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Google to be sued by Justice Department on antitrust violations

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The Justice Department will sue Google on Thursday for alleged violations of antitrust laws, according to four people familiar with the matter.

The suit will seek to hold Google liable for discriminating against rival websites in how it delivers ads. Google has also allegedly used anticompetitive techniques to prevent publishers from taking ads from competing companies, according to the people, who asked not to be identified discussing the Justice Department’s decision.

The department’s antitrust division believes the suit has strong chances of winning, the people said.

Google said it “respectfully disagrees” with the Justice Department’s claim.

“We think there are strong antitrust reasons to believe our business is not anti-competitive, and we’ll work hard to convince the DOJ otherwise,” Google said in a statement.

The lawsuit caps a nearly yearlong investigation into Google, the second antitrust complaint filed against the company in as many years. Microsoft had sued the company in 2010, accusing it of favoritism for its services in search results. That settlement was rejected by federal courts.

The Justice Department’s renewed effort to crack down on Google drew concerns from Google’s rivals.

“The new probe over Google’s search practices is a disaster for everyone trying to compete with Google: It supports their goals of making prices higher, slowing innovation, creating deeper dependencies between tech companies and regulators, and delaying much-needed antitrust reform,” said a person familiar with the matter who asked not to be identified discussing a confidential matter.

Competition in search and in online advertising — the third-largest U.S. ad market — has grown more important as more people turn to mobile devices to find information and entertain themselves online. Meanwhile, online publishers like Forbes, Vogue and Bloomberg Businessweek are increasingly in a lose-lose situation: If they take the ad money of Google or Facebook, the tech companies threaten to outmuscle them, or use their market power to charge premium prices for the ads they place.

In recent weeks, some publishers began to drop their agreements with Google, to give them more leverage in negotiations.

But the companies still have been falling behind. The combined revenue of Google and Facebook reached $110 billion last year, compared with a combined total of $50 billion from all publishers. Google claims more than 70 percent of U.S. search ad revenue.

Google denied its search engine prices significantly higher than other companies and insisted the agency could find ways to move ads from Google into more competitive platforms. It called a Google antitrust case against it “another misguided effort to score political points” as the U.S. debuts a Department of Labor investigation of Google’s labor practices.

Facebook, which unlike Google, has consistently settled federal antitrust complaints over antitrust issues, said in a statement that it hoped the Federal Trade Commission would follow the Justice Department in investigating its practices. The company added that “we remain focused on continuing to develop new technologies and to make our platforms more open and accessible to everyone.”

The Washington Post contributed to this report.

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