Bengaluru, NFAPost: The US justice department filed a lawsuit in Washington DC against Google on Tuesday, accusing the global tech giant of abusing its position to maintain an illegal monopoly over search and search advertising.
“Two decades ago, Google became the darling of Silicon Valley as a scrappy startup with an innovative way to search the emerging internet. That Google is long gone,” the suit alleged.
According to tech analyst, Google has become a “monopoly gatekeeper for the internet” that has used “pernicious” anticompetitive tactics to maintain and extend its monopolies.
The litigation marks the government’s most significant act in tech legal tangle history to protect competition since its groundbreaking case against Microsoft more than 20 years ago.
Market for search
According to a report from a House Judiciary subcommittee states Google has monopoly power in the market for search. The company succeeded in achieving this in several markets through acquisition and successfully integrating technologies that other businesses had developed. Google succeeded in integrating an estimated 260 companies in 20 years by various acquisition methods.
The antitrust suit is the most significant legal challenge to tech company whose corporate parent Alphabet Inc. which has a market value just over $1 trillion. It is a reality that going forward US authorities are increasingly critical of the business practices of the major tech companies.
The long-awaited case alleges that Google unfairly acts as a gatekeeper to the web through a series of business agreements that effectively lock out competition.
The move is viewed as a major government antitrust actions at a time when there is ongoing investigations are progressing against major tech companies including Apple, Amazon and Facebook at both the Justice Department and the Federal Trade Commission.
As per the decision, justice officials have also challenged an arrangement in which Google’s search application is preloaded without allowing users to delete from their mobile which are running on Android operating system. The suit states that the company pays billions each year to various hardware makers to secure default status for its general search engine and, in many cases, to specifically prohibit Google’s counterparties from dealing with Google’s competitors.
Google’s alleged anticompetitive practices are “especially pernicious because they deny rivals scale to compete effectively,” and thwart potential innovation, the suit alleged.
The Mountain View-headquartered company has been denying the claims of unfair competition. In a statement, Google called the suit deeply flawed. “People use Google because they choose to – not because they’re forced to or because they can’t find alternatives,” the company said.
“This 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,” states the company.
Google dominates online search in the US, accounting for about 80% of search queries. The suit marks a stunning reversal for Silicon Valley which has largely avoided clashes with Washington even as European regulators have levied huge fines against Google and others.
European regulators have fined Google a total of $9 billion for anti-competitive practices. In 2018 Donald Trump attacked the EU decisions. “I told you so! The European Union just slapped a Five Billion Dollar fine on one of our great companies, Google,” Trump tweeted. “They truly have taken advantage of the US, but not for long!”
Since then the mood has changed with both Trump and other conservatives joining liberals including senators Elizabeth Warren and Bernie Sanders in attacking the dominance of tech firms including Amazon, Google, Facebook and others.
The charges mark the first time since the famous Microsoft lawsuit of 1998 that the US government has accused a company of operating a monopoly under the Sherman Act, a law that dates back to 1890 encouraging competition between enterprises.
In the suit the government lawyers point out that Google was among those who argued Microsoft’s practices were anticompetitive, “and yet, now, Google deploys the same playbook to sustain its own monopolies”.
But the justice department said Google’s parent company Alphabet had learned one thing from the Microsoft case. “Referring to a notorious line from the Microsoft case, Google’s chief economist wrote: ‘We should be careful about what we say in both public and private. ‘Cutting off the air supply’ and similar phrases should be avoided.’”
Google’s employees have also “received specific instructions on what language to use (and not use) in emails,” the suit claimed. Google employees were instructed to avoid using terms such as “crush,” “kill,” “hurt,” or “block” competition, and to avoid observing that Google has “market power” in any market.
Google has $120 billion in cash and deep political ties in Washington. The case will take years before any decision is reached and will likely set off a cascade of other legal actions. Attorneys general across the US are already investigating the company and the justice department is conducting a separate investigation into Google’s ad-tech practices.Advertisement