Lawyers for the Justice Department and the second-largest wireless carrier in the country — Sprint — sued Google on Tuesday, accusing the company of hurting competition by freezing out rivals in mobile-search results and hurting competition in mobile devices.
Arguing that the operation of Google’s search engine is essentially a “neighborhood watch” for rivals, the federal government contends that it is unfairly limiting competition for mobile devices. Sprint, the second-largest mobile carrier in the country, joins in the complaint.
The company, which is a competitor of Google in that it sells devices, came to the government’s attention after changes were made to its search function, the Justice Department lawyers said. With the changes, a competitor, Verizon, could not get mobile listings or ads on Sprint’s devices, and Sprint itself could not find listings for its own devices, the lawyers said.
Google, through a spokesman, said: “This case has nothing to do with search or mobile devices. It’s about a small, fast-growing wireless operator trying to get its products to users. We’re happy to work with Sprint.”
Google’s search is, in many ways, a classic case of a “neighborhood watch,” with millions of individual users able to search and be directed to different services. The government’s charge is that Google operates a neighborhood watch that prevents a competitor from getting a chance to complain about Google’s practices.
With the rise of the Internet, digital competitors have moved to capture a piece of the ad market that is generated by Google’s search engine.
Consumers are more apt to click on other sites when they are searching for something online. Such sites are charged by Google a transaction fee for each click.
Google is arguing that it has a “first-party right” to display such ads, which implies that the ads were generated on its own servers.
“The explanation is that if you don’t have ads on your page, your page would either die or get so much feedback that it would be in a bad position that Google doesn’t want to have a return on investment,” said Gordon Smith, president of the Association of National Advertisers, which supports the antitrust case.
The Justice Department’s charge against Google is related to their mobile position. The Justice Department, for instance, would argue that Google’s mobile search operations are a “terrestrial” activity that is not as focused on competition as Google’s Internet search operations. The Justice Department also would say that search will be a key example in a very crowded mobile business.
Google claims that its neighborhood watch is not directed against Sprint, but against a competitor it has called a “bundle” of businesses, alleging that Sprint bought certain Sprint-branded phones and, because of that, could not get Google listings on Sprint devices.
In an interview, Mr. Smith, president of the Association of National Advertisers, said he believes the search engines should be forced to pay antitrust taxes, and his group supported the department’s approach in this case.
“We believe people should know what their trade partners are doing,” he said.
Representatives of Sprint did not return phone calls seeking comment. Google’s search business is the focus of the lawsuit, but it also affects the Internet in general.
In particular, it produces billions of dollars in ad revenue for Google, which serves search ads to millions of people. There are also a number of smaller internet companies that get half or less of their advertising revenue from Google.