On Tuesday, the US Justice Department commenced legal action against Google, accusing it of illegal anticompetitive practices.
This move reflects increasing frustration on both sides of the political spectrum in the United States about the power and influence in so-called ‘Big Tech’, particularly Amazon, Apple, Facebook and Google.
The Justice Department is bringing this action under Section 2 of the Sherman Act, 15 U.S.C. § 2 ‘to restrain Google LLC 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.’
In order to succeed with their suit, the Justice Department must prove two elements:
- That Google is dominant in search; and
- That Google’s deals with other firms stymie competition in the search market
The Justice Department said that Google ‘estimates that almost 50% of its search traffic originated on Apple devices in 2019 [and] Google pays the iPhone maker an estimated $8bn to $12bn a year to remain the default option on its phones, iPads and Mac computers.’ This figure accounts for 15-20% of Apple’s profits, demonstrating their co-dependence. In response, Google compared their contracts with Apple and other manufacturers to ‘cereal brands paying for prominent placement on store shelves,’ arguing that they were not at fault.
This lawsuit is also a ‘response to the policy question of what measures, if any, should be taken to curb today’s tech giants, which hold the power to shape markets, communication and even public opinion.’
Indeed, the House Judiciary Committee’s 449-page report in July recommended ‘restoring competition by effectively breaking up the companies, emboldening the agencies that police market concentration and throwing up hurdles for the companies to acquire start-ups.’
Jerrold Nadler and David Cicilline, Democrats of New York and Rhode Island and Chairmen of the Judiciary Committee and Antitrust Subcommittee respectively said ‘our investigation leaves no doubt that there is a clear and compelling need for Congress and the antitrust enforcement agencies to take action that restores competition, improves innovation and safeguards our democracy.’
Similar concerns have been raised in Europe, with the European Commission demanding €8.2bn in fines including:
- €2.4bn over shopping results in 2017
- €4.3bn over claims it used Android software to unfairly promote its own apps in 2018; and
- €1.5bn for blocking adverts from rival search engines in 2019
This move has been supported by 11 attorneys general, all Republicans, leading some to claim that the lawsuit has a political motive. Indeed, it has been reported that the Attorney General William Barr ‘wanted to move quickly to take action before the election, making good on President Trump’s pledge to take on Big Tech.’
As Neil Kinkopf, a Georgia State law professor and advisor to the Attorney General under Bill Clinton, commented, ‘I think this attorney general is demonstrably more committed to the political success of the president, and the president’s political agenda than any attorney general in history I can think of.’
Google is expected to criticise the lawsuit as politically motivated, following claims by the Trump administration that Big Tech companies are biased against conservative views. Facebook’s recent ban on ads seeking to ‘delegitimise any lawful method or process of voting’, the very claims that President Trump is making with regards to the postal voting system in the United States, may bring the social media platform into the crosshairs of the Justice Department.
Worryingly for other Big Tech companies, the description of Google as a ‘monopoly gatekeeper for the internet, one of the wealthiest companies on the planet’ could similarly apply to them.