The Department of Justice, joined by 11 states with Republican attorneys general, filed an antitrust lawsuit Tuesday against the tech giant Google, setting off a titanic legal battle likely to last for years.
The lawsuit, filed in federal court in Washington, D.C., accuses Google of using its enormous size to illegally monopolize the market for search-generated advertising through contracts, such as an agreement with Apple to put its search engine on iPhones, to freeze out competitors.
"Two decades ago, Google became the darling of Silicon Valley as a scrappy startup with an innovative way to search the emerging internet. That Google is long gone," the lawsuit said.
"The Google of today is a monopoly gatekeeper for the internet, and one of the wealthiest companies on the planet, with a market value of $1 trillion and annual revenue exceeding $160 billion," it continued. "For many years, Google has used anticompetitive tactics to maintain and extend its monopolies in the markets for general search services, search advertising, and general search text advertising — the cornerstones of its empire."
Google called the lawsuit deeply flawed, saying, "People use Google because they choose to — not because they're forced to or because they can't find alternatives."
“This lawsuit would do nothing to help consumers," Google's senior vice president of global affairs, Kent Walker, said in a statement published on the company's blog. "To the contrary, it would artificially prop up lower-quality search alternatives, raise phone prices, and make it harder for people to get the search services they want to use.”
The lawsuit marked the biggest move by the Justice Department against Big Tech since 1994, when the government sued then-dominant Microsoft. That case eventually fizzled out with a settlement in which the company agreed to make minor changes in its business practices.
Google certainly saw the lawsuit coming. More than a year ago, the Justice Department and the Federal Trade Commission launched antitrust investigations against the company, as well as Apple and Facebook. Attorney General William Barr has been unusually active in following the progress of the case, placing the deputy attorney general, Jeffrey Rosen, in charge, instead of deferring to the assistant attorney general of the department's antitrust division.
"If the government does not enforce the antitrust laws to enable competition, we could lose the next wave of innovation," Rosen said Tuesday. "If that happens, Americans may never get to see the next Google."
The tech giant has faced similar legal challenges abroad. The European Union fined Google $1.7 billion in 2019 for stopping websites from using advertiser searches provided by its rivals. In the U.S., Google controls roughly 80 percent of all internet searches. But it has said it has vibrant competition in the search market, with more people finding information on sites like Amazon.
Ryan Shores, the Justice Department's senior technology adviser, said Google illegally controls the market through exclusionary agreements that shut out competitors.
"Google collectively pays mobile phone manufacturers, carriers, and web browsers billions of dollars each year from its monopoly search advertising revenues to be the preset default search engine," he said. "This is, by far, the most effective way for a search engine to gain users, as most people simply use this default."
Shores said the company enters into agreements requiring its search engine to be featured on Android mobile phones and made undeletable, whether the phone's owner wants them or not.
While Tuesday's lawsuit was brought by a Republican administration, many Democrats in Congress have been strongly critical of Google's dominance. As a candidate for the Democratic nomination for president. Sen. Elizabeth Warren, D-Mass., proposed to break up Google, Amazon and Facebook by forcing them to spin off parts of their companies and give up their control over e-commerce.
The federal case, pitting Washington against Silicon Valley, is likely to set the legal course for similar attacks on tech giants that have grown with comparatively little government supervision.