The Justice Department has filed an antitrust lawsuit against Google after the search giant has been under investigation for more than a year.

The lawsuit filed is allegedly due to Google “unlawfully maintaining monopolies in the markets for general search services, search advertising, and general search text advertising in the United States”, according to the Attorney General William Barr, in conjunction with attorney generals from eleven states. 

Justice is best served in a lawsuit.

The fifty-eight-page suit filed under the Sherman Act – which deals with monopolies – seeks to restrain Google and solutions for the effects the search giant has conducted thus far. These solutions can be in the form of fines, enforcing divestment or enforcing a chance in business. 

The last technology company that received this level of scrutiny from the U.S government was Microsoft back in 1992. It’s been debated that the actions against Microsoft reshaped the technology industry and in fact set the stage for Google and its peers to bloom. Ironically, Google’s is now in the hot seat. 

The dominant position Google has in search and search-advertising sits at the core of the company’s extensive advertising, video distribution and data mining. This lawsuit would be the first significant legal challenge that Google has to face from the U.S. regulators. 

What does Google think?

Google initially responded with a blog post titled: “ A deeply flawed lawsuit that would do nothing to help consumers” – no surprise. According to Kent Walker, the SVP of Global Affairs, the DoJ’s lawsuit is “…deeply flawed. People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives.”

Google has always denied accusations of antitrust violations, and the company is not going down without a fight. They are expected to fight this lawsuit by using its global network of layers, economics and lobbyists. Alphabet, Google’s parent company which is valued as $1.04 trillion and has cash reserves of $120 billion, has fought similar antitrust lawsuits in Europe. 

Walker further goes on to say that the 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 DOJ stated in the lawsuit that Alphabet’s Google subsidiary shuts out competitors by using a web of exclusionary business agreements. The billions of dollars that Google makes is used to pay mobile phone companies and carriers to be the default search engine. This blocks their competitors from being able to access the kinds of traffics and queries they would need to refine their own search engine. 

“Our agreements with Apple and other device makers and carriers are no different from the agreements that many other companies have traditionally used to distribute software. Other search engines, including Microsoft’s Bing, compete with us for these agreements. And our agreements have passed repeated antitrust reviews,” states Walker. Additionally, the blog post features the various ways users have the option to change their search engine, the example below.

(Image Source: Google Blog, 2020)
(Image Source: Google Blog, 2020)

Many other executives from rival companies are already weighing in on the lawsuits. Gabriel Weinberg, the chief executive of rival search company DuckDuckGo, took to Twitter to support the DoJ. 

Another big company Yelp! Has done more than to call attention to the ways Google’s products exist within a self-promotional garden, which was also weighed in on the suit. 

“By systematically reducing the quality of its search results in order to entrench and extend its search and search advertising monopolies, Google is directly harming consumers,” Yelp wrote in a statement. “Yelp applauds the work of the DOJ and encourages swift action by state attorneys general who are conducting parallel investigations into other aspects of Google’s business.”

(Image Source: TechCrunch, 2020)

Why do we care?

Although this does not directly affect us or our clients, this lawsuit can cause a spark in other countries who may decide to take Google to court for the same reason, ultimately resulting in a snowball effect. If the government is victorious, it would remake one of America’s most recognisable companies and the internet economy, which the U.S. has helped define since it was founded in 1998.

In the end, we stand by Google and their focus on delivering free services that help the world of local businesses at large, because ultimately that is what matters most. 

Tags: ,


Stay In The Know


Cut the clutter and stay on top of important news like this. We handpick the single most noteworthy news of the week and send it directly to subscribers. Join the club to stay in the know…

Leave a reply

Your email address will not be published. Required fields are marked *