The Justice Department on Wednesday filed a lawsuit against Google, claiming the company gives preference to its own digital services on the internet, quashing competition and potentially costing consumers billions of dollars.
The case, announced by Deputy Attorney General Rod Rosenstein, will allow the Justice Department to continue to pursue enforcement of its antitrust laws, from preying on consumers, to blocking competition that is essential to holding up prices for goods and services, and suppressing wages.
Mr. Rosenstein pledged to “add new tools to our arsenal,” arguing that the monopoly power Google’s search algorithms has gained, since it began dominating the market for internet search, has impacted every aspect of American life. The lawsuit, filed in Washington, charges that Google has kept consumers, advertisers and advertisers’ money locked into its own sites, and that Google has dominated the search market in a way that’s harmful to consumers.
“Our greatest strength, our greatest wisdom is also our greatest weakness: We are who we are by our mistakes,” Mr. Rosenstein said. “And our greatest screwups are our best opportunities to be better people.”
Mr. Rosenstein said that in an era where high-tech has eroded the barriers that once separated information, marketing and retail, Google has created an environment where advertisers cannot compare options. He said that Google users are not taking advantage of a “user experience” where they can receive the best search results based on search activity and user identity.
“Google’s behavior is stifling competition,” Mr. Rosenstein said. “The mere existence of a monopoly company, a company that uses its position to siphon revenue from advertisers to itself, can be anticonsumer, can undermine consumer welfare.”
Jeffrey C. Hunter, acting assistant attorney general for antitrust, explained that Google’s dominance in internet search prevents consumers from getting the most competitive prices and for advertisers to compare costs by seeing a variety of businesses.
“Because users can search for low-cost goods or services, advertisers are competing with themselves,” Mr. Hunter said. “But when Google dominates the market for search results, its high ranking effectively reduces competition and decreases competition for that low-cost ad supply.”
The antitrust lawsuit says that Google, through its use of search algorithms, enables companies to end up paying more to advertisers, or losing their sales.
“The Department’s suit seeks to ensure that monopoly companies do not become even more powerful,” Mr. Hunter said.
The lawsuit follows a probe that the Justice Department launched more than three years ago, with assistance from the Federal Trade Commission. The Justice Department investigation concluded in August.
The government filed two lawsuits in response to that probe, one against Google’s YouTube, and the other against Google’s ad-buying tool, AdWords.
“The companies that compete with Google can’t seem to get along,” Mr. Hunter said. “They’re circling each other. They’re bleeding.”
The antitrust lawsuit also alleges that Google is monopolizing online advertising technology, where many large brands spend the bulk of their ad dollars.
The antitrust suit is based on Section 7 of the Sherman Act, in which a company can be found in violation of antitrust law for engaging in “monopolistic conduct.” The main court, where the case will be heard, is not known, but media reports suggest it is the U.S. District Court for the District of Columbia.