Google's antitrust problems continue to grow.
Last month, the US Department of Justice filed a long-awaited lawsuit against Google alleging the sprawling tech giant illegally monopolized search and search advertising.
Another group of seven states are planning to file a separate lawsuit next month to combine their case with the federal government, according to a Reuters report on Monday. The states are New York, Colorado, Iowa, Nebraska, North Carolina, Tennessee, and Utah.
The scope of the expected lawsuit is unclear. The DOJ case, to which eleven other attorneys general have already joined, is narrow. It is alleged that Google violated antitrust laws by cutting contracts with device manufacturers to be the default search engine on their devices. This blocked competitors. Google, owned by Alphabet, also used the dominance of its Android operating system to pressure device manufacturers to preload Google apps on their phones.
The DOJ's lawsuit is the culmination of more than a year of investigations into the practices of the search giant, a landmark antitrust case in the tech world. Google has declined to engage in anti-competitive behavior, calling the case "deeply flawed".
The search giant has been examined under antitrust law in the past. In 2013, the Federal Trade Commission completed a two-year investigation into Google after allegations of biased search results. However, the agency concluded that Google had not violated antitrust laws.
The DOJ's lawsuit comes from technology giants facing a reckoning of their scale and influence. Lawmakers and regulators are concerned about how their power could ultimately harm consumers, particularly by stifling competition from smaller players in Silicon Valley.
Apple, Amazon, and Facebook are also being investigated by federal agencies and lawmakers. In July, Google CEO Sundar Pichai appeared virtually on one Listen before the House of Representatives Antitrust Subcommittee, alongside Facebook CEO Mark Zuckerberg, Amazon CEO Jeff Bezos and Apple CEO Tim Cook.
Several areas of Google's business are being examined. Here's what you need to know about the tech giant's cartel battles:
What are Google's antitrust issues?
Google's dominance in web search, digital advertising, and smartphone software is the primary concern of lawmakers and regulators.
The company processes around 90% of all online searches in the United States. That stranglehold is the foundation of Google's massive advertising business, which generates nearly the company's total annual revenue of $ 160 billion. Google has been accused of harming competitors by giving its own products, such as shopping ads or local business listings, priority over those of its competitors in its search results. Critics also complain that the tech giant is taking content from publishers and other websites and using it in prepared responses directly in search results, rather than simply providing a list of links that users send to other websites.
Google's advertising business is also under the microscope, as the company owns every step in an intricate system that connects ad sellers and buyers. Competitors say the process gives Google an unfair advantage over the market. Much of the company's advertising power has come from acquisitions, including the 2008 buyout of ad tech company DoubleClick.
The company also owns the Android operating system, the world's most popular mobile software. Its dominance is difficult to exaggerate; Android supplies almost nine out of ten smartphones shipped worldwide with power. The technology giant was accused of using this dominance of strong partners to bundle Google's apps such as search and maps in their offers.
What exactly is in the DOJ's lawsuit?
The complaint is primarily focused on Google's search and search engine business. It is said that Google is harming rivals by making "exclusive" deals with phone makers like Apple and Samsung to be the default search engine on devices. It is part of a strategy to "block" search distribution, claims the DOJ.
The lawsuit also includes new details about Google's contracts with other companies. For example, Google is paying Apple $ 8 billion to $ 12 billion in advertising revenue annually to make Google search the standard on Apple devices. In 2018, Pichai and Cook met to discuss how they could work together to increase revenue. After the meeting, an Apple employee wrote to a Google employee: "Our vision is that we work as if we were a company."
Last year, almost half of Google search traffic came from Apple devices, according to the DOJ's complaint. The deal is so important that Google is viewing the loss as a "code red" scenario, the lawsuit said.
Is partisan politics a factor?
It could be. Most of the DOJ's lawyers in the investigation argued they needed more time to develop a strong case against Google, despite US Attorney General William Barr allegedly overriding their leadership, according to The New York Times. Some of the attorneys are concerned that the aggressive schedule, the work of which was finalized prior to the election, is to ensure that the Trump administration receives credit for acquiring a major tech company. The lawyers viewed the September deadline as arbitrary and set out their arguments for a longer deadline in a memo that was hundreds of pages, according to the Times.
The 11 states that have joined the federal lawsuit - Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina, and Texas - have Republican attorneys general.
There is bipartisan support for Google's antitrust review. But some Republicans have hailed the investigation alongside allegations that the tech giant is censoring conservative voices. President Donald Trump has repeatedly accused Google of playing badly without evidence.
Two years ago, the president claimed that Google's search results had been "manipulated" to spread negative news about Trump. Back then, he told reporters "I think Google really took advantage of a lot of people." He added, "Google, Twitter and Facebook are entering very, very troubled territory and need to be careful."
Would you tell me more about the country-level investigation?
Last September, Texas Attorney General Ken Paxton announced an antitrust investigation into Google's massive digital advertising business. AGs from 48 states, the District of Columbia and Puerto Rico participated in the study. As part of the investigation, the Paxton office sent Google a civil investigation request asking for important information about its ad operations and data collection guidelines.
The Paxton-led investigation differs from the anticipated New York and other states lawsuit, which is expected to be consolidated with the DOJ's case.
Congress also checks Google?
Google - along with Apple, Amazon and Facebook - is the target of a more comprehensive investigation by the House of Justice's cartel subcommittee on market dominance in Silicon Valley. One of the aims of the research is to investigate whether the US needs new competition laws to rule the tech giants in the digital age.
The subcommittee, led by Rhode Island Democrat David Cicilline, collected more than 1.3 million documents from technology giants, competitors and antitrust authorities during the year-long investigation. The highlight of the probe was a historical hearing in July during which the CEOs of the four companies appeared via video chat.
The subcommittee published its results in a 449 page report in October he accused the tech giants of "abusing monopoly power". The report calls for restructuring and other changes to contain businesses. For example, a recommendation would make it more difficult for tech giants to buy out smaller companies, a practice that consolidates the industry.
For Google, much of the testing was focused on the company's alleged advertising of its own products to those of its competitors. "There is evidence that after building its vertical offerings, Google introduced various changes that resulted in Google's inferior services being privileged while competitor offerings were downgraded," the report said.
The Senate has also targeted Google. In September, Don Harrison, Google's president for global partnerships and corporate development, testified before the Senate Antitrust Subcommittee. Legislators on both sides of the aisle have informed the executive about Google's massive advertising business.
"We don't have this hearing because Google is successful," said Senator Amy Klobuchar, the senior Democrat on the subcommittee. "We have it because even successful companies, even popular companies, and even innovative companies are subject to the laws of this country, including our antitrust laws."
Later in the hearing, Harrison argued that Google is not dominant in digital advertising, citing competitors like Facebook and Snapchat. Klobuchar replied: "I disagree."
What about outside of the US? What has the European Union done?
Google's antitrust problems are not limited to the United States. Last year the search giant was fined $ 1.7 billion by the European Commission for "abusive" online advertising practices. The commission said Google exploited its dominance by preventing its competitors from placing their search ads on third-party websites.
Two years ago, the EU executive fined Google $ 5 billion for unfair business practices related to Android, its mobile operating system. The investigation focused on Google's dealings with phone manufacturers that required certain Google apps and services to be preloaded on Android phones.