January 24, 2021

Building Your Inovation

40 more states target Google with its third antitrust lawsuit in two months

Forty attorneys general representing both Republican and Democratic-led states and territories have filed a new...

Forty attorneys general representing both Republican and Democratic-led states and territories have filed a new antitrust lawsuit against Google claiming that the company has “virtually untrammeled power over internet search traffic,” as a result of its “overwhelming and durable monopoly in general internet searches.”

The move comes one day after  another complaint filed by Texas and nine other states, and follows a lawsuit filed in October from the Department of Justice. 

Today’s lawsuit, led by Colorado, focuses on three categories of allegations. The first is that Google has signed multi-million dollar agreements to ensure that its search is the default for consumers. Second, the suit argues that its advertising exchange platform does not provide neutral options to advertisers. Third, the filing accuses Google’s search results of giving its own products an advantage over those  from competitors. The suit also expressed concerns about how user data has become a new currency, without which the barrier of entry is too high for new competitors to enter the market. 

 “Cash is no longer the only form of currency, and rather than mining and monetizing a scarce resource such as oil, the attention economy is based on mining and monetizing knowledge about what is inside the minds of individual users,” the lawsuit explains. 

This negatively impacts both consumers and advertisers, said Phil Weiser, the attorney general of Colorado, with consumers “denied the benefits of competition, including the possibility of higher quality services and better privacy protections,” and advertisers “harmed through lower quality and higher prices that are, in turn, passed along to consumers.” 

Why are there so many lawsuits?  

The lawsuits are the result of a joint investigation into potentially anticompetitive practices at Google launched in September 2019 involving 48 states, as well as Washington DC and Puerto Rico. 

Sally Hubbard, the director of enforcement strategy at the Open Markets Institute, explained that the “divide and conquer strategy” is due to resource constraints, “with different enforcers focusing on different aspects of Google’s monopolization.” 

What took so long? 

While the three lawsuits against Google this year—in addition to lawsuits and investigations against Facebook, Amazon, and Apple—represent a significant turning point in antitrust regulation and enforcement in the United States, this is far from the first time that these companies have come under scrutiny. 

In 2013, the Federal Trade Commission decided not to act against Google, despite finding evidence that “Google took aggressive actions to gain advantage over rival search providers.” As Beth Wilkinson, outside counsel for the Federal Trade Commission put it, “the FTC’s mission is to protect competition, and not individual competitors.”

While the US has been slow in regulating major technology companies, other jurisdictions—especially Europe—have taken regulatory actions in recent years, including $9 billion in fines. 

The change has come amid growing concerns about the outsized influence of big tech on American life, with an October 2020 Pew research poll showing that seven in 10 Americans believe that social media companies have too much influence in American politics.

So what happens next

Weiser, Colorado’s attorney general, has already indicated plans to consolidate this suit with the Department of Justice lawsuit, and an initial case hearing to do so is scheduled for Friday. This lawsuit seeks “to unwind any advantages that Google gained as a result of its anti-competitive conduct, including divestiture of assets as appropriate,” which could include a break-up. 

While the lawsuits against Google are collectively, the largest, the company is not the only tech giant in facing ire. Last week, two separate lawsuits were filed against Facebook by the Federal Trade Commission and 47 U.S. states. Investigations into Apple and Amazon are also under way by the DoJ and FTC respectively. What regulating or breaking up these companies looks like is still a complicated question.

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