Antitrust Suit by 38 AGs Claims Google Has Search Monopoly
Google got slapped Thursday with another antitrust lawsuit, this time from 35 states, the District of Columbia, Guam and Puerto Rico (see 2012170037). As with states’ lawsuit against Facebook last week (see 2012100003), attorneys general from both parties in most states joined the complaint against Google, alleging the search firm violated Sherman Antitrust Act Section 2. Google said the AGs would harm search results at businesses’ cost.
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The 38 AGs seek to "restrain Google from unlawfully restraining trade and maintaining monopolies in markets that include general search services, general search text advertising, and general search advertising" in the U.S. Among those filing in U.S. District Court in Washington were Colorado, Nebraska, Arizona, Iowa, New York, North Carolina, Illinois, Kansas, Maryland, Minnesota, New Jersey, North and South Dakota, Ohio, Oklahoma, Oregon, Pennsylvania and Virginia.
Michigan and Wisconsin joined DOJ and other states’ earlier Google suit at the same court, DOJ said Thursday. California joined last week (see 2012110051). A telephonic hearing on a proposed schedule in that case is Friday (see 2011180032). The 38 AGs seek to consolidate their suit with the DOJ case, though the new suit goes further, said the New York AG office Thursday. DOJ said that request is pending. Texas and nine other states separately sued Google Wednesday at U.S. District Court in Sherman, Texas (see 2012160059).
Google “has methodically undertaken actions to entrench and reinforce its general search services and search-related advertising monopolies by stifling competition,” Thursday’s complaint said. “Google enjoys virtually untrammeled power over internet search traffic that extends to every state, district, and territory in the United States, and, indeed, into nearly every home and onto nearly every smartphone.”
The suit suggests Google shouldn't have made search more useful, the company blogged Thursday. “This lawsuit demands changes to the design of Google Search, requiring us to prominently feature online middlemen in place of direct connections to businesses.” The FTC and other global regulators and courts rejected such claims, Google added.
Google’s alleged anti-competitive conduct includes paying Apple $8 billion-$12 billion yearly to be the default search engine on its devices, while limiting search competition on Android devices, the AGs said. Google disadvantages specialized search sites like Yelp and Expedia by giving its own products better real estate on Google search result pages, they said. Google’s search-engine marketing tool SA360 artificially drives ad spending to Google, they alleged.
“Google has served as the gatekeeper of the internet and has weaponized our data to kill off competitors and control our decision making -- resulting in all of us paying more for the services we use every day," said New York AG Letitia James (D). Pennsylvania AG Josh Shapiro (D) said, “For too long, regulators have not taken needed steps to protect a free, open, competitive marketplace online. Big tech companies must meet the same standards of any other business in this country and play by the rules put in place to protect consumers.”
Tennessee AG Herbert Slatery is “grateful to the bipartisan coalition ... to restore competition and protect consumer welfare,” the Republican said. West Virginia AG Patrick Morrisey (R) said, “Corporations have a right to thrive, but they must not do so at the expense of severely and unlawfully limiting consumer choice.”
The complaint affirms evidence uncovered by the House Antitrust Subcommittee’s Google probe, said Chairman David Cicilline, D-R.I. Sen. Richard Blumenthal, D-Conn., in a statement praised the bipartisan state majority’s “forceful case that Google has abused its dominance in search and sought to squash competition.”
Recent antitrust suits hold Google accountable, said Public Citizen. Public Knowledge also praised Thursday’s action. The Computer & Communications Industry Association opposed policing design choices that it said improve customer experience.