The United States’ Department of Justice (DOJ), along with 11 states' Attorneys General, has officially filed one of the largest antitrust lawsuits ever against Google today; sources that talked to The Wall Street Journal pre-empted the announcement this morning as well. The case has been building for months now, so it shouldn’t come as much of a surprise to the tech giant.
The DOJ’s case will allege that Google is “maintaining its status as gatekeeper to the internet through an unlawful web of exclusionary and interlocking business agreements that shut out competitors,” WSJ’'s sources said.
Deputy Attorney General Jeffrey Rosen held a virtual press conference at 9:45 a.m. E.T. this morning about “an antitrust announcement.” The DOJ tweeted this morning to announce the briefing, which confirmed many of the suspected details of the case.
The case claims that Google's practices are in violation of Section 2 of the Sherman Act, legislation enacted in 1890 to put a damper on monopolization attempts.
"We could lose the next wave of innovation," Rosen said in this morning's press briefing. "Americans may never get to see the next Google."
Google and other big tech companies have built their empires on ruthless business tactics — and it’s worked flawlessly, until now. This case could challenge Google’s internet supremacy and send waves through the tech industry at large. Apple, Facebook, and Amazon will all be paying close attention because the outcome of this lawsuit could set precedents that affect their businesses, too.
Ads and searches, a match made in heaven — The antitrust lawsuit will focus for the most part on the bedrock of Google’s business: the search tool. Google owns or controls a staggering 80 percent of search queries in the U.S., according to DOJ officials.
Here’s the problem: Google makes absolutely massive amounts of money through advertisements served through the search tool. The company then uses those piles of cash to pay phone manufacturers and browser-makers to make Google their default search engine. This then makes Google even more money, which can be used to pay for even more favors — it’s a cycle that could continue indefinitely, making Google richer all the while, unless an outside power cuts it off.
The DOJ's official complaint alleges that Google has unlawfully monopolized these industries by means of:
• Entering into exclusivity agreements that forbid preinstallation of any competing search service.
• Entering into tying and other arrangements that force preinstallation of its search applications in prime locations on mobile devices and make them undeletable, regardless of consumer preference.
• Entering into 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.
• Generally using monopoly profits to buy preferential treatment for its search engine on devices, web browsers, and other search access points, creating a continuous and self-reinforcing cycle of monopolization.
The moment we’ve been waiting for — The DOJ has been open about its investigations into big tech’s business practices, with the investigations more than a year old. There have been several false alarms when media outlets claimed the suit would be served soon, as well as a long, live-streamed Congressional hearing this summer.
Google is facing similar investigations from abroad, too. The E.U. this summer launched an official antitrust probe into the company’s acquisition of Fitbit, though no charges have yet been brought in that case. But being probed from all sides for this long has definitely kept Google on its toes.
What happens next? — Google has deep, deep pockets, and the ability to hire some of the world's finest legal minds, so you can bet the company isn’t going to back down in the face of government scrutiny. After all, it’s had plenty of notice to work on its defense strategy. A big part of Google’s defense has always been the well-worn message that, by offering many of its services for free, its supremacy is actually for the good of the general public.
There’s a good chance this argument won’t hold up against a prolonged court battle. If Google ends up losing the case, it could mean the company is forced to change its ways to comply with the ruling. Google would likely be forced to create more openings for competition, for one thing.
The ruling is also likely to affect other antitrust cases, like the one against Facebook. But it may be years until we have any closure on this one.
You can read the full text of the DOJ's complaint against Google here, via The Verge.