Google antitrust cases in the US and Europe: an overview

Google now faces several antitrust challenges around the world, including three government lawsuits filed in the U.S. in just the past two months.

Government agencies have been examining the company for years, however, with the European Commission cracking down on the search giant before U.S. regulators catch up. The Commission has already imposed fines of billions of dollars against Google in three different competition cases, which Google has appealed.

Regulators in other countries have also had issues with Google’s competitive practices, such as in Australia, where News Corp has a large presence with top Google critics.

Google also faces a couple of notable antitrust challenges from private whistleblowers. Fortnite maker Epic Games sued Apple and Google separately for alleged anti-competitive practices, including “exorbitant” rates for sales through their mobile app markets. Online publishers Genius Media and The Nation filed a lawsuit on Wednesday claiming that Google hurt their businesses by suppressing advertising competition. They seek the state of collective action.

In all important cases, Google has denied engaging in anti-competitive conduct. Google maintains that its decisions are made to benefit consumers.

These are the main cases of competition against Google to see in the US and Europe:

DOJ

The Justice Department lawsuit closely traces its previous lawsuit against Microsoft in the late 1990s, at least on its surface. They both discuss efforts to maintain the power of the monopoly by linking key distribution channels to competitors and using supposedly exclusive contracts to ensure the default status of their technology on manufacturers ’devices.

The Justice Department lawsuit, filed in October with 11 Republican attorneys general, details the allegedly exclusive contracts Google used to block distribution. One such example in the lawsuit is Google’s contract with Apple to give the default search engine status to Apple devices.

Since its original presentation, California, Michigan and Wisconsin have applied to join the case.

AG of Republican states

Texas led a group of nine Republican attorneys general in a lawsuit focused on Google’s advertising technology business and an alleged anti-competitive deal with Facebook.

The lawsuit, filed Wednesday, alleges that Google used its market power to push advertisers and publishers to use their tools in every step of the ad buying process, to the detriment of consumers.

He also claims that Google struck a deal with Facebook when it learned of its plans to create an ad exchange that could rival its own. States allege that the deal involved Google pairing auctions to benefit Facebook in exchange for keeping the competitive threat at bay. A Google spokesman told CNBC that the claim is inaccurate and that Facebook is involved in exchanges outside of Google.

Bipartisan state coalition

A bipartisan group of attorneys general from 38 states and territories, including Colorado, Iowa, Nebraska and New York, filed a third lawsuit against Google on Thursday. Part of the lawsuit echoes the DOJ’s exclusionary contract claims, but the complaint also goes beyond that initial lawsuit.

The state’s complaint delves into Google’s alleged efforts to block emerging distribution channels, such as smart speakers. He also alleges that Google limits the ability of vertical search providers like Yelp and Tripadvisor to reach consumers through “discriminatory behavior on their search results page.”

The complaint also refers to Google’s advertising tools, which claim that it unfairly disadvantages advertisers by denying them the ability to interoperate between their own advertising tools and those of competitors.

Antitrust Judicial Subcommittee of the House

Although Congress has no powers to enforce the law, the antitrust judicial subcommittee of the Judiciary issued a comprehensive report in October that its authors hope will lead to lasting changes to the law. The report followed more than a year of research on Amazon, Apple, Facebook and Google, which found that each of the companies had the power of monopoly in their respective markets.

The majority report found that Google’s domain functioned “as an ecosystem of intertwined monopolies” that was reinforced by linking different services to extensive user data. Like some of the recent lawsuits, the report found that Google maintains its search monopoly through alleged anti-competitive contracts.

The subcommittee is working on new bills that aim to update antitrust laws in a variety of ways to make them more capable of dealing with modern business problems. The report by Democratic staff found that “the courts have significantly weakened” antitrust laws since they were enacted, leaving Congress with a duty to legislate to return them to their original intent.

Shopping comparison

The European Commission fined Google 2.4 billion euros ($ 2.7 billion) in 2017 after finding that the company violated antitrust rules by allegedly abusing its domain in an attempt to take advantage of its own product comparison purchases with respect to competitors. At the time, the fine was the largest ever issued by the regulator in a monopoly abuse case.

Google is currently in the process of challenging the fine. The European competition regulator may issue a decision before the subject has the opportunity to appeal against the court decision. In the United States, this process is essentially reversed: regulators must ask the court to approve their agreements or to side with them in lawsuits when filing antitrust claims.

Android

The European Commission surpassed its previous record fine against Google in a second antitrust decision targeting Google’s Android mobile operating system in July 2018. Regulators fined Google the equivalent of $ 5 billion for allegedly abusing its dominate Android to unfairly favor their own services. The commission said Google did so in part by forcing smartphone makers to pre-install their apps exclusively.

Google has been appealing ever since.

Online advertising

The third European investigation into Google resulted in a fine of nearly $ 1.7 billion against the company in March 2019 for allegedly stifling competition in online advertising.

The Commission’s claims focused in part on Google’s exclusive contracts with publishers through its AdSense tool that restricted them from advertising by their competitors.

Google has also appealed against this ruling.

While Google faces the threat of possible crashes in the future, it is likely that years will pass before a significant resolution is reached. Once the new cases go through the courts, it is still a long way from ensuring that a judge awards everything drastic, even if he supports the government. It is likely that at least some of the cases against Google will be consolidated, as the bipartisan coalition already indicates that it would file a motion to do so with the DOJ case.

While new laws appear on the horizon that can make the courts more pro-government in these cases, they are far from an immediate threat.

This new demand is likely to have had little impact on Google’s share price. Shares of its parent company Alphabet shot up almost 30% in 2020 and almost 20% in the last three months alone. Investors have become accustomed to examining the trillion-dollar company and the threat is already priced.

However, as long as these lawsuits last, Google will remain under a microscope for every move and acquisition it attempts to make. Just as many believe the Justice Department case against Microsoft in the late 1990s and early 2000s diverted its attention from Google’s growing threat, a growing competitor could thrive again in these circumstances.

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