DOJ Takes Key Step Toward Breaking Up Big Tech with Antitrust Complaint Against Google

By Eileen McDermott
October 21, 2020

“This lawsuit strikes at the heart of Google’s grip over the internet for millions of American consumers, advertisers, small businesses and entrepreneurs beholden to an unlawful monopolist.” – U.S. Attorney General William Barr

https://depositphotos.com/45057311/stock-photo-monopoly-3d-sphere-word-cloud.htmlThe U.S. Department of Justice and Attorneys General from 11 U.S. states filed a complaint on Tuesday in the United States District Court for the District of Columbia against Google, alleging the company is “unlawfully maintaining monopolies in the markets for general search services, search advertising, and general search text advertising in the United States through anticompetitive and exclusionary practices.”

The complaint maintains that Google has for years entered into exclusionary agreements and used anticompetitive practices to “lock up distribution channels and block rivals,” and comes after more than a year of investigation. The complaint specifically calls out Google’s distribution and licensing agreements with cell phone carriers and manufacturers, like Apple, which guarantees that Google’s search engine is preset as the default for Apple’s Safari browser. “Indeed, Google has preset default status for an overwhelming share of the search access points on mobile devices sold in the United States,” says the complaint.

In addition to these agreements, the complaint alleges that google maintains unlawful monopolies in search and search advertising by “using monopoly profits to buy preferential treatment for its search engine on devices, web browsers, and other search access points, creating a continuous and self-reinforcing cycle of monopolization.”

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Unfair Share

On computers, the Google Chrome browser has a 60% market share, while Apple’s Safari has approximately 16%, Mozilla’s Firefox 7%, and Microsoft’s Edge and Internet Explorer together have about 15%, and other smaller browsers have a combined 4% share. Most browser developers have agreed to preset Google as the default search engine. While consumers can change the defaults, many do not know they can, or do not bother to do so, explained the DOJ.

Tech companies have been under fire for some time now by the DOJ and on Capitol Hill. Last year the House Subcommittee on Antitrust, Commercial, and Administrative Law held a number of hearings to examine whether big tech companies are becoming too powerful and deterring innovation.

In a statement, Deputy Attorney General Jeffrey A. Rosen invoked the 1974 antitrust action against AT&T and the 1998 suit against Microsoft as a comparison to this week’s suit: “The Department is again enforcing the Sherman Act to restore the role of competition and open the door to the next wave of innovation—this time in vital digital markets,” Rosen said.

This is the first antitrust action against Google and the largest antitrust suit against big tech since those cases. While fighting anticompetitive practices in Big Tech is a bipartisan issue, Tuesday’s suit was filed by all Republican Attorneys General.

Attorney General William Barr called the case “monumental” and said: “This lawsuit strikes at the heart of Google’s grip over the internet for millions of American consumers, advertisers, small businesses and entrepreneurs beholden to an unlawful monopolist.”

Bad Timing?

Some criticized the timing of the suit and questioned whether it will be as strong or effective as the suit against Microsoft. Steven Levy of Wired wrote:

We can expect more action against Facebook, Amazon, and the rest. If they get knocked down a few notches, it may well open up some room for innovative competitors. But even at that, the timing seems off by a beat. The national psyche is dominated by issues literally involving life, death, and the future of the nation. Our buzzwords are masks, infections, vaccines, freedom, democracy, truth, racism, and violence. Search engine default is far down the list.

And Google itself  yesterday called the government’s lawsuit “deeply flawed,” adding: “People use Google because they choose to — not because they’re forced to or because they can’t find alternatives.” It added:

Our agreements with Apple and other device makers and carriers are no different from the agreements that many other companies have traditionally used to distribute software. Other search engines, including Microsoft’s Bing, compete with us for these agreements. And our agreements have passed repeated antitrust reviews.

The company’s Public Policy Team on Twitter posted a series of tweets yesterday demonstrating how users can easily change their default search engine and accused the government of claiming that Americans “aren’t sophisticated enough to do this.”

The statement also argued that the DOJ is wrong in claiming that Google competes only against other search engines, since users search the internet in many ways:

They look for news on Twitter, flights on Kayak and Expedia, restaurants on OpenTable, recommendations on Instagram and Pinterest. And when searching to buy something, around 60 percent of Americans start on Amazon. Every day, Americans choose to use all these services and thousands more.

The company said it is confident the DOJ’s case will fail: “We’re confident that a court will conclude that this suit doesn’t square with either the facts or the law.”

Image Source: Deposit Photos
Image ID:45057311
Copyright:mybaitshop 

The Author

Eileen McDermott

Eileen McDermott is the Editor-in-Chief of IPWatchdog.com. Eileen is a veteran IP and legal journalist, and no stranger to the intellectual property world, having held editorial and managerial positions at several publications and industry organizations. She has acted as editorial consultant for the International Trademark Association (INTA), chiefly overseeing the editorial process for the Association’s twice-monthly newsletter, the INTA Bulletin. Eileen has also served as a freelance editor for the World Intellectual Property Organization (WIPO); as senior consulting editor for the Intellectual Property Owners Association (IPO) from 2015 to 2017; as Managing Editor and Editor-in-Chief at INTA from 2013 to 2016; and was Americas Editor for Managing Intellectual Property magazine from 2007 to 2013.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 7 Comments comments. Join the discussion.

