The American Justice Department has sued Google for violating anti-trust laws. The suit was officially filed on Tuesday in the District of Columbia.
The law suit was joined by 11 states. It accuses Google of entering into exclusive arrangements with Apple and other large companies which harmed competition in the search engine advertising industry. By colluding with others to block competition Google harmed consumers by limiting their choices, the suit states.
So think of it this way: You probably only ever go to Google for your searchers. And like almost everyone else you never go beyond the first page.
On that page you see ads across the top and along the side. While the search results are based solely on Google’s algorithms, these ads are bought and paid for by various companies. If these companies make special deals with Google for the advertising space then they prevent other smaller businesses from having a chance to advertise there.
Such collusion, in the end, harms consumers who do not see possible lower prices offered by competitors.
The suit states, “For the sake of American consumers, advertisers, and all companies now reliant on the internet economy, the time has come to stop Google’s anticompetitive conduct and restore competition.”
“Countless advertisers must pay a toll to Google’s search advertising and general search text advertising monopolies,” it adds.
“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.”
Attorney General Bill Barr said in a statement, “The end result (of Google’s control over the market) is that no one can feasibly challenge Google’s dominance in search and search advertising. This lack of competition harms users, advertisers, and small businesses in the form of fewer choices, reduced quality (including on metrics like privacy), higher advertising prices, and less innovation.”
Google responding with a statement of its own in a blog post. The company points out that no one is forced to use the Google search engine – they choose to do so.
It described the suit as a “deeply flawed” and that it would not help shoppers.
“This lawsuit would do nothing to help consumers,” asserts Google. “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.”
In its defense Google states that the Justice Department is engaging in “dubious antitrust arguments” to attack its work at making internet searches easily available to people.
The company points out that it engages in the same business practices as other enterprises. Google compared its practices to soda or cereal companies paying supermarkets to stock more of their products and to place them in prominent positions.
Google also cites the fact that Microsoft controls the access to desktop computers, Apple to all of the iPhones, and the cell phone companies and manufacturers to the phones which use its Android operating system.
“So, we negotiate agreements with many of those companies for eye-level shelf space,” Google explains. But let’s be clear—our competitors are readily available too, if you want to use them.”
“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. “
It is not yet clear what remedies the DOJ will be seeking from the courts should it prove its case. Google could be fined or be forced to sell off parts of its business in the same way that AT&T lost its telephone monopoly four decades ago.
One thing that all of the pundits seem to agree on is that this is not just about Google. The suit is also a shot across the bow of all of the huge conglomerates out there who must be concerned right now with the outcome of this case.
The headline in England’s Guardian reads, Washington’s crackdown on Google is the greatest threat yet to Big Tech.”
Should Google lose, who’s next?