Yesterday, the Department of Justice (“DOJ”) filed a landmark antitrust case against Google, accusing the tech giant of disadvantaging competitors through a network of allegedly exclusionary business deals regarding searching and online advertising. Eleven states – Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Montana, South Carolina, and Texas – each with Republican attorneys general, joined the DOJ’s suit.
The DOJ alleges that Google is a monopoly under traditional antitrust principles and effectively controls the market for online searching, through personal computer use, among smartphone users, and for use of search ads. The government’s claims are based on the Sherman Act, a law passed in 1890, that permits the government to break up monopolies. The government previously relied on the Sherman Act to go after tech behemoth Microsoft in 1998, which was resolved via settlement.
Whether the Sherman Act is the right legal hook is questionable, given that it defines monopolies in terms of harm to consumers, primarily via unfair increased costs, and most of Google’s services are free of charge for consumers. The government appears to argue that Google’s alleged anticompetitive conduct negatively impacts consumers by reducing the quality of available search services. Google released a statement via Twitter decrying those claims: “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.”
This is shaping up to be the largest legal fight in Google’s history. If the government is successful, Google could be forced to overhaul and break up the structure of its businesses. If Google is able to successfully defend itself against these allegations, this case could set the legal precedent necessary to shield other well-known tech companies from similar government probes and any concomitant litigation.
Chilivis Grubman recently noted in this blog post the government’s use of the antitrust laws to go after alleged misconduct in the healthcare space. The attorneys at Chilivis Grubman have extensive experience defending clients against DOJ enforcement actions. Contact us today.