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WASHINGTON — The Justice Department plans to accuse Google of maintaining an illegal monopoly over search and search advertising in a lawsuit to be filed on Tuesday, the government’s most significant legal challenge to a tech company’s market power in a generation, according to officials at the agency.
In its suit, to be filed in a federal court in Washington, D.C., the agency will accuse Google, a unit of Alphabet, of illegally maintaining its monopoly over search through several exclusive business contracts and agreements that lock out competition, said the officials, who were not authorized to speak on the record. Such contracts include Google’s payment of billions of dollars to Apple to place the Google search engine as the default for iPhones.
The agency will argue that Google, which controls about 80 percent of search queries in the United States, struck agreements with phone makers using Alphabet’s Android operating system to pre-load the search engine on their phones and make it hard for rival search engines to become a replacement. By using contracts to maintain its monopoly, competition and innovation has suffered, the suit with argue.
The suit reflects the pushback against the power of the nation’s largest corporations, and especially technology giants like Google, Amazon, Facebook and Apple. Conservatives like President Trump and liberals like Senator Elizabeth Warren have been highly critical of the concentration of power in a handful of tech behemoths.
Attorney General William P. Barr, who was appointed by Mr. Trump, has played an unusually active role in the investigation. He pushed career Justice Department attorneys to bring the case by the end of September, prompting pushback from lawyers who wanted more time and complained of political influence. Mr. Barr has spoken publicly about the inquiry for months and set tight deadlines for the prosecutors leading the effort.
The lawsuit may stretch on for years and could set off a cascade of other antitrust lawsuits from state attorneys general. About four dozen states and jurisdictions have conducted parallel investigations and are expected to bring separate complaints against the company’s grip on technology for online advertising.
A victory for the government could remake one of America’s most recognizable companies and the internet economy that it has helped define since it was founded by two Stanford University graduate students in 1998.
But Google has long denied accusations of antitrust violations and is expected to fight the government’s efforts by using a global network of lawyers, economists and lobbyists. Alphabet, valued at $1.04 trillion and with cash reserves of $120 billion, has fought similar antitrust lawsuits in Europe.
The company says it has strong competition in the search market, with more people finding information on sites like Amazon. It says its services have been a boon for small businesses.
Google didn’t immediately respond to a request for comment.
The lawsuit comes two weeks after Democratic lawmakers on the House Judiciary Committee released a sprawling report on the tech giants that accused Google of controlling a monopoly over online search and the ads that come up when users enter a query.
“A significant number of entities — spanning major public corporations, small businesses and entrepreneurs — depend on Google for traffic, and no alternate search engine serves as a substitute,” the report said. The lawmakers also accused Apple, Amazon and Facebook of abusing their market power.
The scrutiny reflects how Google has become a dominant player in communications, commerce and media over the last two decades. It controls 90 percent of the market for online searches, according to one estimate. That business is lucrative: Last year, Google brought in $34.3 billion in search revenue in the United States, according to the research firm eMarketer. That figure is expected to grow to $42.5 billion by 2022, the firm said.
The lawsuit is the result of an investigation that has stretched for more than a year. Prosecutors have spoken with Google’s rivals in technology and media, collecting information and documents that could be used to build a case.
Source: The NY Times
Keyword: U.S. to Accuse Google of Protecting Illegal Monopoly