Google faces break-up over US government claims that it violates monopoly law
The US Government has launched a landmark antitrust case against Google which could trigger the break-up of the $1 trillion tech behemoth.
Officials at the Department of Justice (DoJ) accused the firm of building an illegal monopoly and dominating the internet, saying it pays tens of billions of dollars to the likes of Apple and Samsung so it is used as their phones' default search engine.
This allows Google to crush rivals and hammers choice for its customers, the DoJ claimed in its biggest trust-busting action for decades. The case is likely to drag on for years and could ultimately lead to multi-billion dollar fines or even an order to split the business, recalling the break-up of Standard Oil by trustbusters more than a century ago.
Prosecutors claimed that Google had “foreclosed competition for internet search” and that competitors are “denied vital distribution, scale, and product recognition”.
The charges - the most significant against a tech company since the Justice Department’s crusade against Bill Gates’ Microsoft in the late 1990s - called for “structural relief” as a potential remedy to the company’s behaviour, a reference to forcing Google to sell off parts of its business.
The Justice Department’s lawsuit focused on so-called exclusionary agreements that which Google has reached with other tech companies to ensure its search engine is the default choice across the majority of the world’s smartphones and web browsers.
Google said it would aggressively fight the claims, describing the landmark complaint as “dubious” and insisting that its exclusivity deals with manufacturers, telecoms companies and rival web browsers are all a normal part of business.
Kent Walker, Google’s head of Global Affairs said: “Our agreements with Apple and other device makers and carriers are no different from the agreements that many other companies have traditionally used to distribute software.
“Other search engines, including Microsoft’s Bing, compete with us for these agreements. And our agreements have passed repeated antitrust reviews.”
Google - founded in 1998 with the unofficial slogan "Don't Be Evil" - has attracted massive scrutiny over the past decade after a scramble to build supremacy in digital advertising by snapping up companies such as Android, YouTube and DoubleClick. The US charges said Google has cornered more than 70pc of the search advertising market.
The charges mark a new era of antitrust enforcement against Silicon Valley’s big players, with growing scrutiny into Facebook, Apple and Amazon potentially preceding other actions and new laws to limit their growth.
America has largely avoided a crackdown on big tech companies until now, with the European Union becoming the most enthusiastic monopoly regulator.
Brussels authorities have handed the search firm three different fines since 2017 over allegations that it favoured its own shopping results over results from rivals, that its Android software unfairly promoted its own apps, and that it blocked adverts from rival search engines, which Google is appealing.
But none of the European rulings went as far to suggest splitting off Google’s operations into separate companies and critics say this has failed to prevent anti-competitive conduct.
Google, which is worth slightly more than $1 trillion (£773bn), has been preparing for charges for months. Shares in parent company Alphabet were largely unaffected on Tuesday, rising 2pc.
Sally Hubbard, a former antitrust prosecutor for New York state, said that she expects the oncoming legal battle to last years and suggested that Google will use delaying tactics similar to those deployed by Microsoft 20 years ago.
Separate antitrust charges are expected to be filed by a group of US states in coming weeks, which are expected to focus on Google’s digital advertising technology.
