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

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

Proposals include possibly putting an end to exclusive agreements Google has with companies like Apple and Samsung, and prohibiting certain kinds of data tracking. The government wrote that it’s considering “behavioral and structural” remedies that would ensure Google couldn’t use its Chrome browser or Android phone in a way that advantages its search engine, but didn’t outline what the structural remedies would be.

“Google’s anticompetitive conduct resulted in interlocking and pernicious harms,” reads the filing. The markets Google controls, it continues, “are indispensable to the lives of all Americans, whether as individuals or as business owners, and the importance of effectively unfettering these markets and restoring competition cannot be overstated.”

The 32-page filing follows federal Judge Amit Mehta’s ruling in August that Google had acted illegally to maintain a monopoly on the search engine market. That ruling was the culmination of an antitrust lawsuit that the Justice Department filed against Google in 2020, which was joined by 38 state attorneys general.

The Justice Department accused Google of illegally orchestrating its business dealings to ensure its search engine dominated the market. After a 10-week trial last fall, Mehta ruled in favor of the Justice Department. Google has said it will appeal this decision.

The government’s filing on Tuesday is its initial set of proposals to seek remedies against Google. In the filing, the Justice Department said it intends to go through court-ordered discovery for further evidence to support its stance. It will file a more refined framework in November and Google will have a chance to propose its own remedies in December.

In a blog post published Tuesday night, Google’s vice president of global affairs, Lee-Anne Mulholland wrote, “we are concerned the DOJ is already signaling requests that go far beyond the specific legal issues in this case.”

Mulholland appears to be interpreting the government’s filing as calling for the breakup of Google’s Chrome and Android businesses. She argues that those businesses have cost the company billions to develop. They are free and have open-source code that has benefited competitors and customers, she wrote.

“Make no mistake: Breaking them off would change their business models, raise the cost of devices, and undermine Android and Google Play in their robust competition with Apple’s iPhone and App Store,” she continued.

This is a major turning point in the regulation of Big Tech. Monopolies aren’t illegal in and of themselves, but using monopoly power to maintain market dominance is against the law.

The last antitrust case of this magnitude to make it to trial was in 1998, when the Justice Department sued Microsoft. That lawsuit centered around claims that Microsoft illegally grouped its various products together in a way that both stifled competition and compelled people to use its products.

A judge ruled in favor of the Justice Department back then, saying Microsoft violated antitrust laws and held “an oppressive thumb on the scale of competitive fortune.”

Over the last quarter of a century, tech companies have amassed enormous power and now play a crucial part in most people’s daily lives. Google’s parent 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 U.S. search engine market, while its closest competitors, Bing and Yahoo, each have around 3% of the market share.

If Mehta agrees with the Justice Department and decides to put stringent limits on Google’s reach, it could have a ripple effect throughout the industry.

What the Justice Department wants from Google

The thrust of the Justice Department’s case against Google focused on exclusive agreements the company made with device manufacturers, like Apple and Samsung. During the trial, internal documents and witnesses revealed that Google had paid billions of dollars per year to ensure it was the default search engine on smartphones, like the iPhone, and on web browsers, like Mozilla’s Firefox.

Witness testimony revealed the eye-popping sums Google paid its partners. For example, in 2021 alone, Google spent a total of $26.3 billion on its deals to be the default search engine. Apple had the most lucrative partnership with Google, bringing in $18 billion from the search giant that one year, according to the New York Times.

The government argued that these exclusive agreements made it difficult for rivals to edge in and left consumers with fewer choices. Google’s lawyers argued these were agreements that the search engine’s partners chose to enter on their own accords.

The Justice Department wrote in its Tuesday night filing that one of the remedies it’s evaluating is limiting or prohibiting the agreements. “Fully remedying these harms requires not only ending Google’s control of distribution today, but also ensuring Google cannot control the distribution of tomorrow,” the filing states.

During the monthslong trial last year, Google argued that its search engine is the most popular because it is the best product out there and that people prefer it. When Google’s CEO Sundar Pichai testified, he said paying billions of dollars to ensure its search is the default made sense.

“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 rival to Google. In a blog post last month, CEO Gabriel Weinberg wrote that restricting Google’s exclusive contracts would level the playing field.

“Google likes to claim everyone chooses Google,” Weinberg wrote. “But most consumers don’t: They just go with the default.”

In its filing, the Justice Department says it is evaluating other remedies, such as controlling how much data tracking Google carries out online. The government says the tracking raises “genuine privacy concerns” that could not only harm users, but “deny scale to rivals.” Additionally, the Justice Department evaluated Google’s advertising business and said it’s considering remedies that would “create more competition and lower the barriers to entry.”

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

Google just wrapped up the bulk of another trial brought by the Justice Department over its advertising business, in which the government alleged that the company illegally controls ad tools for publishers and advertisers. Closing arguments for that case are expected in November.

The U.S. government has targeted several other Big Tech companies in antitrust cases. Over the past few years, it’s sued Amazon, Apple and Facebook parent Meta, which owns Facebook and Instagram, over business practices the government says hurts both rivals and consumers.

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

“It establishes a foundation for obtaining a notable remedy in this case involving Google,” he said. “And it gives momentum to the Department of Justice and Federal Trade Commission prosecutions of other major tech companies.”

Editor’s note: Apple Card and Apple News are among NPR’s financial supporters.