The U.S. Department of Justice has filed a lawsuit against Google alleging that the company engages in unethical and illegal conduct to protect the dominance of its search engine. This is the strongest and most aggressive government stance toward the conduct of a tech company in over 20 years. The crux of the concerns involves Google's parent company, Alphabet Inc., establishing itself as a "gatekeeper" and creating business agreements that prevent other search engines from competing with Google.
The stakes in this upcoming battle are high and with Google maintaining a $120 billion cash balance, they will fight to defend their business practices. If you compare Google's search engine usage to that of Bing and Yahoo, they dominate with anywhere from 80-90% of the share (depending upon whether you are on a desktop, tablet or mobile). This comes at a time when state Attorney General offices are not just investigating Google for antitrust activities, but also investigating Facebook and Apple. Similar investigations and litigation in Europe have cost Google roughly $9 billion in fines. What is the potential harm in having one company dominate the search engine business? This effectively limits competition, results in less consumer choice, reduces innovation, and can result in higher prices for online advertising. The government anti-trust investigation uncovered a communication from Google's chief economist stating, "We should be careful about what we say both in public and private" in reference to lessons learned from Microsoft’s antitrust case.
How did Google get into the position they are in today? First, these binding and interlocking agreements with hardware manufacturers resulted in the Google search engine being preloaded with no opportunity for deletion. Alphabet pays Apple nearly $10 billion a year to grow its search engine traffic.
This lawsuit will be instrumental in determining the future of U.S. antitrust law. The Sherman Act, which deters attempts to monopolize a business and limit competition is somewhat ambiguous and open to interpretation. This lawsuit is critically important to supporting the ability of the Department of Justice to effectively utilize the Sherman Act to allow for competitive environments for business.