The U.S. Justice Department is reportedly preparing a major antitrust complaint against Google and is briefing state officials who are working on their own lawsuit.
Bloomberg News cites people familiar with the matter in reporting that the briefing will take place Wednesday between federal investigators and 48 state attorneys general. The report says the result could be the largest antitrust suit since 1998 when the U.S. government claimed Microsoft was a monopoly.
Consumers may wonder what the fuss is about since Google is the go-to search engine and it doesn’t cost anything. They might also note that the company’s YouTube platform can provide hours of free entertainment. But for antitrust regulators, those points are part of the issue.
By offering its services at no cost to consumers and dominating the sectors in which it operates, regulators may charge Google of stifling competition. The government made similar accusations against Microsoft in 1998 when it pointed out that giving consumers a free web browser in Windows put other browser makers out of business.
Bloomberg reports that Justice Department officials will brief the state officials on the case against Google as a first step in inviting them to join the suit. The 48 states are believed to be pursuing their own cases against the tech giant.
A joint suit could pose a larger threat to Google since the federal case is reportedly focused on Google’s dominance in the area of search while the states have focused more on Google’s major role in online ad revenue.
Google is among the tech companies that have come under close scrutiny in Congress since they have gotten bigger, richer, and more dominant in their industries. In February, Google was among those ordered by the Federal Trade Commission (FTC) to turn over documents about its acquisition of other companies.
Reason for acquisitions is key
At issue is whether the acquisitions of these smaller companies were designed to support a company’s main mission or were intended to remove potential competitors from the field. At the time, regulators were believed to be looking closely at Facebook’s acquisitions of Instagram and Whatsapp.
Last November some members of Congress expressed concern when Google announced plans to acquire Fitbit, a company making a popular health monitoring wearable. At the time, the House Judiciary Committee’s antitrust subcommittee called Makan Delrahim, the head of the Justice Department’s antitrust division, to brief lawmakers.
Delrahim said the department is trying to sort out a number of things that drive these companies’ profits, including personalized advertising that makes use of consumers’ data. He said Justice Department attorneys were investigating how large tech companies gained their monopoly power.