U.S. v. Google: The Biggest Antitrust Lawsuit Since ‘98

By: Ana Cucalon

Edited by: Anna Dellit and Colin Crawford

The United States Justice Department has accused Google of abusing its power to exclude competitors from the market and form an illegal monopoly. The case is a jarring move against modern-day tech giants and is one of many recent efforts by the federal government to reign in Silicon Valley’s biggest conglomerates. While it is not illegal in the United States to have a monopoly, federal prosecutors worry that Google isn’t allowing competition to present itself, let alone overpower it in the market, and is therefore illegally excluding its competitors. [1] The case mainly focuses on sections 1 and 2 of the 1890 Sherman Act, which states:

Sec. 1. Every contract, combination in the form of trust or other- wise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, at the discretion of the court.

Sec. 2. 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 misdemeanor, and, on conviction thereof; shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.[2]

In the lawsuit, the U.S. government details when and how through its expansion Google violated this Antitrust Act, according to federal prosecutors, and leaves Google to defend its actions and intentions from as early as the year 2000, when Google launched Google Ads. [3]

Antitrust and antimonopoly laws usually revolve around monetary issues, specifically how monopolies drive up prices and hurt consumers. In the new era of digital technology, Google is free and accessible to consumers despite its growing popularity and outstanding worth. Federal prosecutors argue that while Google’s negative impact on consumers can’t necessarily be quantified by price, Google’s monopoly still hurts consumers by illegally excluding its competition. Furthermore, Google’s obstruction of the competition incapacitates other businesses from succeeding in the search engine market, therefore hurting consumers by forcing them to use a product that is not necessarily the best one. For example, Google exhaustively collects user data to generate ads and personalized content. The government claims that Google’s domination over its market could impede consumers from choosing a search engine that collects less data on them. They claim that by taking out the consumer’s choice to pick a search engine, Google is violating the core of the antitrust laws. [4] Google’s domination over the market makes it impossible for other products to surface, products that could be better for consumers or at least incentivize other companies to provide better services. 

Most importantly, federal prosecutors argue that Google’s billion-dollar agreements with electronic companies such as Apple have excluded its competitors from the market and illegally monopolized the search engine business. Their claim is proved if by doing so, the agreements have hurt consumers, competitors, and the general innovation of the industry. For example, Google has a 1 billion dollar agreement with Apple to make Google the default search engine for all Apple products. When a user goes to look something up on Safari, Apple’s browser, their device takes them directly to Google. [5] Google has similar agreements with Mozzila, Firefox, and other wireless providers. It also has agreements with Android companies to download the Chrome app on their devices by default. Federal prosecutors argue that Google has used these contracts to make it inaccessible for competition to gain access to the wider public market. They believe that since Google has so many users, it has much more data than any of its competitors to make its search engine better, leading to more users continuing to use it. This cycle is then illegally accelerated by the above agreements. This is because Google is now at risk of owing its success to these contracts instead of its organic consumer pool, which would make the contracts illegal. To conclude, the Justice Department argues that the agreements exponentially increase Google’s size and domination, making it more valuable and further excluding its competition. [6]

Google’s defense centers on three main points. First, its popularity among consumers. It argues that people who use Google choose Google because they like it, not because Google uses agreements to block out competition. It claims its dominance is solely based on the continued success of its product, highlighting how companies choose to partner with it because consumers prefer it. Second, the agreements they hold with other tech companies are not as exclusive as the government depicts them. Google says that users can easily change their default browser from Google to another search engine with a few clicks and that the purpose of the agreements is to create a seamless experience for those who choose Google. Lastly, it argues that it does not dominate the search engine market nearly as much as the government depicts. The Justice Department states that Google has a 90% market share when you define its competition as “general search” (pop in any question and get an answer). [7] In contrast, Google says it has less than 90% market share because it competes with many more platforms than just the ones allowing for “general search”. For example, it says it competes with Amazon for searching for products, TikTok and Redditt for less generalized questions, Spotify for music and podcasts, and Chat GPT for academic help. On that account, Google affirms that it is not in dominance of its market or competition, and is therefore not violating antitrust laws as it does not monopolize the search engine market. [8]

After hearing both sides, the judge has to decide three things: is Google a monopoly? If yes, did these agreements violate the Sherman Antitrust Act? What line should be drawn for these powerful companies that own big online platforms? If the Judge rules in favor of the government, Google would likely be asked to change its behavior and would be limited in its ability to engage in agreements such as the one it has with Apple. If the Judge rules for Google, it could send a message to other Silicon Valley companies that the government’s increased pressure on them is not a serious threat. In addition, Washington would receive the message that antitrust laws cannot properly oversee companies based on providing free services.  

Finally, the trial has the potential to shape the future of tech as corporations fight to dominate platforms such as artificial intelligence. As this case progresses, the question remains whether Google and companies like it will continually be placed in a position of advantage to dominate data marketplaces, and how that would impact the new era of the internet. The official case, titled U.S. and Plaintiff States v. Google LLC, can be further tracked and viewed on the Justice Department’s official website.

Notes:

1. The Daily, The New York Times. 2023. “U.S. v. Google.” (The New York Times, September 13, 2023). https://www.nytimes.com/2023/09/11/podcasts/the-daily/google-monopoly-trial.html.

2. National Archives. 2022. “Sherman Anti-Trust Act (1890)” (National Archives, 2022). https://www.archives.gov/milestone-documents/sherman-anti-trust-act.

3. U.S. v. Google LLC, 2023CV00108, Washington, DC, (District Court for the Eastern District of Virginia. 2023).

4. Kerr, Dara. 2023. “The DOJ's antitrust trial against Google over its search dominance begins.” (NPR, September 12, 2023). https://www.npr.org/2023/09/12/1198558372/doj-google-monopoly-antitrust-trial-search-engine.

5. Villasenor, John. 2023. “A primer on some key issues in U.S. v. Google | Brookings.” (Brookings Institution). https://www.brookings.edu/articles/a-primer-on-some-key-issues-in-u-s-v-google/.

6. (The Daily, The New York Times 2023)

7. (The Daily, The New York Times 2023)

8. (The Daily, The New York Times 2023)

Bibliography:

The Daily, The New York Times. 2023. “U.S. v. Google.” The New York Times, September 13, 2023.https://www.nytimes.com/2023/09/11/podcasts/the-daily/google-monopoly-trial.html.

Kang, Cecilia. 2023. “In Its First Monopoly Trial of Modern Internet Era, U.S. Sets Sights on Google.” The New York Times, September 12, 2023. https://www.nytimes.com/2023/09/06/technology/modern-internet-first-monopoly-trial-us-google-dominance.html.

Kerr, Dara. 2023. “The DOJ's antitrust trial against Google over its search dominance begins.” NPR, September 12, 2023. https://www.npr.org/2023/09/12/1198558372/doj-google-monopoly-antitrust-trial-search-Engine.

“Sherman Anti-Trust Act (1890) | National Archives.” 2022. National Archives |. https://www.archives.gov/milestone-documents/sherman-anti-trust-act.

U.S. Department of Justice. 2023. “Justice Department Sues Google for Monopolizing Digital Advertising Technologies.” Department of Justice, January  24, 2023. https://www.justice.gov/opa/pr/justice-department-sues-google-monopolizing-digital-advertising-technologies.

U.S. v. Google LLC, 2023CV00108, Washington, DC, (District Court for the Eastern District of Virginia. 2023).

Villasenor, John. 2023. “A primer on some key issues in U.S. v. Google | Brookings.” Brookings Institution. https://www.brookings.edu/articles/a-primer-on-some-key-issues-in-u-s-v-google/.