Google is no longer the “darling of Silicon Valley,” according to a complaint filed by the Justice Department and several state attorneys general this week. What began as a “scrappy startup” has become an industry behemoth, to the point that the agency has remembered the United States has antitrust laws – and it’s their job to enforce them.
The U.S. government hasn’t gone after a tech company in this way since the late 1990s – when it filed against Microsoft. And when the two complaints are placed side by side, it’s tough to tell which was written in 1998 and in 2020. But this is a massive case, and could signal the end of government complacency when it comes to monopolies.
DOJ Accuses Google of Strong-Arming the Competition
The agency accuses Google of stifling competition by making deals with other tech giants that essentially make Google the only search engine in town. Specifically, the complaint alleges that Google has maintained an illegal monopoly by:
Forcing other tech companies into exclusivity agreements that “forbid preinstallation of any competing search service”
Entering into arrangements that force preinstallation of its search engine in prime locations on mobile devices and making them undeletable
Maintaining long-term agreements with Apple that require Google to be the default search engine on Apple’s Safari browser and other Apple search tools
Buying preferential treatment on devices, web browsers, and other “search access points”
Google pays distributors and manufacturers billions of dollars every year to “lock up distribution channels and block rivals,” according to the complaint. Indeed, Google vastly outperforms competitors when it comes to market share, handling around 90 percent of all search queries worldwide.
“But Google Is Free!” (They’ll Say)
Google will have a hard time convincing a judge it doesn’t have monopoly power over internet searches. But who is harmed when the product is free to everyone? Microsoft’s Internet Explorer was free as well, but the government argues (then and now) that it’s the very idea of competition being harmed here:
“General search engine competitors are denied vital distribution, scale, and product recognition – ensuring they have no real chance to challenge Google.”
Google’s influence is so great that even the word “Google” has taken the place of other verbs for searching the internet. Plus, a monopoly could still mean higher prices for advertisers, weakened privacy protections, and less incentive to keep up product quality.
For its part, the company has called the DOJ’s suit “deeply flawed.” But if the DOJ wins, it could signal big changes that would bring antitrust law into the digital era.