Google headquarters in Mountain View, California.
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The US Department of Justice on Tuesday is expected to file a landmark lawsuit against Google that accuses the tech giant of illegally holding monopolies in search and search advertising, the culmination of a months-long investigation into alleged anticompetitive practices at the search giant.
The federal government accused Google of violating antitrust laws by engaging in anticompetitive practices to preserve monopolies in search and search advertising, according to a report from The Wall Street Journal, citing senior Justice officials.
The tech giant’s dominance stems from its massive digital ad business, a juggernaut that brings in about 85% of the company’s roughly $160 billion in annual sales. That operation is fueled by the company’s iconic search engine, which processes around 90% of searches done online around the world and is considered some of the most prime real estate on the internet.
Tuesday’s suit against Google marks the most high-profile case the US has brought against a tech company since the 1990s, when the DOJ and a collection of states accused Microsoft of a monopoly in the PC software market. The two sides settled in 2001.
The DOJ lawsuit comes as tech giants face a reckoning over their size and influence. Legislators and regulators are concerned over how that power might ultimately harm consumers, especially by choking off competition from smaller players in Silicon Valley. Aside from Google, rivals Apple, Amazon and Facebook are also under investigation by federal regulators and lawmakers. In July, Google CEO Sundar Pichai appeared virtually at a hearing before the House Judiciary Antitrust Subcommittee, alongside Facebook CEO Mark Zuckerberg, Amazon CEO Jeff Bezos and Apple CEO Tim Cook.
The complaint is expected to focus largely on Google’s search business. The DOJ will reportedly accuse Google of being a gatekeeper to the internet by unlawfully blocking out competitors, including reaching deals with phone makers to be the preset, default search engine on devices.
Google has faced scrutiny from federal regulators in the past. In 2013, the Federal Trade Commission wrapped up a two-year investigation into Google after allegations of biased search results. The agency, however, decided unanimously that Google wasn’t violating any antitrust laws.
Inside the DOJ, the timing of Tuesday’s lawsuit had reportedly become the source of in-fighting at the agency. Most of the lawyers on the probe argued they needed more time to build a strong case against Google, though Attorney General William Barr is said to have overruled their guidance, according to The New York Times. Some of the attorneys were concerned the aggressive timeline, with work completed before the election, was to ensure the Trump administration gets credit for taking on a big tech company.
Google’s antitrust woes aren’t limited to the US. Last March, the search giant was hit with a $1.7 billion fine from the European Commission for “abusive” online ad practices. The Commission said Google exploited its dominance by restricting its rivals from placing their search ads on third-party websites.
Two years ago, the EU’s executive arm fined Google a record $5 billion for unfair business practices around Android, its mobile operating system. The investigation focused on Google’s deals with phone manufacturers, requiring them to preload specific Google apps and services onto Android phones.
Google didn’t immediately respond to a request for comment.
This is a developing story…