Examining the US Government’s Lawsuit With Google

Examining the US Government’s Lawsuit With Google

On October 20, 2020, the United States Justice Department filed a lawsuit against Google. The lawsuit claims that Google uses illegal methods to keep a monopoly on its internet search and advertising functions online.

This is a developing case, so it's still progressing. But as worries about Big Tech's size have grown over the years, the results could have implications in the future. Let's break down the case to see what each side has argued.

The Justice Department's Case

In the lawsuit, the DOJ claims that Google is in violation of Section 2 of the Sherman Antitrust Act of 1890, which states:

Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony . . .

The US Government's arguments primarily revolve around Google's search engine and its advertising. While Google owns a lot of other services and products (such as Android and YouTube), it's of course best known for search and makes billions of dollars every year from advertising.

First, the Justice Department claims that Google is a gatekeeper of the internet and has a monopoly in this position. The DOJ says that Google has long used tactics that prevent anyone else from challenging this dominant position.

Next, the DOJ states that as online searches have exploded on mobile devices, Google has set up deals with device makers and mobile carriers to maximize the number of those searches that go through Google.

The Justice Department also argues that Google's dominance lets it charge whatever it wants for advertising. The company is then able to feed some of that money back into the agreements that keep its search engine dominant, creating a difficult-to-break cycle.

Finally, the DOJ says that low competition means advertisers have to deal with Google's policies about privacy and personal data, even if they don't want to agree to them.

Google's Response

Now, let's take a look at what Google has said in response to the initial arguments. Google's SVP of Global Affairs, Kent Walker, said in a blog post that the lawsuit was "deeply flawed." The company summarized its argument in a series of tweets, as well.

In essence, Google denies that the actions it takes are to uphold a monopoly. Walker says that "[p]eople use Google because they choose to, not because they're forced to, or because they can't find alternatives."

He compares Google paying companies like Apple and Mozilla to feature Google search in their software to a cereal brand paying a grocery store to feature its products at eye-level on the shelf. The post also explains how easy it is to change your default search engine from Google to something else in major browsers like Safari and Chrome.

Google also mentions how Windows devices don't feature Google products by default. Windows 10 comes with Edge preinstalled, which uses Bing as its default search engine.

Later, Google discusses how its agreements with mobile carriers and device makers (Google distributes Android for free, in exchange for the companies featuring Google services on the phone) help keep the cost down for the user.

Google's last major point is that lawsuit doesn't consider how easy it is to use alternative services. Unlike the 1990s, where you usually had to buy a physical CD to install new software and there wasn't a wealth of options available, downloading another app or changing your default settings is extremely easy.

It states how Mozilla set Yahoo! search as the default search engine in Firefox back in 2014 (because Yahoo! paid for this), but most people chose to use Google anyway. The company then reversed the decision in 2017, putting Google back as the default search engine in Firefox due to its "effort to provide quality search."

Google feels that this lawsuit "would artificially prop up lower-quality search alternatives, raise phone prices, and make it harder for people to get the search services they want to use."

Now that we've laid out the facts, there's a lot to consider here. The DOJ thinks that Google has a monopoly, while the company claims that it doesn't because alternatives are widely available, but people still choose to use Google.

To get an idea of how this might proceed, we can look back at some related legal cases.

United States v. Microsoft Corporation

The most similar one to this occurred in 2001's United States v. Microsoft Corp. In that case, the government accused Microsoft of maintaining a monopoly in the PC market. Its main argument was that Microsoft restricted users' ability to uninstall Internet Explorer and use another browser.

Because IE was part of Windows, the government thought that this stifled the market for competition, since other browsers took a long time to download or required you to buy them in a store. In response, Microsoft claimed that IE and Windows were too closely linked to separate, and that anyone who used Windows got to enjoy Internet Explorer for free.

In the end, that suit ended with relatively minor penalties for Microsoft. It was decided that the company had to share its APIs with third-party companies and appoint a panel of people with full access to all of Microsoft's systems to make sure it was playing by the rules. The DOJ didn't require Microsoft to change any code in Windows or force Microsoft to stop bundling IE with its OS.

As Google's blog post mentioned, this case being almost two decades ago makes it an entirely different scenario. You can download another search engine app in seconds, compared to hours to download another browser in 2000.

Other Antitrust Lawsuits

This isn't Google's first time getting in legal trouble for anticompetitive practices. In 2018, the European Union fined Google 4.3 billion euros for its practices of pre-installing Google apps on Android devices.

This has happened to Microsoft, too. The company offers editions of Windows in Europe and South Korea called Windows 10 N and Windows 10 KN respectively. These are essentially identical to the regular edition of Windows 10, except they exclude Windows Media Player and a few other media features, like the Voice Recorder app.

Microsoft created these versions for legal reasons. In 2004 and 2005, both the EU and South Korean governments fined Microsoft for abusing its monopoly to hurt other multimedia apps. They ordered that company create a version without these apps bundled in.

A Messy Lawsuit

Only time will tell what will happen with the DOJ's case with Google. Looking back at past suits, we can see that governments don't like companies like Google and Microsoft using their influence to crowd out competitors.

But whether the Justice Department has a leg to stand on remains to be seen. Google is certainly the most popular search engine, due in no small part to how great it is. But this lawsuit will decide whether Google enjoys this advantage for illegal reasons.

If this has you interested, why not learn more about how Google works?


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