DOJ antitrust suit: Google uses contracts, market power to neutralize rivals

Google believes it will win, but the Department of Justice has used these arguments successfully in the past.

Attorney General Janet Reno has said for more than 20 years, “Microsoft is using its Windows monopoly to protect and expand that monopoly.” This preceded the government’s successful antitrust case against the company. Today, the Trump administration uses Microsoft’s textbook and similar antitrust arguments under the Sherman Act against Google.

After about 16 months of investigation, the Department of Justice (DOJ) and 11 attorneys general have filed a long-awaited antitrust lawsuit, but they have urgently filed lawsuits against Google with a series of competitive and monopolistic antitrust practices. In a press release, US Attorney

General Barr compares Google to former Microsoft:

Twenty-five years ago, the Department of Justice sued Microsoft and paved the way for a new wave of innovative technology companies, including Google. The growing competition after Microsoft’s case turned Google into an internet giant from an early age. Unfortunately, Google used the same domain after Google acquired the domain. If we allow Google to stay competitive, we will miss the next wave of innovators, and Americans may not benefit from the ‘next Google’. It is time to restore competition in this important sector.

Attorney General’s statement announcing civil antitrust action against Google

The request was made two weeks after the House subcommittee on antitrust released a report identifying Google as a system of ‘interconnected monopolies’. This report also revealed critical findings on Facebook, Apple, and Amazon, which have not (yet) been prosecuted by the government.

Google: “a very flawed process”

Google responded to the DOJ process by calling it “very flawed”, arguing that “it will not help consumers”. Google’s senior vice president of world affairs, Kent Walker, said in a blog post: “People use Google not because they need it, but because they want to.” The company also states that if the process is successful, it can support alternative search options, increase phone prices and make it difficult to find the search services you want to use, that is, instead of using the search engine, search your damages. . consumer to alleviate it. , would cause damage.

The complaint of almost 60 pages is mainly focused and repeats the following arguments:

• Google imposes illegal monopolies on “search services in general, search ads and ad types in general”

• Google uses revenue sharing, direct payments, and restrictive contracts to prevent competitors from spreading widely and competing effectively

• The company uses its ability to force mobile phone manufacturers to pre-install Google Apps if they want access to the Google Play Store

The complaint appears in the Apple-Google research report. It contains interesting but not attributable facts, such as’ Google estimates that nearly 50% of search traffic in 2019 will come from Apple devices. The complaint also examines the variety of Android contracts and how they should use a combination of ‘incentives and fines. “to help. Google to keep track of Android’s open-source ecosystem.

Definitive ideas for consumer harm

“Google’s antitrust measures have had a negative impact on competition and consumers,” the complaint reads. In an interview with reporters yesterday, Google tried to contradict the statement: ‘The Department of Justice can not harm consumers; this is unprecedented [in antitrust cases].

Therefore, Google believes that there is no evidence of harm to consumers. The company claims that its services are free or accessible (Android phones) and benefit consumers in various ways. These free or accessible services are subsidized by the Google advertising company, and Google says the U.S. government is threatening these consumer benefits with its lawsuit.

Damage to consumers (often in the form of price increases) must be proven to be a violation of Sherman law.

Examples of malicious Google actions include:

• Reduce the quality of general search services (including dimensions such as privacy, data protection, and use of consumer data), reduce the choice of general search services and hinder innovation.

• Prevent the proliferation of innovative applications that provide search features that Google would otherwise do

 “60% of Google Shopping starts on Amazon”

An important point of the process is the health and viability of competition in Google’s markets. Google marginalized or neutralized it, says the DOJ, citing Google’s market share in searches. But Google says the law doesn’t benefit competitors, but consumers.

The DOJ says Google’s exclusion agreements helped stop the spread and received nearly 90% of all global searches on US search engines and nearly 95% of searches on mobile devices.

Google says the DOJ is very limited to a few competitors: Bing, DuckDuckGo, and Yahoo. Google claims to be short-sighted and competes with many specialty sites, such as Amazon, Yelp, Kayak, and TripAdvisor, as well as “search engines”. Google also mentions Pinterest as a competitor. With a link to reporters to show that Google doesn’t always win, the company cited a survey showing that the majority (60%) of product searches start on Amazon.

Yelp and Tripadvisor have released statements in support of the process. TripAdvisor board member Seth Kalvert said in an email: “Google generally uses its own domain to divert reckless consumers to other businesses at the expense of the competition … The rates currently offered are only useful for customers. . prevent Google from abusing the managers of the services it owns and increase its profits at the expense of competition and consumers. “

One of Yelp’s biggest complaints is that Google has shifted traffic to its vertical content, not to third-party sites (for example, Yelp). The Justice Department’s complaint says, “Google kept putting organic links on the results page, which led to more results for vertical or specialized search ads and search directory listings. This flattened the links. Part of the search results. SERP is only visible when the user is offline. Browse) and ask them to purchase more Google Search Ads to stay relevant. “

We like consumers more

As in discussions of market size and consumer disadvantage, there are dichotomous characteristics of refinement and user engagement. Google says the lawsuit offends Americans because they describe themselves as passive, unscrupulous, and unable to make their own choices simply by using standard search engines or programs pre-installed on their devices.

By comparison, the government says Google won’t invest billions of dollars in these pre-installed standard transactions if that doesn’t protect market share. “For a generic search engine, it is by far the most efficient way to be the default global search engine entry point for computers and mobile devices. Even though users can switch models, they rarely do ”. Exclusivity “. The engine”.

Google cites statements from Apple executives about the quality of search results to say that the relationship with Apple is about the best user experience and not just paying to play. Google also cites Firefox’s default search engine with Yahoo in 2014 as evidence that consumers confirm this option over other search engines: “When Yahoo was the default search engine in the Firefox browser, most people chose the first option: Google “.

The beginning of a long road

The government breathes new life into Microsoft’s manual because it worked last time, although Microsoft’s ultimate fix was a win. The cases are not 100% comparable, but many of the contractual claims are similar.

The solution proposed before Microsoft was founded was to split the company in two. In the case of Google, the DOJ advocated, among other things, “structural relief”. This could hypothetically mean that the company is falling apart. But nowhere in the complaint did the Justice Department mention Google’s divorce.

Google is confident it will win in court immediately. But the DOJ complaint is convincing enough and points to some non-Google evidence in its email and internal slides.

If Google doesn’t believe the government has a case, it is less likely to reach a settlement and take risks in court. If so, it can take up to two years or more to make an initial decision,

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