How Google will defend itself against the US government’s antitrust lawsuit
All the details on the dispute between the US Department of Justice and Google, the largest legal action in over 20 years carried out by the US federal government against a big tech
It thundered so much that it rained on Mountain View. The US Department of Justice (DoJ) and eleven states have filed a lawsuit for violation of antitrust rules by Google, accused of protecting its monopoly in both the search service and advertisements.
This is the largest legal action in over 20 years by the US federal government against a big tech since its battle with Microsoft in the 1990s.
Like its competitors Amazon, Facebook and Apple, Google has recently come under the crosshairs of the American authorities for hypothetical anti-competitive practices.
But Big G's services are mostly free to consumers, making it difficult to prove how its dominance in the market harms them, analysts note.
"People don't use Google because they have to, they use it because they choose to," replied the company owned by Alphabet.
All the details.
THE CAUSE LAUNCHED BY THE US FEDERAL GOVERNMENT
The Department of Justice and eleven US states initiated antitrust action against Google on Tuesday. The goal is to prevent the giant from "maintaining illegal monopolies in the markets for general search services, ad search and general ad search in the United States," reads in filings filed with the Washington Federal District Court.
The Justice Department called Google "a monopoly guardian for the Internet" and said the company had used a "network of exclusion agreements" to hinder competitors in the search industry.
ABUSE OF GOOGLE ACCORDING TO THE DEPARTMENT OF JUSTICE
The DoJ targeted contracts between Google and smartphone makers, including Apple, to pay a share of its search advertising revenue. In return, the guarantee that the Google search engine is installed by default on the mobile device.
The lawsuit claims that these deals constitute a monopoly abuse of Google's core market share in search. He claims this constitutes an illegal barrier to entry for Google's competitors in the industry, such as Microsoft's Bing, Verizon's Yahoo and DuckDuckGo.
THE PARTNERSHIP BETWEEN GOOGLE AND APPLE AT RISK
The DoJ's move undermines the agreement between Google and Apple on the search engine embedded in the Safari browser. A giant traffic source for the search box giant. A pact that could vanish in the face of antitrust objections and give a blow to Google's revenues which, as the quarterly reports published during the coronavirus show, suffer from non-diversified and de facto sources of revenues all based on power – and absence of competitors – the search engine.
Google still pays an exorbitant sum to remain the default search engine on iOS devices. $ 9 to $ 10 billion, according to industry analyst Rod Hall.
Half of Google's traffic would come from Apple and 15-20% of Apple's revenues are the result of the agreement with Google.
THE REPLICA OF THE COLOSSUS OF MOUNTAIN VIEW
Google says the Justice Department's lawsuit for alleged competitive abuse is "deeply flawed" and wouldn't help consumers. Rather, it will merely support lower quality search engines, as we read in a Google blog post .
Google's contracts with telephone operators for the Google Search functionality are not exclusive, as the Department of Justice accuses, but are common in the sector, the note also reads. For mobile users, it's switching to another search engine, the company points out.
Google claims that its Android mobile operating system is flexible and freely available to phone manufacturers and operators. Furthermore, many apps that are not pre-set on phones continue to become very popular.
HOW THE ONLINE SEARCH MARKET IS DIVIDED
In the lawsuit, the DoJ claims that Google controls 88% of the overall online search market, compared to Bing's 7%. Yahoo, which simply repackages Bing's results under a deal with Microsoft, has less than 4%. While the privacy-focused alternative engine DuckDuckGo has less than 2%.
“People don't use Google because they have to, they use it because they choose to,” replied global lawyer Kent Walker in the blog post.
As Axios points out, prosecutors will therefore have to prove that Google has not only a monopoly, but a harmful monopoly in a clearly defined market.
EVERY TIME THE EU COMMISSION HAS PINCHED BIG G
The antitrust blow at home comes after Google has already found itself under the lens of overseas regulators.
In March 2019, Google was hit with a new € 1.49 billion fine from the European Union for violating competition rules. This is the third time that the European Antitrust has bagged the Mountain View giant.
In 2017, the European Commission imposed a € 2.42 billion fine against Google due to the preferential treatment given to its Google Shopping product in the rankings of shopping sites on its search engine.
Before the fine received for granting its Google Shopping service an illegal advantage over competitors, there is the one worth $ 5.1 billion in 2018. The accusation of abusing the dominance of its Android operating system . The Mountain View giant has appealed all three sanctions.
With today's action, both Google and the US federal government face the likelihood of a years-long legal battle.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/google-causa-antitrust-stati-uniti/ on Wed, 21 Oct 2020 13:16:57 +0000.