The Justice Department Is Suing Google
On Tuesday, the Justice Department filed an antitrust lawsuit against Google, according to Barron's.
The Justice Department is accusing the tech giant of operating multiple monopoly businesses. The lawsuit was filed in the US District Court for the District of Columbia. The lawsuit states that Google has used interlocking contracts to prevent rivals from introducing competing search products and has control of around 80 percent of the search queries in the US.
“But as the antitrust complaint filed today explains it has maintained its monopoly power through exclusionary practices that are harmful to competition,” Deputy Attorney General Jeffrey Rosen said. “So the Justice Department has determined that an antitrust response is necessary to benefit consumers.” However, investors did not seem to care as the stock rose 1.4 percent.
Google responded to the lawsuit stating that it was deeply flawed and that people choose to use Google. The lawsuit highlights that Google pays Apple billions to keep it as the default search engine on iOS devices. The payments account for 15-20 percent of Apple's annual profits. The DOJ is arguing that Google paying Apple prevents competitors from making similar deals because Google has a mountain of capital and resources.
The DOJ also noted that Google's Android operation system is monopolistic in nature and prevents competitors from emerging as providers. “We plan to continue our review of competitive practices by market leading online platforms, and where necessary address those as well,” Rosen said.
Lastly, the Justice Department is alleging that Google's search advertising practices resulted in higher costs and lower quality services for advertisers.
The tech industry was quick to respond to the lawsuit. “It cannot escape notice that this suit was hurried out on the eve of an election where the administration has aggressively pressured tech companies to take actions in its favor,” Computer and Communications Industry Association Matt Schruers said. “Antitrust law should be driven by consumers’ interests, not political imperatives. We look forward to a court’s review of the facts and the evidence.”