Google hit by landmark competition lawsuit in US over search

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BBC.COM-image copyrightGetty Images

image captionGoogle has been issued with huge fines in the EU over market dominance

The US government has filed charges against Google, accusing the company of violating competition law to preserve its monopoly over internet searches and online advertising.

The lawsuit marks the biggest challenge brought by US regulators against a major tech company in years.

It follows more than a year of investigation and comes as the biggest tech firms face intense scrutiny of their practices at home and abroad.

Google called the case “deeply flawed”.

The company has maintained that its sector remains intensely competitive and that its practices put customers first.

“People use Google because they choose to – not because they’re forced to or because they can’t find alternatives,” it said.

Monopoly concerns

The charges, filed in federal court, were brought by the US Department of Justice and 11 other states. The lawsuit focuses on the billions of dollars Google pays each year to ensure its search engine is installed as the default option on browsers and devices such as mobile phones.

Officials said those deals have helped secure Google’s place as the “gatekeeper” to the internet, allowing it to own or control the distribution channels for about 80% of search queries in the US.

“Google has thus foreclosed competition for internet search,” the lawsuit said. “General search engine competitors are denied vital distribution, scale, and product recognition – ensuring they have no real chance to challenge Google.”

It added: “Google is so dominant that ‘Google’ is not only a noun to identify the company and the Google search engine but also a verb that means to search the internet.”

The suit said the deals have hurt the public by damaging search quality in terms of privacy and data protection, reducing choice and thwarting innovation.

Sally Hubbard, who works for the Open Markets Institute, a Washington think tank that has long pushed for more aggressive action against big tech firms, said focusing on Google’s search distribution deals was one of the easiest legal cases to make against the company.

On Twitter she said the lawsuit had “been so long coming but it’s wonderful to see”.

Broader effort

The case could be the first of many in the US that challenge the dominance of big tech firms and potentially lead to their break-up.

Other states have launched their own investigations, and said they may join the suit filed on Tuesday or file their own.

Politicians in Congress have also called for action against Google and fellow tech firms Amazon, Facebook and Apple in an effort that has united Democrats and Republicans.

The decision to file the lawsuit just a few weeks before the US presidential election has raised questions about whether it was simply a move by the Trump administration to prove its willingness to challenge the influence of the sector if it gains a second term.

But officials said they had not rushed the investigation to ensure it was filed before the election – noting that for years, many advocates have said the government was moving too slowly on such issues.

“We’re acting when the facts and the law warranted,” deputy attorney general Jeffrey Rosen said, adding that the department’s review of competition practices in the technology sector is continuing.

Google has faced similar claims in the European Union. It is already appealing against €8.2bn ($9.5bn; £7.3bn) in fines demanded by the European Commission which include:

Google parent Alphabet, which has a market value of more than $1tn, is expected to fight the allegations in the US as well. Its share price was little changed on Tuesday, despite the news.

Taking on a giant like Google will be one of biggest competition cases in decades. But the case – to decide if the California-based company abuses its market power – could last years.

European regulators have led the way in taking action against the tech giants. But this move by the US Department of Justice is a sign that the mood has turned against them at home too.

The complaint says that two decades ago Google was a scrappy innovative start-up – but now it’s the monopoly gatekeeper to the internet.

Google stands accused of using anti-competitive tactics to shut out rivals and extend that monopoly. Google says people use it because they choose to rather than being forced.

Deciding who is right won’t be a quick decision.

 

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