The United States Justice Department today filed an antitrust lawsuit against Google, claiming the Mountain View-based company has used anticompetitive and exclusionary practices in the search and advertising markets to maintain an unlawful monopoly.
“Today, millions of Americans rely on the Internet and online platforms for their daily lives. Competition in this industry is vitally important, which is why today’s challenge against Google — the gatekeeper of the Internet — for violating antitrust laws is a monumental case both for the Department of Justice and for the American people,” said Attorney General William Barr. “Since my confirmation, I have prioritized the Department’s review of online market-leading platforms to ensure that our technology industries remain competitive. 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.”
The lawsuit [PDF], which is also backed by Attorneys General in 11 states, calls Google the “monopoly gatekeeper” to the internet for billions of users and advertisers around the world. Google has accounted for almost 90 percent of all search queries in the United States, and has allegedly used “anticompetitive tactics” such as exclusionary agreements to maintain its monopolies in search and search advertising.
One of the main complaints against Google is its deal with Apple that allows Google to be the default search engine on Apple’s Safari browser and other search tools, a privilege that Google pays billions for. Google’s agreement with Apple “gives Google the coveted, default position on all significant search access points” for Apple devices.
Though there is an option to change the search engine, the DoJ says that “few people do” making Google the “de facto exclusive general search engine.”
Google’s agreement with Apple is apparently so valuable to Google that it considers losing the default status on iPhones and other Apple products as a “Code Red” scenario. In 2019, almost 50 percent of Google search traffic originated on Apple devices.
Under the current agreement between Apple and Google, which has a multi-year term, Apple must make Google’s search engine the default for Safari, and use Google for Siri and Spotlight in response to general search queries. In exchange for this privileged access to Apple’s massive consumer base, Google pays Apple billions of dollars in advertising revenue each year, with public estimates ranging around $8-12 billion. The revenues Google shares with Apple make up approximately 15-20 percent of Apple’s worldwide net income. […]
Thus, Google views the prospect of losing default status on Apple devices as a “Code Red” scenario. In short, Google pays Apple billions to be the default search provider, in part, because Google knows the agreement increases the company’s valuable scale; this simultaneously denies that scale to rivals.
The lawsuit also accuses Google of entering into agreements that forbid preinstallation of competing search engines, requiring preinstallation of search apps in prime locations on mobile devices, and using “monopoly profits” to “buy preferential treatment” for the Google search engine on devices, web browsers, and other search access points.
Google’s behavior allegedly makes it harder for “innovative new companies” to “develop, compete, and discipline Google’s behavior,” which has had an impact on competition and consumers. With the lawsuit, the DoJ is aiming to put an end to Google’s anticompetitive conduct and “restore competition” for consumers, advertisers, and companies reliant on the internet economy.
In response to the lawsuit, Google said that the DoJ’s position is “deeply flawed” and that people use Google “because they choose to, not because they’re forced to, or because they can’t find alternatives.”
Google says that the lawsuit will do nothing to help consumers and would artificially prop up “lower quality search alternatives,” along with raising phone prices and making it more difficult for people to “get the search services they want to use.”
Specific to Apple, Google says that Apple uses Google Search as the default for its devices because “they say Google is ‘the best.'” Google also points out that Bing and Yahoo pay Apple to be featured on Apple devices, and that it’s “simple” to change iPhone settings and swap out the search engine choice through Safari preferences.
Google says that it is confident that a court will conclude that the lawsuit “doesn’t square” with the facts or the law, and that while it plays out, Google will remain focused on delivering free services that “help Americans every day.”