On Tuesday, Oct. 20, the Justice Department (DOJ) followed through with their promise of an antitrust lawsuit against Google. The reason lies in accusations of monopolistic behavior, and this lawsuit is one that the U.S. has been proposing for quite some time.
All about the Google lawsuit from the DOJ
The DOJ officially sued Google—a unit of Alphabet, Inc.—on Tuesday in a Washington, D.C. federal court house. In the document, the U.S. cites the reason for the lawsuit as Google's overt use of anticompetition.
1975: Microsoft founded— Ben Thompson (@benthompson) October 20, 2020
~22 years later~
1997: US v Microsoft filed
1998: Google founded
~22 years later~
2020: US v Google filed
Apparently being sued for antitrust is like graduating from college for tech companies.
The document reads, "The Google of today is a monopoly gatekeeper for the internet, and one of the wealthiest companies on the planet, with a market value of $1 trillion and annual revenue exceeding $160 billion. For many years, 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 cornerstones of its empire."
Of course, representatives from Google say the lawsuit is flawed from the outset, and that their success rests on consumer choice. The company was born 22 years ago in a San Francisco garage.
What does antitrust mean?
The DOJ gives one example in particular to showcase Google's alleged monopoly. The company uses billions of dollars (which they receive from search engine advertisements) to pay for their position as the default search engine on a variety of phones, carriers, and browsers. This includes Apple mobile devices and Safari browsers. This becomes anticompetitive because the company uses capital to continuously reinforce their leading position without allowing for necessary market competition.
Google gets talked about less than Facebook or Amazon in this regard, but its business model definitely raises a lot more conventional antitrust questions than either company.— Matthew Yglesias (@mattyglesias) October 20, 2020
While the lawsuit has just been delivered, the DOJ has been working on preparations for more than a year. As for what could happen to Google, it all depends on the court's decisions. If a judge determines that Google is, indeed, behaving in a monopolistic fashion, the company may be forced to restructure aspects of their business and make room for competitors.
In the U.S., Google's most prominent competitor is Bing, though the latter holds a much smaller portion of the market.
Who is the Google CEO?
Today, the CEO of Google is Sundar Pichai. Pichai has held his role since Oct. 2015, when he took the place of former Google CEO Larry Page. At that time, Page went on to lead Alphabet, Inc. as a whole, but Pichai took his place in 2019. Today, Pichai runs both Alphabet, Inc. and Google.
The news seemed to only boost Google's stock price
At market open on Oct. 21, Google's stock had a per-share value of $1,571.42. This is an increase of 3.28 percent from the previous close, and a total increase of 5.18 percent from Tuesday's open. The Google antitrust law from the DOJ has boosted the company's stock, though it's too soon to say for how long.