Google Antitrust Cases in the US and Europe: Overview

Google is now facing several antitrust challenges around the world, including three government cases filed in the US alone in the past two months.

However, government agencies have been scrutinizing the company for years, with the European Commission cracking down on the search giant well before US regulators caught up. The Commission has already fined Google billions of dollars in three separate competition cases that Google has appealed against.

Regulators in other countries have also objected to Google’s competitive practices, such as in Australia, where Google’s top critic News Corp has a strong presence.

Google is also facing some notable antitrust challenges from private complainants. Fortnite maker Epic Games sued both Apple and Google separately for alleged anti-competitive practices, including charging “exorbitant” fees for sales through their mobile app markets. Online publishers Genius Media and The Nation filed a lawsuit on Wednesday alleging that Google is harming their businesses by stifling ad competition. They are looking for class action status.

In all significant cases, Google has denied engaging in anti-competitive behavior. Google insists that its choices were made in the interest of consumers.

Here are the top competition cases against Google to keep an eye on in the US and Europe:

DOJ

The Justice Department lawsuit closely follows its earlier lawsuit against Microsoft in the late 1990s, at least on the surface. Both discuss attempts to maintain monopoly power by establishing key distribution channels for competitors and using so-called foreclosure contracts to ensure the standard status of the technology on manufacturers’ devices.

The DOJ lawsuit, which was filed in October before 11 Republican Attorney General, describes alleged lockout contracts that Google used to block distribution. One such example is Google’s contract with Apple to provide the default search engine status on Apple devices.

Since the original filing, California, Michigan, and Wisconsin have asked to join the case.

Republican state AGs

Texas led a group of nine other Republican Attorneys General in a lawsuit targeting Google’s ad technology business and an alleged anti-competitive agreement with Facebook.

The lawsuit, filed Wednesday, alleges that Google has used its market power to induce advertisers and publishers to use its tools every step of the ad-buying process, ultimately to the detriment of consumers.

It also claims that Google entered into an agreement with Facebook when it learned of its plans to create an ad exchange that could potentially rival his own. The states allege that the agreement involved Google’s manipulation of auctions to benefit Facebook in exchange for keeping the competitive threat at bay. A Google spokesperson told CNBC that this claim is false and that Facebook is involved in exchanges outside of Google’s.

Bipartisan state coalition

A bipartisan group of attorneys general from 38 states and territories, including Colorado, Iowa, Nebraska and New York, filed a third lawsuit against Google on Thursday. Part of the lawsuit echoes the DOJ’s claims about lockout contracts, but the complaint also extends beyond that initial lawsuit.

The states’ complaint takes a closer look at Google’s alleged attempts to block emerging distribution channels, such as smart speakers. It also claims that Google is limiting the ability of vertical search engines like Yelp and Tripadvisor to reach consumers by using “discriminatory behavior on the search results page”.

The complaint also relates to Google’s advertising tools and claims that it unfairly harms advertisers by denying them the opportunity to interact between their own advertising tools and those of competitors.

House Judiciary Subcommittee on Antitrust

While Congress does not have law enforcement powers, the House of Justice subcommittee on antitrust released a comprehensive report in October that the authors hope will result in long-term legislative changes. The report followed a more than a year investigation into Amazon, Apple, Facebook and Google, which found that each of the companies had a monopoly position in their respective markets.

The majority report found that Google’s dominance functioned “like an ecosystem of interlocking monopolies,” which was reinforced by linking different services to rich user data. Like some of the recent lawsuits, the report found that Google is maintaining its search monopoly through alleged anti-competitive contracts.

The subcommittee is working on new bills that aim to update antitrust laws in various ways to make them better able to deal with modern business problems. The report, prepared by Democratic staff, found that “the courts have significantly weakened antitrust laws” since their entry into force, leaving Congress with an obligation to legislate to return them to their original intent.

Shopping comparison

The European Commission fined Google 2.4 billion euros ($ 2.7 billion) in 2017 after finding that the company had violated antitrust rules by allegedly abusing its dominance in the search for its own shopping comparison product advantage over competitors. At the time, the fine was the highest ever imposed by the regulator in a case of monopoly abuse.

Google is currently in the process of challenging the fine. The European competition regulator can make a decision before the data subject has a chance to appeal against the decision to a court. In the US, this process has essentially been reversed: regulators must ask the court to approve its settlements or take sides in lawsuits when it files antitrust claims.

Android

The European Commission surpassed its previous record fine against Google in a second antitrust decision targeting Google’s Android mobile operating system in July 2018. Regulators fined Google $ 5 billion for allegedly abusing its dominance in Android to dishonest its own services. benefit. The Commission alleged that Google did this in part by forcing smartphone makers to pre-install their apps only.

Google has since appealed.

Online advertisement

The third European investigation into Google resulted in a fine of approximately $ 1.7 billion to the company in March 2019 for allegedly stifling competition in online advertising.

The Commission’s allegations focused in part on exclusive contracts that Google allegedly had with publishers using the AdSense tool that prevented them from displaying advertisements from competitors.

Google has also appealed that ruling.

While Google faces the threat of possible breakup in the future, it will likely take years to reach a significant resolution. Once the new cases have passed through court, there is still far from a guarantee that a judge would grant anything drastic, even if they take sides with the government. At least some of the cases against Google will likely be consolidated, with the bipartisan coalition already signing a motion to do so with the DOJ case.

While new laws that could make courts more favorable to government in such cases are looming on the horizon, they are far from an immediate threat.

That’s probably why these new lawsuits have had little impact on Google’s stock price. Shares of parent company Alphabet are up nearly 30% in 2020, and nearly 20% in the past three months alone. Investors have become accustomed to controlling the trillion dollar company, and the threat has already been priced in.

But as long as these lawsuits go on, Google will continue to scrutinize every step and acquisition it tries to make. Just as many believe that the Justice Department case against Microsoft in the late 1990s to early 2000s diverted its attention from the growing threat from Google, so a growing competitor could thrive again under the circumstances.

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