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Feds Launch Landmark Antitrust Case Against Google

In a long-anticipated move, the U.S. Department of Justice hit Google with a federal antitrust action on Tuesday, accusing the tech giant of using its dominance over online searches to stifle competition and harm consumers.

WASHINGTON (CN) — In a long-anticipated move, the U.S. Department of Justice hit Google with a federal antitrust action on Tuesday, accusing the tech giant of using its dominance over online searches to stifle competition and harm consumers. 

Filed in Washington, the move has been long in coming amid growing bipartisan hostility toward major U.S. tech companies, including Google, Facebook, Amazon and Apple.

"Google’s practices are anticompetitive under long-established antitrust law,” the 66-page complaint states. “Absent a court order, Google will continue executing its anticompetitive strategy, crippling the competitive process, reducing consumer choice, and stifling innovation."

Texas is among the 11 states that joined the U.S. Department of Justice as plaintiffs Tuesday morning. Back in 2019, Texas Attorney General Ken Paxton announced that he and the 49 other states were looking into Google’s “monopolistic behavior.”

Among other things, Google is accused in the complaint of “locking up” distribution channels and blocking rivals from appearing on their service.  

“Google is so dominant that ‘Google’ is not only a noun to identify the company and the Google search engine but also a verb that means to search the internet,” Associate Deputy Attorney General Ryan A. Shores writes in the 66-page filing.

Shores also notes how the company informs employees in public internal emails about what — and what not — to say when discussing their business practices. 

“‘Words matter. Especially in antitrust law,’” the complaint states, quoting one such email that cautions workers to avoid words like “bundle,” “tie,” “crush,” “kill,” “hurt” or “block” when discussing the power the company has over the market.

The complaint also cites the landmark Sherman Act case USA v. Microsoft in which the tech giant was found nearly two decades ago to have violated antitrust law by “employing anticompetitive means to maintain a monopoly in the operating system market.”  

“Anticompetitive agreements by a high-tech monopolist shutting off effective distribution channels for rivals, such as by requiring preset default status (as Google does) and making software undeletable (as Google also does), were exclusionary and unlawful,” the complaint says. 

Shores urges the court to “enter structural relief as needed to cure any anticompetitive harm,” as well as to enjoin Google from expressing such anticompetitive actions in the future. 

Google derided the lawsuit this morning as "deeply flawed."

"People use Google because they choose to — not because they're forced to or because they can't find alternatives," a spokesman for the company said, promising a fuller statement later in the day.

Though a representative for the Department of Justice did not return a request for comment, the agency touted its efforts in a statement.

The CEO of Google and fellow tech titans facing aggressive questions from both sides of the aisle meanwhile before Congress this past July.

“The evidence seems very clear to me,” Rhode Island Congressman David Cicilline said during the hearing. “As Google became the gateway to the internet, it began to abuse its power. It used its surveillance over web traffic to identify competitive threats and crush them.”

Rhode Island is not among the states suing Tuesday, nor is New York though the Empire State’s attorney general noted in a statement this morning that collaboration is still possible given the states’ ongoing investigation.

"We appreciate the strong bipartisan cooperation among the states and the good working relationship with the DOJ on these serious issues,” New York Attorney General Letitia James said in a press release on behalf of the handful of states. 

Over the years, even President Donald Trump has accused Google of suppressing conservative viewpoints in web searches, showing a partisan bias. The allegation is a popular talking point in conservative circles, despite a lack of evidence. 

Google, whose parent company is Alphabet, denies it engages in anticompetitive behavior. The company acknowledges it is large, with a market capitalization of around $900 billion. But it says far from hurting consumers, it provides important services to consumers while facing plenty of competition from other search engines. 

Google’s business model has also come under fire for its reliance on targeted advertising. The company offers many of its services, like Gmail and its iconic search engine, for free. It makes its money by collecting information about its users for targeted advertising purposes. 

Antitrust regulators in Europe have been more aggressive than their American counterparts in pursuing Google over monopolistic behavior, levying large fines and demanding the company change certain behaviors. 

Regulators there found the company used its app store to push Google-developed apps onto Android users and forced the company to open its app store to more competition. 

Worldwide, Google controls about 90% of all internet searches. Some criticisms of its monopolistic behavior focus on whether the company uses its algorithms and search dominance to push its own products to the top of search results. 

Yahoo, owned by Verizon, and Bing, owned by Microsoft, pale in comparison to Google’s search engine prowess. 

Microsoft was the first major technology company to be hit with an antitrust suit brought by the U.S. government. It began approximately 20 years ago and ended in a settlement between the two parties that stipulated Microsoft would have to share some of its application programming interfaces with third-party vendors. 

The agreement was criticized by many of the state attorneys general involved in the case as not going far enough to curb anticompetitive practices in the technology industry. 

In San Francisco, the Federal Trade Commission recently sued Qualcomm for spiking royalty rates on some its technology while leaning on companies to pay those rates or forfeit the modem chips necessary for their products. 

While U.S. District Judge Lucy Koh ruled for the trade commission, the Ninth Circuit overturned the decision and found Qualcomm’s innovative business practices did not harm consumers. 

The four tech giants summoned to testify before Congress this July are among the top 10 largest companies in the world by market capitalization. Apple is the largest, with a market cap of $1.95 trillion.

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Categories / Business, Government, National, Technology

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