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Tuesday, May 18, 2021

Will an antitrust lawsuit against Google work?

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Soon after it became public in early May, news reports warned that the Justice Department might sue to break up Google. At the time, it seemed like common sense to speculate the government would argue that Google is “walling” users off from competitors. Other groups suggested Google’s historic domination of online search might be considered an unfair monopoly.

Later, the Justice Department’s antitrust chief, Makan Delrahim, explained his position. Speaking at the Yankee Management Association, he said, “My view is that we are concerned primarily that Google uses its dominant position to discourage other companies from competing with it, especially in comparison shopping.” He said the department was examining whether Google was “attempting to undermine” an online shopping service it had joined with other companies.

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The Justice Department had been investigating possible anti-competitive actions by Google’s AdSense program, which allows others to sell text ads alongside Google’s search results. Google disclosed in 2015 that it had agreed with some advertisers not to compete with their text ads, as long as they teamed up with Google. That claim has already been the subject of a Supreme Court ruling.

The Justice Department’s backing of Delrahim led Google to move some of the investigation, officially known as an investigation inadmissibility for antitrust purposes, back to the Federal Trade Commission.

Search dominates the internet. In September, Google processes 75 percent of searches worldwide.

In 2015, a bipartisan Senate investigation released a 150-page report concluding that Google and its competitors “are engaged in a prolonged and increasingly bitter turf war for control of the search engine market.” Among other findings, the investigation found that Google “had nearly insurmountable barriers to entry in the search market for internet-based search providers.”

The next year, the Senate’s report also found that Google sometimes treated its competitors unfairly. It said Google promotes its own products and specialised search services — such as shopping — over competitors. The report drew on complaints from online advertisers, search engine users and industry groups. The FTC said in August it was investigating “potential anticompetitive conduct by Google.”

So does the Justice Department’s antitrust lawsuit against Google have a chance of success? The debate isn’t over. But given its scale and complexity, antitrust proponents think it’s an unlikely short-term hit for Google.

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