The Justice Department filed suit against Google on Tuesday for illegal monopolization of the search and ad markets, kicking off one of the largest antitrust cases in US history. As first reported by The Wall Street Journal, the case focuses on search and search-focused advertising, rather than the company’s broader targeted ad business.
“Countless advertisers must pay a toll to Google’s search advertising and general search text advertising monopolies,” the complaint reads, “American consumers are forced to accept Google’s policies, privacy practices, and use of personal data; and new companies with innovative business models cannot emerge from Google’s long shadow.”
“NEW COMPANIES WITH INNOVATIVE BUSINESS MODELS CANNOT EMERGE FROM GOOGLE’S LONG SHADOW”
In a call this morning, Justice Department officials emphasized the scale and power of Google’s control over the search market. “Google’s conduct is illegal under traditional antitrust principles and must be stopped.... Google owns or controls search distribution channels accounting for about 80 percent of general search queries in the United States,” said Ryan Shores, the Justice Department’s senior advisor for tech industries. “We’re asking the court to break Google’s grip on search distribution so that competition and innovation can take hold.”
Google disagrees, insisting that its high share of the search market is the result of consumer choice. “Today’s lawsuit by the Department of Justice is deeply flawed,” the company said in a statement. “People use Google because they choose to — not because they’re forced to or because they can’t find alternatives.
The case is one of the most ambitious antitrust actions ever undertaken against a tech company, drawing together parallel investigations from the Department of Justice and a range of state attorneys general. The Department of Justice briefed state AGs on the case at the end of September, according to a report from The Washington Post. Eleven different state attorneys general are expected to sign onto the case, per the Journal, but others are likely to file separate antitrust charges.
Google has faced antitrust action before, but never on this scale. The most significant investigation concluded in 2013, when the company changed its AdSense policies to resolve a Federal Trade Commission investigation without formal legal action. Google has also faced a string of fines from regulators in the European Union, including €1.5 billion over its AdSense policy, €4.3 billion over software bundling in Android, and €2.4 billion for manipulating shopping results in Google search.
Google drew significant criticism from lawmakers at Congress’ tech antitrust hearing in July, suggesting the company may have few allies left in Washington. In opening remarks, Rep. David Cicilline (D-RI) accused the company of using its privileged position as a search engine to crush competitors in other areas. “It is Google’s business model that is the problem,” Cicilline said. “Our documents show that Google evolved from a turnstile to the rest of the web to a walled garden that increasingly keeps users within its sites.”
At the time, Google CEO Sundar Pichai defended the company’s actions as part of a broader commitment to serving users. “When I run the company, I’m really focused on giving users what they want,” Pichai said. “We conduct ourselves to the highest standard.”
Update 10:31AM ET: Updated with statements from Google and the Justice Department.
Update 10:49AM ET: Updated with the official Justice Department complaint.