U.S. Government Sues Google For Anticompetitive Practices With Its Search Engine And Ad Products

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The United States government has filed an antitrust lawsuit against Google, accusing it of anti-competitive practices and abusing its market domination in online search and advertisement.

U.S. Government Takes Google To Court In Antitrust Lawsuit

The lawsuit has been filed in 11 states, including Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina, and Texas. The complaint states:

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The United States of America, acting under the direction of the Attorney General of the United States, and the States of Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina, and Texas, acting through their respective Attorneys General, bring this action under Section 2 of the Sherman Act, 15 U.S.C. § 2, to restrain Google LLC (Google) from unlawfully maintaining monopolies in the markets for general search services, search advertising, and general search text advertising in the United States through anticompetitive and exclusionary practices, and to remedy the effects of this conduct.

The details in the lawsuit talk about how Google's default status on various devices and browsers, scale, exclusive deals, and control over distribution channels for search engines, support its anti-competitive practices and prevent competitors from succeeding.

The lawsuit also mentions Google's role during the antitrust lawsuit against Microsoft, and how it's following the same practices that Microsoft did back then. However, Google does this in a smarter way and tries to avoid any words in verbal or written communication that can be used against it.

Back then, Google claimed Microsoft’s practices were anticompetitive, and yet,
now, Google deploys the same playbook to sustain its own monopolies. But Google did learn one thing from Microsoft—to choose its words carefully to avoid antitrust scrutiny. 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.” Moreover, as has been publicly reported, Google’s employees received specific instructions on what language to use (and not use) in emails because “Words matter. Especially in antitrust law.” In particular, Google employees were instructed to avoid using terms such as “bundle,” “tie,” “crush,” “kill,” “hurt,” or “block” competition, and to avoid observing that Google has “market power” in any market.

The full 64-page lawsuit document can be read here.

Google's Response To The Lawsuit

Google has provided a detailed response to the lawsuit on its blog, and calls it flawed and dubious. Its stance is that the lawsuit does not help customers, and will instead increase phone prices, which are currently subsidized by its search engine ads revenue. It also defended its practice of promoting its search engine, like any other product's promotion.

Yes, like countless other businesses, we pay to promote our services, just like a cereal brand might pay a supermarket to stock its products at the end of a row or on a shelf at eye level. For digital services, when you first buy a device, it has a kind of home screen “eye level shelf.” On mobile, that shelf is controlled by Apple, as well as companies like AT&T, Verizon, Samsung and LG. On desktop computers, that shelf space is overwhelmingly controlled by Microsoft.

So, we negotiate agreements with many of those companies for eye-level shelf space. But let's be clear—our competitors are readily available too, if you want to use them.

Our agreements with Apple and other device makers and carriers are no different from the agreements that many other companies have traditionally used to distribute software. Other search engines, including Microsoft’s Bing, compete with us for these agreements. And our agreements have passed repeated antitrust reviews.

The blog also goes on to show how easy it is to change the default search engine in Apple devices, Android, and Windows.

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The company also says that it understands that with success comes scrutiny, and expects that the court will rule in its favor.

We understand that with our success comes scrutiny, but we stand by our position. American antitrust law is designed to promote innovation and help consumers, not tilt the playing field in favor of particular competitors or make it harder for people to get the services they want. We’re confident that a court will conclude that this suit doesn’t square with either the facts or the law.

Our Take

This lawsuit was a long time coming. From the four Big Tech companies, Google's influence, reach, and scale have grown like no other, and its market dominance has been raising eyes for a long time. We expect this lawsuit to take years to settle, but meanwhile, it might have ripple effects on scrutiny that Google faces in other places such as Europe. We will keep you updated on further development.

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