The Department of Justice has filed its long-awaited antitrust lawsuit against the tech giant, Google. The suit alleges that Google has engaged in anticompetitive conduct in an effort to preserve its monopoly in search and search advertising. Google has become so ingrained in American lives and technology that it has left little room for competitors to make any headway in the field.
The lawsuit follows an investigation by the Department of Justice spanning over a year and is the most aggressive U.S. legal challenge to a tech company in over 20 years. The last similar case was filed against Microsoft Corp. in 1998 which eventually resulted in a settlement.
The department alleged that Google, a unit of Alphabet Inc., is maintaining its status as gatekeeper to the internet through an unlawful web of exclusionary and interlocking business agreements that shut out competitors. The government alleged that Google uses billions of dollars collected from advertisements on its platform to pay mobile-phone manufacturers, carriers and browsers, like Apple Inc.’s Safari, to maintain Google as their preset, default search engine.
The lawsuit also took aim at arrangements in which Google’s search application is preloaded, and can’t be deleted, on mobile phones running its popular Android operating system. The government alleged Google unlawfully prohibits competitors’ search applications from being preloaded on phones under revenue-sharing arrangements.
Google owns or controls search distribution channels accounting for about 80% of search queries in the U.S., the lawsuit said. That means Google’s competitors can’t get a meaningful number of search queries and build a scale needed to compete, leaving consumers with less choice and less innovation, and advertisers with less competitive prices, the lawsuit alleged.
Google’s defense against critics of all stripes has long been rooted in the fact that its services are largely offered to consumers at little or no cost, undercutting the traditional antitrust argument around potential price harms to those who use a product.
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It’s unlikely that the major tech company will shrink from the lawsuit as they currently sit on top of an over $120 billion empire. However, if Google is handed a loss in the suit the company could be facing court-ordered changes that could open up the field for more competitors.