingly, US leaders have begun to question the size and dominance of some of the tech ­giants. Democratic presidential candidate Elizabeth Warren called for the break-up of the top tech companies earlier this year, sending tremors through the large field of contenders for the party’s nomination and winning praise from liberal activists — as well as from Steve Bannon, a former strategist for Donald Trump.

Others candidates, such as Amy Klobuchar, a leading Democrat on anti-trust issues, haven’t gone that far, but they have called for more scrutiny of big tech.

Some Republicans also have linked the companies’ size and ­influence to alleged stifling of conservative speech online — a charge the companies deny.

But Google would be a daunting foe for anti-trust enforcers. Despite growing public concern about dominance by a few Silicon Valley giants, Google’s products remain popular with consumers, and the company has spent years developing a support network in Washington. It has been a funder of dozens of non-profit groups active on anti-trust issues across the political spectrum, including the American Anti-trust Institute as well as several conservative think tanks.

The Federal Trade Commission created high expectations in its earlier Google investigation, but the company emerged largely unscathed. Some commission staff raised a variety of concerns internally about Google practices they believed to be anti-competitive, but they also said Google had strong pro-competitive justifications for its actions and was ­focused on delivering services consumers liked.

The “evidence paints a complex portrait of a company working toward an overall goal of maintaining its market share by providing the best user experience, while simultaneously engaging in tactics that resulted in harm to many vertical competitors, and likely helped to entrench Google’s monopoly power over search and search advertising”, one 2012 commission staff memo said.

The rise of big tech has seen three corporate titans that didn’t exist 30 years ago — Amazon, Google, and Facebook — suddenly amassing the power to sway large parts of the US economy and society, from the stock market to political discourse, from personal shopping habits to how small businesses sell their wares.

With their enormous size and dominance have come network advantages, data caches and economies of scale that can make it challenging for new rivals to succeed. Many firms that compete with those giants in one sector also depend on their platforms to reach customers, and they complain of being unfairly squeezed.

Supporters of the big tech companies say there is so much dynamism in the sector that the giants are sure to be knocked off soon. Anti-trust leaders at the Justice Department and the commission had publicly acknowledged the competition concerns and said those issues merited close attention.

The Wall Street Journal