US Justice Department files anti-trust suit against Google for stifling competition

An illuminated Google logo is seen inside an office building in Zurich, Switzerland, December 5, 2018.
An illuminated Google logo is seen inside an office building in Zurich, Switzerland, December 5, 2018. © Arnd Wiegmann, REUTERS

The US Justice Department and 11 states filed an anti-trust lawsuit against Alphabet Inc's Google on Tuesday for allegedly breaking the law in using its market power to fend off rivals. The Big Tech company has already lost similar lawsuits against the European Union.


Google did not immediately respond to a request for comment.

Google, whose search engine is so ubiquitous that its name has become a verb, had revenue of $162 billion (€137 billion) in 2019, more than the nation of Hungary.

Republican Senator Josh Hawley, a vociferous Google critic, accused the company of keeping power through "illegal means" and called the lawsuit "the most important antitrust case in a generation".

The company lost similar legal challenges overseas, when the European Union fined Google a total of $9.2 billion (€7.8 billion) over three different anti-trust cases.

This US lawsuit promises to be the biggest anti-trust case in a generation, comparable to the lawsuit against Microsoft Corp filed in 1998 and the 1974 case against AT&T that led to the break-up of the Bell System.

The Microsoft one was credited with clearing the way for the explosive growth of the internet since the anti-trust scrutiny prevented the company from attempting to thwart competitors.

Lawmakers will ‘take a long time to push through’

Tuesday's federal lawsuit marks a rare moment of agreement between the Trump administration and progressive Democrats. US Senator Elizabeth Warren tweeted on September 10, using the hash tag #BreakUpBigTech, that she wanted "swift, aggressive action".

Shares of Google’s mother company Alphabet rose nearly 1 percent after news the government lawsuit was imminent. There was some doubt in the markets that Washington lawmakers will actually come together and take action, according to Robert Pavlik, chief investment strategist, senior portfolio manager at SlateStone Wealth LLC in New York.

"In order for anything to have real bite, you need Congress, and they want to break them up. But given the fact there’s so much animosity, even though they agree something needs to be done with Big Tech, it’s going to take a long time to push through,” Pavlik told Reuters.

More lawsuits expected

The 11 states that joined the lawsuit all have Republican attorneys general.

More lawsuits could be in the offing since probes by state attorneys general into Google's broader businesses are under way, as well as an investigation of its broader digital advertising businesses. A group of attorneys general led by Texas is expected to file a separate lawsuit focused on digital advertising as soon as November, while a group led by Colorado is contemplating a more expansive lawsuit against Google.

The lawsuit comes more than a year after the Justice Department and Federal Trade Commission (FTC) began anti-trust investigations into four big tech companies: Inc, Apple Inc, Facebook Inc and Google.

Seven years ago, the FTC settled an anti-trust probe into Google over alleged bias in its search function to favour its products, among other issues. The settlement came over the objections of some FTC staff attorneys.

In 2019, two groups of US state attorneys general filed separate anti-trust probes against many Big Tech companies such as Google and Facebook.

The EU fined Google in three different lawsuits in recent years: $1.7 billion in 2019 for stopping websites from using Google's rivals to find advertisers, $2.6 billion in 2017 for favouring its own shopping business in search, and $4.9 billion in 2018 for blocking rivals on its wireless Android operating system.


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