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Google’s legal worries are increasing by the day. The search giant was slapped with three antitrust cases by the U.S. Department of Justice (DoJ) and more than three dozen U.S. states.
The cases filed against the Silicon Valley titan allege antitrust violations, and each one has a slightly different view on the wrongdoing. Two lawsuits focus on Google’s monopoly in search and search-related activities, and the third alleges the firm of anti-competitive practices related to its advertising technology.
What are the three cases?
The DoJ filed the first case in October, one of the biggest lawsuits against a tech company in almost two decades. The complaint alleges Google of maintaining monopoly over search activities by striking exclusive contracts with other companies to set Google as the default search engine on browsers and smartphones.
In the complaint, the Justice Department said Google paid Apple $12 billion each year to make Google the default browser on Safari. It claimed that Google’s 80% market share in search engine business was made possible due to such deals with Apple and other smartphone makers.
The billions of dollars spent by Google helped it gain top position in search of millions of devices, edging out rivals and maintaining monopoly, it said.
The other case, third was filed by a group of 38 US states and territories led by Colorado and Nebraska Attorney General accuse Google of illegally maintaining ‘untrammelled’ power in general search services and search advertising.
It alleges that Google used three forms of anti-competitive policies to maintain its monopoly in the search related business. The first argument mirrors DOJ’s accusation that Google used its ‘massive financial resources’ to pay Apple and other smartphones makers to ensure Google is enthroned as the default search engine to prevent rivals from getting access to key distribution channels.
It added that Google pursued similar strategies with other devices such as voice assistants and internet-connected cars.
The new piece of allegation noted that Google’s Search Ads service ‘severely limit’ the tool’s interoperability with a competitor, disadvantaging advertisers.
In another point, it said that Google restricts consumers from bypassing its general search engine. Meaning, it pushes specific sites and services out of its search results.
The complaint added that Google discriminates against services offered by specialised vertical providers such as travel agencies who offer the ability to complete a transaction then and there. The search giant wants all consumers to begin their search from Google rather than going directly to the site or an app.
They pose a threat to Google’s monopoly power in those markets because their success would both strengthen general search rivals with whom they partner and lower the artificially high barriers to expansion and entry that protect Google’s monopolies.
Hence, Google undermines competitive threats, limiting the ability of consumers and advertisers to obtain information and make their own choices. It also said that Google’s actions have blocked and burdened the current and emerging general search technology.
Just a day before coalition of more than 30 US states and territories filed a case, a group of 10 states led by Texas filed their own lawsuit alleging Google ran an illegal monopoly suppressing competition by engaging with Facebook to rig ad auctions.
The complaint said that as Google saw Facebook emerging as a rival in online advertising, it struck an agreement with the social media giant. As per the deal, Facebook would reduce its moves in the advertising space for special treatment during Google ad auctions.
Google, which controls one third of global advertising industry, has been accused of abusing its monopoly over the digital ads market. It allowed its own exchange to win ad auctions despite higher bids by competitors and overcharged publishers for ads.
The search giant worked with Facebook, its largest competitive potential threat to kill competition through unlawful agreements, the complaint alleges.
The states have asked Google to compensate them for damages and sought structural relief.
Google’s Response
Just after the lawsuit was filed by DOJ, Kent Walker, Senior Vice President for Global Affairs and Chief Legal Officer at Google, in a blog post called the lawsuit ‘deeply flawed’. According to Walker, there is nothing wrong in paying phone manufacturers to grab the ‘eye-level shelf’ space. He suggested that competitors are readily available for the use too.
He further argued that Google’s deal with Apple and other device makers are similar to deals that many companies have 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,” Walker said.
People use Google by their choice, not because they are forced to, he added.
In another response to the lawsuits filed last week, Adam Cohen, Google’s Director of Economic policy, reiterated Walker’s statement. He said if people don’t like the results Google is providing them with, many other alternatives including Amazon, Expedia, Tripadvisor are just a click away.
Cohen said the lawsuit demands changes to the design of Google Search, leading to involvement of online middlemen in place of direct connections to businesses and this would harm the quality of search results.
This would in turn hurt businesses like retailers, restaurants, repair shops, airlines and hotels. They would have a harder time reaching new customers and competing against big commerce and travel platforms and other aggregators and middlemen, he added.
According to Cohen, the volume of traffic Google sends to non-Google sites has increased every year and now its search results page shows an average of 26 outgoing links on mobile devices as compared with 10 previously.
He also noted that Google is prepared to answer all questions and work through the issues. Google plans to push the argument that the lawsuit seeks to redesign Search
that would deprive Americans of helpful information and hurt businesses’ ability to connect directly with customers.
The cases can take years to resolve and the first hint was dropped by US district Judge Amit Mehta, when he set September 12, 2023 as a tentative date to start the trial of the Justice Department antitrust lawsuit .
