The lawsuit marks the third competition case that U.S. regulators have filed against the search-and-advertising behemoth since October, reflecting the rising unease with Google’s massive profits and expansive reach — and the growing national dissatisfaction with Silicon Valley writ large.
In the latest legal salvo, Democratic and Republican attorneys general from 38 states and territories led by Colorado and Nebraska took aim at a broad swath of Google’s digital empire. They claim that Google has solidified its monopoly in search — capturing roughly 90 percent of all queries — through an array of anti-competitive tactics that have created a “moat around its kingdom.” Chief among them are the special deals that Google inks to ensure it is the default option on many web browsers, smartphones and newer connected devices, such as smart televisions and speakers.
State investigators also faulted Google for the way it presents its search results, which often requires companies to purchase ads to rise to the top of users’ pages. In doing so, state leaders charged Google is able to drive adoption of its own advertising products, enriching its bottom line and further entrenching its dominance.
“Google’s anticompetitive actions have protected its general search monopolies and excluded rivals, depriving consumers of the benefits of competitive choices, forestalling innovation, and undermining new entry or expansion,” said Phil Weiser, the Democratic attorney general of Colorado. “This lawsuit seeks to restore competition.”
Google did not immediately respond to a request for comment.
The heightened scrutiny marks a stunning turn of fortunes for Google, which for years managed to dodge U.S. antitrust scrutiny. Nearly a decade ago, federal watchdogs similarly probed Google out of concern it had been acting anti-competitively — yet a government agency concluded its inquiry in 2013 without bringing a case against the company and its sprawling search business. The U.S. ultimately stood alone in opting against seeking massive penalties against Google, even as European regulators issued a battery of punishments — and roughly $9 billion in fines — over allegations that the tech giant acted anti-competitively.
Now, though, Google faces a political and regulatory assault aimed at the very heart of its business. On Wednesday, Texas Attorney General Ken Paxton led nine fellow Republican officials in suing Google over its advertising practices, claiming the tech giant illegally sought to suppress competition and reap massive profits from targeted advertisements placed across the Web.
Not even two months earlier, the Department of Justice filed its own antitrust case. The complaint took aim at Google’s special arrangements to ensure its search engine is set as the default option on a wide array of devices, including Apple’s iPhone, and services, such as the Mozilla Firefox web browser. Google denies the charges that its practices violate federal competition laws.
On Thursday, Colorado, Nebraska and other states’ attorneys general said they would seek to consolidate their lawsuit with the Justice Department’s earlier complaint so that the cases would be argued together. Much like the earlier lawsuits, the Democratic and Republican state leaders opened the door for a judge to order broad penalties, including potentially forcing Google to sell off its business. They stopped short of calling explicitly for Google to be broken up.
“It’s not that people use Google. It’s that Google uses people,” said Nebraska Attorney General Doug Peterson (R) at a news conference.
Search represents the historical and financial core of Google’s empire: It generated $98 billion in revenue for the company last year, which the states said dwarfed the gross domestic product of 129 countries and 46 states. To preserve those profits — and maintain its monopoly — the attorneys general said Google for years has turned to a series of illegal, exclusionary practices.
With its massive financial war chest, Google has long paid a wide array of companies — including its own competitors — to ensure it is the default search service on many products and services. The company pays Apple, for example, between $8 and $12 billion annually to be “enthroned” as the preset search engine on the company’s iPhone devices, the attorneys general allege.
Investigators estimate that Google’s special deals have helped it become the default search service on 80 percent of web browsers. It has tied its search engine to the Android operating system, further pushing its service to billions of smartphone users worldwide. And Google has expanded its exclusionary deals to home assistants, ensuring the next generation of search tool — from smart speakers to connected car — also generate traffic for Google.
“Google sits at the crossroads of so many areas of our digital economy and has used its dominance to illegally squash competitors, monitor nearly every aspect of our digital lives, and profit to the tune of billions,” said Letitia James, the Democratic attorney general of New York, one of the eight state leaders driving the Google case.
Google’s special deals have created special headaches for companies including Yelp, a reviews site, and TripAdvisor, a travel search service, which for years have asked regulators to intervene. These firms generally must rely on Google in order to attract traffic and customers. But Google heavily restricts these companies in the way they can advertise— and even in their ranking on the search results page – in a move that state officials said seeks to constrain their growth. In the process, Google promotes its own restaurant reviews and travel offerings, the lawsuit argues.
“Bringing an antitrust case against the most powerful company in the world requires determination and courage, so we applaud the cooperative, bipartisan work of the state attorneys general and all the staff involved in this lawsuit,” said Luther Lowe, the senior vice president for public policy at Yelp. “We hope today’s action is the beginning of a return to a more vibrant and open Internet.”
The antitrust lawsuits against Google have coincided with a broader regulatory reckoning across Silicon Valley. State and federal officials announced last week two wide-ranging antitrust lawsuits against Facebook, alleging the social-networking giant sought to buy, bully or kill its rivals, harming competition and leaving users with few other options online. The lawsuits called on a federal judge to consider breaking the company up, setting up a massive battle to come between the U.S. government and one of Silicon Valley’s most powerful firms.
Federal regulators — and lawmakers on Capitol Hill — also have probed Apple and Amazon over competition concerns. And some federal policymakers have sought broad revisions to federal antitrust law, hoping to make it easier to prosecute competition abuses in the future. (Amazon CEO Jeff Bezos owns The Washington Post.)