Well, it’s finally happened. After years of threats and anticipation, on Tuesday, the United States Justice Department announced that it has filed a lawsuit against Google, claiming that the company has participated in anti-competitive business practices that have stifled competition and created a monopolistic hold over the online search and advertising businesses.
Eleven states are joining the federal government on the complaint: Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina, and Texas. Some of the states have performed their own investigations into Google, including Texas, which launched an antitrust probe last September into the search giant's behavior.
It’s a big case that could reshape the internet forever. You’ve probably got questions, and we’ve got answers.
What does the lawsuit say?
According to the Justice Department, Google has "unlawfully maintain[ed] monopolies through anti-competitive and exclusionary practices," and used its incredible wealth to create a seemingly impenetrable hold on online search and advertising. The company is accused of entering into a series of exclusionary agreements that lock users into using Google as their primary search engine, including multi-billion dollar deals that have made Google the default and, according to the DOJ, the de facto exclusive search engine on Apple devices. The Justice Department also claims that Google has entered into arrangements that require Google search products to be pre-installed on devices while making it excessively difficult for competing services from being installed and attempting to negotiate deals that would make its own products undeletable from a device even if consumers don't want to use them.
Hmm, that doesn’t sound great. But Google does seem pretty good at finding stuff on the internet, so why should we care?
The theory undergirding the Justice Department's case is that search is often the gateway to the internet, and Google has made itself so ubiquitous that there are few alternative paths. All roads lead to Google, one way or another, thanks in large part to the company's aggressive dealing with mobile device manufacturers, as mobile now makes up over half of all internet traffic. Google dominates search, accounting for more than 90 percent of all search traffic and more than 95 percent of all search queries on mobile.
Google's hold on advertising isn't quite the vice grip it has on the search business, as reports indicate the company commands about 30 percent of the digital advertising market. But the company has a distinct advantage, seeing as nearly every search completed on the internet goes through the company. Google has been accused on many occasions of giving its own products preferential treatment in advertising and was given one of the largest fines in history by the European Commission for violating advertising rules and promoting itself over third parties that may offer better, more competitive products and services.
And what does Google have to say about all this?
Google, for its part, is refuting any claims of wrongdoing. "Today’s lawsuit by the Department of Justice is deeply flawed. People use Google because they choose to — not because they're forced to or because they can't find alternatives," a spokesperson for Google tells Mic. The company promised more information to follow as it defends itself against the charges.
How big a deal is this whole thing, really? And is there any precedent for the government’s case?
The landmark lawsuit promises to be one of the biggest antitrust cases on record. It is the government's first major antitrust case against a technology company since 1998 when it sued Microsoft for allegedly creating a monopoly over computer operating systems and internet browsers.
The Microsoft case will likely be instructive as the government crafts its argument against Google, as many of the allegations made against the companies are similar. Microsoft was accused of engaging in anti-competitive exclusionary arrangements with computer manufacturers, internet providers, and content providers to push its Internet Explorer browser while stifling competitors like Netscape. Similarly, Google is accused of entering into exclusivity agreements that prevent other search services from being installed on devices and undermine user preference by making Google the default.
The Department of Justice won its case against Microsoft, finding that the company had engaged in monopolistic behavior and was attempting to crush competitors. Following an appeal and a settlement, Microsoft agreed to open its operating system up to third-party developers, and the government got the result that it wanted: Microsoft saw its dominance in operating systems and internet browsers slip as more competition made its way into the field, all while Microsoft has remained a healthy and successful company.
Sounds like a happy outcome for everyone! So what’s next in the Google case?
A similar outcome will likely be sought in the case against Google. By calling into question the legality of some of Google's practices, the Department of Justice is hoping to create new opportunities for competitors to gain footing and offer a worthwhile alternative to Google. The result should be a positive one for consumers: more choice when it comes to search rather than Google being the default on their device no matter what, and more diversity of sources within advertisements in search results rather than being held hostage in Google's own ecosystem. For consumers, the difference might be as simple as being asked when setting up their phone or web browser what search engine they want to make the default. Many will likely still choose Google, but at least it will be a choice.