  1. Pro Say October 21, 2020 1:55 pm

    FANG: Break ’em all up.

    For the good of our Country.

    Note to Congress: It won’t do much (if any) good . . . if you don’t concurrently restore patent eligibility to all areas of innovation.

    Otherwise, Big Tech (even broken up) will continue to get away with using Mayo, Alice, and eBay to steal and incorporate the innovations of small companies, startups, and inventors in their own platforms, products, and services.

    That’s the one and only sure way to bust open the door for competitors.

    The only way.

  2. Pro Say October 21, 2020 2:16 pm

    “And when searching to buy something, around 60 percent of Americans start on Amazon.”

    — Google

    . . . which is one of the big reasons (among important, material others) the DOJ and States need to also go after Amazon.

  3. IPdude October 21, 2020 6:31 pm

    Sadly, this will slowly go away once Kamala and Biden take office. They are financially backed by big tech. This will be a repeat of Obama/Biden. All of the progress made in the last four years will be reversed. Reality.

  4. R. William Graham October 22, 2020 5:32 am

    I agree, break them all up. Propose to restrict the number of paid advertisers on each system in a defined area on each web page and force the listings to default to unpaid service and goods first to be geographically and alphabetically listed on the page so consumers can select from local vendors. Currently, small and individually owned businesses are being phased out as the cost for clicks is too much. For example, when discussing a typical advertising cost in the IP field with a Google representative, the recommended advertising budget was $6-7,000 a month. For a solo, there is not enough time in the month to cover overhead, pay for Google, insurance, staff, etc. and have enough left to make it worth while. Soon there will only be left the large firms. Inventors will be forced to pay far more for preparing a case to be filed and prosecuted. Many inventors will simply choose not to file which will negatively impact promotion and disclosure and advancement in technology.

  5. TFCFM October 22, 2020 10:37 am

    I think it remains to be seen whether anti-trust principles developed in a physio-chemical economy will translate meaningfully into an information-based economy. (My guess is, “No.”)

    It seems to me more likely that we will need to re-think how law can be revised to promote commercial competition in economic spheres in which “switching” costs are essentially zero (or even negative) and the technological “founder effect” (adopting the biological meaning of the term) is far more pronounced in the “information” world than in the “physio-chemical” world.

    As an example of this founder effect (and a counterpoint to the purported ‘example’ cited in the complaint), consider the following observation from my life: I subjectively prefer Chrome as a browser and Google as a search engine. For the past several years, no new device that I’ve purchased has had Chrome installed already, or had Google set as a default-anything. (For example, all my computers have had MSIE installed, with Bing set as the default search engine.) I’ve had to deliberately install Chrome and select Google search engines.

    Why do I do this and why do I subjectively prefer Chrome and Google? Because, IMO, “they work best.” Why do they work best? (I’m guessing that this is because) they’ve had the most development work done on them. Why have they had the most work done? (Again, my guess is because) “everyone” uses them. Why does “everyone” use them? Because they were (arguably) the best available at the time of their introduction.

    The “founder effect” to which I refer posits that because “everyone” initially chose Chrome/Google early on, they received the most revenue, which drove better development, which drove improved function, which drove greater popularity/satisfaction, which drove more revenue…

    Query whether this “founder effect” could/would have occurred even in the complete and utter absence of the slightest “anti-competitive conduct” on the part of Alphabet/Google? It seems to me likely that it would have.

    This is why it seems to me that trying to open the oyster of information-market-access with the housekey of traditional anti-trust law is an example of attempting to use a familiar — but wrong — tool to achieve a job for which it was not designed.

  6. PTO-indentured October 22, 2020 11:30 am

    IPdude @4

    Care to elaborate on “all the progress made in the last four years…” in the U.S. IP eco-system that (specifically) is going to be reversed. I don’t mean those said in ‘mere words’ then, not seen substantively put into practice.

    Courts at all levels ignore ‘guidance’.

    Politicians on both sides of the aisle enjoy six-figure ‘contributions’ — chump-change to Big-Tech oligarchs.

    Price of admission, just to try to ‘protect’ a U.S.: 4-8 years ago $1M-$2M. Now $3M-$4M (new, perfect range to guarantee a U.S. patent caste system).

    “All the progress…” as seen / felt by … ?

  7. Pro Say October 25, 2020 11:04 am

    Yet one more reason for Congress to break up Facebook:

    “Facebook touts free speech. In Vietnam, it’s aiding in censorship”

    https://www.latimes.com/world-nation/story/2020-10-22/facebook-censorship-suppress-dissent-vietnam

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