The Trump administration has sued Google in what is now the largest antitrust case against a technology company in more than two decades.
In the government's complaint, the Justice Department makes
allegations that Google (GOOG) has stifled competition to maintain its powerful
position in the marketplace for online search and search advertising.
Eleven states joined the Justice department in the suit,
namely:-- Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana,
Mississippi, Missouri, Montana, South Carolina and Texas.
According to the complaint Google performed actions that
harmed competition and prevented rivals from gaining a meaningful audience.
Allegations include that Google pays billions of dollars a
year to device manufacturers like Apple, LG, Motorola, and Samsung and browser
developers like Mozilla and Opera to be their default search engine and in many
cases to prohibit them from dealing with Google's competitors.
The suit says; "Google effectively owns or controls
search distribution channels accounting for roughly 80 percent of the general
search queries in the United States."
Justice Department officials even warn that Google could be
broken up.
"Nothing is off the table," said Deputy Attorney
General Jeffrey Rosen, who warned that if DOJ did not file suit now, "we
could lose the next wave of innovation" and that "Americans may never
get to see the next Google."
Google has now responded to the lawsuit.
"Today's lawsuit by the Department of Justice is deeply
flawed," Google SVP Global Affairs and Chief Legal Officer Kent Walker
wrote in a blog post.
"People use Google because they choose to, not
becausethey're forced to, or because they can't find alternatives."
The post goes on to say that the DOJ complaint "relies
on dubious antitrust arguments" that "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," Walker wrote.
Google said its practice of paying to be the default search
engine on smartphones like Apple's is "no different" from moves by
other businesses to promote their products, "just like a cereal brand
might pay a supermarket to stock its products at the end of a row or on a shelf
at eye level."
Rosen also added that the Google suit represents a
"milestone" but not the end of DOJ's wide-ranging review of the tech
industry, and that other lawsuits could be filed "where necessary."
The landmark federal complaint comes on the heels of a major
congressional report finding that Google and other tech giants enjoy
"monopoly power" and have wielded their dominance in anticompetitive
ways. The congressional report alleges
that Amazon has mistreated third-party sellers; that Apple's app store fees and
policies are anti-competitive; and that Facebook has sought to eliminate future
rivals through targeted acquisitions.
Some US states have been conducting a separate antitrust
inquiry into Google for the past year and on Tuesday said they intend to wrap up
that probe "in the coming weeks" and that if they file a lawsuit, it
could be merged with the federal case.
"We appreciate the strong bipartisan cooperation among
the states and the good working relationship with the DOJ on these serious
issues," said the multi-state group, which includes Colorado, Iowa,
Nebraska, North Carolina, Tennessee and Utah. "This is a historic time for
both federal and state antitrust authorities, as we work to protect competition
and innovation in our technology markets."
The suit could pose an unprecedented risk to Google's wider
advertising business, which brought in $134.8 billion in revenue last year,
accounting for 84% of Google's total business.
Officials at the Federal Trade Commission have been
investigating Facebook for over a year, and that investigation could culminate
in its own landmark litigation.
The Google suit also symbolizes the growing criticism,
particularly by former Democratic presidential candidates including Sens.
Elizabeth Warren and Amy Klobuchar, against historic levels of economic
inequality and corporate concentration in the United States.
Trump has repeatedly blasted Facebook, Google and Twitter
for allegedly systematically censoring conservative views, a claim the
companies deny and for which experts have found no evidence.
Last year, Trump told Fox Business that "we should be suing Google and Facebook and all that, which perhaps we will, okay?"
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