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Daily News Analysis

Google Antitrust lawsuit: All you need to know

23rd October, 2020 GOVERNANCE

Context: The U.S. Justice Department accused Google of partnering with Apple, and other companies, to ward off competition by striking exclusive business contracts with them.

  • The U.S. Justice Department claimed that goggle illegally maintained monopoly over search and search-related activities.

What is the Justice Department’s claim?

  • The Justice department claimed Google’s 80% market share in search engine business was made possible by the deals it struck with smartphone makers, which helped it put its search service as default for users.
  • Google spent billions of dollars from its advertising revenue to pay for mobile manufacturers, carriers and browsers to make Google as their pre-set search engine.
  • This meant that Google held top position in search of millions of devices, making it difficult for other search engines to establish themselves.
  • The lawsuit accused Apple and Google of being reliant on each other, and edging out rivals from the market.
  • The department noted that almost half of Google’s search traffic in 2019 came from Apple’s devices, while about a fifth of Apple’s annual profit came from Google.
  • The complaint also alleged Google of restraining innovation, reducing choice and degrading the service quality such as privacy data.
  • Google has used anticompetitive tactics to maintain and extend its monopolies in the markets for general search services, search advertising, and general search text advertising-the cornerstone of its empire.
  • The lawsuit has been filed amid a wider questioning of big tech companies’ dominance, and comes after more than a year of investigation by the Justice Department.
  • Other states and jurisdictions are also expected to file separate complaints against the company.

What is Google’s defense?

  • Google called the lawsuit ‘deeply flawed’. It claimed that “People use Google because they choose to, not because they’re forced to or because they can’t find alternatives”.
  • The lawsuit would, in turn, harm the consumers as it would artificially prop-up lower quality search alternatives and raise phone prices.
  • Google say its services are offered to customers with little or no cost, eliminating the potential price harm in the antitrust argument.

Expected Outcome of the case

  • It is unlikely that the tech giant would refrain from a legal fight as it has fought similar antitrust lawsuits in Europe.
  • The last similar antitrust case in 1998 against Microsoft Corp. eventually resulted in a settlement.