The US’ Justice Department could sue Google as early as next week over its dominance in online search and advertising, Reuters reported. In particular, the company could potentially be sued for looking to disadvantage rivals such as Microsoft’s Bing by not sharing data on user preferences with them to hurt their ad business. The department is also reportedly looking at investigating “search advertising”, which are basically advertisements related to a user’s particular search query. Google controls whose ads are visible in such searches, and also the tools required to make those ads.
The Justice Department is currently asking state attorneys general to sign onto the lawsuit, the report continued, and added that Google, on its part has denied any wrongdoing. It was also reported that US Attorney General William Barr has been personally for an early antitrust complaint against Google, and the department is under pressure to present a complaint against Google in the run up to the US Presidential election in November.
The lawsuit will be a culmination of a year long investigation
The Justice Department, in July last year, had opened a broad investigation of “market-leading” online platforms to review if they engage in practices that reduce competition, stifle innovation or harm consumers. Without specifying the companies that would be probed, it had said that “search, social media, and some retail services online” companies would be reviewed. This could be a reference to Google, Facebook and Amazon.
According to a regulatory filing by Google’s parent Alphabet in August 2019, it had revealed of receiving a “civil investigative demand” from the Justice Department. It has said:
“On August 30, 2019, Alphabet received a civil investigative demand from the DOJ requesting information and documents relating to our prior antitrust investigations in the United States and elsewhere. We expect to receive in the future similar investigative demands from state attorneys general. We continue to cooperate with the DOJ, federal and state regulators in the United States, and other regulators around the world,” — from Alphabet’s regulatory filing last year
Google claims it’s not dominant in online search and advertising
Google, like other Big Tech firms, has been under constant antitrust scrutiny, especially in the US and EU. However, like the other firms, it has maintained that it doesn’t have dominance on any sector. In an antitrust hearing hearing in the US in July, where CEOs of Google, Apple, Facebook and Amazon testified, Google tried to downplay its dominance in search and advertising.
“You can ask Alexa a question from your kitchen; read your news on Twitter; ask friends for information via WhatsApp; and get recommendations on Snapchat or Pinterest,” CEO Sundar Pichai said at the hearing. For advertising, Pichai claimed that competition in ads — from Twitter, Instagram, Pinterest, Comcast and others — has helped lower online advertising costs by 40% over the last 10 years, with these savings passed down to consumers through lower prices.
Competition scrutiny of Big Tech persists
The Big Tech is being scrutinised outside of the US as well, especially in the EU:
- Germany is investigating Amazon for allegedly abusing its dominance while setting prices for products sold by third-party sellers.
- Italy’s antitrust authority has launched an investigation into cloud storage services offered by Apple, Dropbox, and Google
- Apple is being investigated in Italy over issues regarding Apple Music, the App Store, Apple Pay and more.
- Italy’s anti-trust watchdog in March began investigating Amazon for hiking prices of products such as hand sanitisers, disinfectant gels, and masks, earlier this year as the coronavirus pandemic accelerated.
- The US Dept of Justice’s antitrust division chief lays out anti-competition arguments against tech firms
- Australia’s competition regulator to investigate Google and Apple’s app stores
- US authorities probing if Google is bundling products to block competitors: Report
- EU antitrust regulators are investigating Google’s data collection practices: Report