Justice Department calls for sanctions against Google in landmark antitrust case: NPR

The Justice Department sued Google for allegedly using its dominant position to control the search engine market. In August, a federal judge ruled in favor of the government and must now decide how to sanction the company.

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The Justice Department is proposing a series of sanctions against Google to ensure that the company can no longer monopolize the search engine market. In a filing late Tuesday evening, the government laid out its framework for containing the tech giant.

Proposals may include ending the exclusive agreements Google has with companies like Apple and Samsung, as well as banning certain types of data tracking. The government wrote that it was considering “behavioral and structural” remedies that would ensure that Google cannot use its Chrome browser or Android phone in ways that benefit its search engine, but did not explain how the structural ones remedial measures would look like.

“Google’s anticompetitive conduct resulted in interlocking and devastating harm,” the filing says. The markets controlled by Google, it continues, “are essential to the lives of all Americans, whether as individuals or as entrepreneurs, and the importance of effectively unleashing these markets and restoring competition cannot be overstated.”

The 32-page filing follows federal Judge Amit Mehta's ruling in August that Google acted unlawfully to maintain a monopoly in the search engine market. This ruling was the culmination of an antitrust lawsuit brought by the Justice Department filed against Google in 2020which was joined by 38 attorneys general.

The Justice Department accused Google of illegally orchestrating its business relationships to ensure its search engine dominated the market. After one 10 week test last fallMehta ruled in favor of the Justice Department. Google has announced that it will appeal this decision.

The government's filing on Tuesday is the first set of proposals to take remedial action against Google. In the filing, the Justice Department said it intended to conduct a court-ordered evidentiary hearing to obtain further evidence to support its stance. In November, Google will submit a refined framework and in December Google will have the opportunity to propose its own remedies.

In a blog post published Tuesday evening, Lee-Anne Mulholland, vice president of global affairs at Google, wrote: “We are concerned that the DOJ is already signaling demands that go far beyond the specific legal issues in this case.”

Mulholland appears to interpret the government's request as calling for a split of Google's Chrome and Android businesses. She argues that developing these businesses cost the company billions. They are free and have open source code that benefits competitors and customers, she wrote.

“Make no mistake: a cancellation would change their business models, increase the cost of devices and undermine Android and Google Play in their fierce competition with Apple's iPhone and App Store,” she continued.

This is a major turning point in the regulation of Big Tech. Monopolies are not illegal per se, but using monopoly power to maintain market dominance is illegal.

The last antitrust case of this magnitude to go to trial was in 1998 The Justice Department sued Microsoft. At the heart of that lawsuit were allegations that Microsoft illegally grouped its various products in a way that both stifled competition and forced people to use its products.

A judge ruled in favor of the Justice Department at the time Microsoft violated antitrust laws and kept “an oppressive thumb on the scale of competitive happiness.”

Over the last quarter century, technology companies have built enormous power and now play a crucial role in most people's daily lives. Google's parent company Alphabet is one of the most valuable companies in the world – now worth more than $2 trillion – and the word “Google” is synonymous with searching the Internet.

The company controls around 90% of the US search engine marketwhile its closest competitors, Bing and Yahoo, each have about 3% of the market share.

If Mehta agrees with the Justice Department and decides to impose stricter limits on Google's reach, it could have far-reaching implications for the entire industry.

What the Justice Department wants from Google

The focus of the Justice Department's case against Google was on exclusive agreements the company had with device makers such as Apple and Samsung. During the trial, internal documents and witnesses revealed that Google had paid billions of dollars each year to ensure that it was the default search engine on smartphones like the iPhone and in web browsers like Mozilla's Firefox.

Testimony revealed the staggering sums Google paid its partners. For example, in 2021 alone, Google In total, the company spent $26.3 billion on its deals to be the default search engine. Apple has had the most lucrative partnership with Google, bringing in $18 billion for the search giant this year. according to the New York Times.

The government argued that these exclusive agreements made it harder for competitors to prevail and left consumers with fewer choices. Google's lawyers argued that these were agreements that the search engine's partners had entered into on their own initiative.

The Justice Department wrote in its filing Tuesday evening that one of the remedies it is considering is to limit or ban the agreements. “To fully repair these harms, we must not only end Google’s control over distribution today, but also ensure that Google cannot control distribution tomorrow,” the filing said.

During months of testing last year, Google argued that its search engine was the most popular because it was the best product on the market and that people preferred it. When Sundar Pichai, Google's CEO, testified, he said it made sense to pay billions of dollars to ensure that search is done by default.

“We want to make it very, very seamless and easy for users to use our service,” Pichai said.

The search engine DuckDuckGo is a much smaller competitor to Google. In one Blog post Last month, CEO Gabriel Weinberg wrote that restricting Google's exclusive contracts would level the playing field.

“Google likes to claim that everyone chooses Google,” Weinberg wrote. “But most consumers don’t do that: they just stick with the standard.”

In its filing, the Justice Department says it is exploring other remedies, such as controlling how much data tracking Google does online. The government says the tracking raises “real privacy concerns” that could not only harm users but also “prevent competitors from scaling.” In addition, the Justice Department assessed Google's advertising business and said it was considering remedies that would “create more competition and lower barriers to entry.”

Once the Justice Department and Google submit further proposals in November and December, another trial will take place next April. Mehta will also preside over this case and will hear from both sides as they discuss possible remedies in their cases.

Just Google completed most of another trial Justice Department lawsuit over its advertising business, in which the government alleged the company illegally controlled advertising tools for publishers and advertisers. Closing arguments in the case are expected in November.

The U.S. government has targeted several other Big Tech companies in antitrust cases. It has been sued in recent years Amazon, Apple and Facebook Parent Metawhich owns Facebook and Instagram, for business practices that the government says harm both competitors and consumers.

In its case against Google, the government used the 1998 Microsoft lawsuit as a blueprint. Bill Kovacic, a professor of antitrust law at George Washington University Law School and former chairman of the Federal Trade Commission, told NPR in August that the Justice Department's victory against Google could pave the way for more lawsuits.

“It provides a basis for obtaining significant relief in this case involving Google,” he said. “And it gives a boost to the prosecution of other big tech companies by the Justice Department and the Federal Trade Commission.”

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