US govt sues Google over alleged antitrust violations

It says tech giant illegally uses market muscle to cripple rivals; suit's timing may be political

Google has nearly 90 per cent of all general search engine queries in the US and almost 95 per cent of searches on mobile, said the US Justice Department, in its lawsuit. PHOTO: NYTIMES
Google has nearly 90 per cent of all general search engine queries in the US and almost 95 per cent of searches on mobile, said the US Justice Department, in its lawsuit. PHOTO: NYTIMES

WASHINGTON • The United States has sued Google, accusing the US$1 trillion (S$1.36 trillion) Internet giant of illegally using its market muscle to hobble rivals, in the biggest challenge to the power and influence of Big Tech in decades.

The Justice Department lawsuit could lead to the break-up of an iconic company that has become all but synonymous with the Internet. The case may take years to resolve.

Tuesday's lawsuit marks the first time the US has cracked down on a major tech firm since it sued Microsoft over anti-competitive practices in 1998.

The federal government's complaint against Google's parent, Alphabet Inc, alleges that Google acted unlawfully to maintain its position in search and search advertising on the Internet. The complaint was joined by 11 states.

"Absent a court order, Google will continue executing its anti-competitive strategy, crippling the competitive process, reducing consumer choice and stifling innovation," the lawsuit states.

It said Google has nearly 90 per cent of all general search engine queries in the US and almost 95 per cent of searches on mobile.

Attorney-General Bill Barr said his investigators had found Google does not compete on the quality of its search results but bought its success through payments to mobile phone makers and others.

"The end result is that no one can feasibly challenge Google's dominance in search and search advertising," he said.

In its complaint, the Justice Department said Americans were hurt by Google's actions, adding that it was seeking "structural relief as needed to cure any anti-competitive harm". "Structural relief" in antitrust matters generally means the sale of an asset.

"Ultimately, it is consumers and advertisers that suffer from less choice, less innovation and less competitive advertising prices," the lawsuit states.

"So we are asking the court to break Google's grip on search distribution so the competition and innovation can take hold."

Google called the lawsuit "deeply flawed", adding that people "use Google because they choose to - not because they're forced to or because they can't find alternatives".

Investors seemed to shrug off news of the lawsuit, sending Alphabet shares up 1.4 per cent to US$1,551 at the close on Tuesday.

"It's like locking the proverbial door after the horse has bolted," said Mr Neil Campling, head of tech media and telecom research at Mirabaud Securities in London. He added Google has already invested billions of dollars in infrastructure, technologies and talent.

"You can't simply unwind a decade of significant progress."

The timing of the suit, just days before the Nov 3 presidential election, could be seen as a political gesture since it fulfils a promise President Donald Trump made to his supporters to hold firms to account for allegedly stifling conservative voices.

Republicans often complain that social media firms including Google take action to reduce the spread of conservative viewpoints on their platforms. Lawmakers have sought, without explaining how, to use antitrust laws to compel Big Tech to stop these alleged limitations.

The complaint also pointed to the billions of dollars that Google pays to smartphone makers such as Apple, Samsung and others to make Google's search engine the default on their devices. This means that rival search engines never get the scale they need to improve their algorithms, and grow, it said.

Google has faced similar legal challenges overseas.

The European Union fined Google US$1.7 billion last year for stopping websites from using Google's rivals to find advertisers, US$2.6 billion in 2017 for favouring its own shopping business in search, and US$4.9 billion in 2018 for blocking rivals on its wireless Android operating system.

REUTERS

A version of this article appeared in the print edition of The Straits Times on October 22, 2020, with the headline 'US govt sues Google over alleged antitrust violations'. Print Edition | Subscribe