Google and Justice Department Butt Heads Over Lawsuit

By Thomas Price Wednesday, October 21, 2020

The United States Department of Justice has been in a tense feud of words with large tech companies for the better part of the year, at the very least. This finally reached a head on October 20th, when the trigger was finally pulled and an antitrust lawsuit was filed against search engine giant Google. With a list of accusations against the company, Google fired back with equally charged language leading to two very different sides of the same story. What did each side say, what is expected to happen, and how will this affect Google’s stock (if at all)?

outside view of a Google building

What the DOJ Lawsuit has Alleged

The Department of Justice has made lofty claims against Google regarding its search engine and the possible illegal stranglehold it has over its alternative options. The list of allegations includes using anti-competitive tactics in order to maintain a monopoly over the competitors to Google and illegally shutting out other businesses. Some of the specifics of this would include creating a large scale network of interconnected business agreements with other companies to maintain search engine dominance. This is manifested through the billions of dollars spent from advertising revenue toward companies like Apple and Android in order to be the default search engine browser for their products, effectively creating total control of the market. These exclusionary choices have been deemed unlawful, and the Justice Department will argue in their lawsuit for the enforcement of antitrust laws it believes Google is actively breaking. The money paid by Google goes toward funneling search results into their own engine by having it be a default setting on multiple different devices and web browsers, which users are unlikely to change. These investments and agreements have resulted in Google being responsible for a whopping 80% of all online search queries in the United States.

This is not the first time Google has come under fire regarding antitrust laws and regulations. In the European Union, Google has been the centerfold for three different antitrust violations. Each one has resulted in serious fines adding up to a net total of around $9 billion. Google has not taken this new lawsuit from the Department of Justice lying down and released a blistering response to the allegations against them.

Google’s Response to Antitrust Lawsuit

A major point of Google’s response argument is built around the equal availability of all competing search engines to their own on the devices created by the companies in question. While Google openly admits that they do, in fact, pay for priority placement as default search engine, they argue that this does not hinder any consumer from choosing a different one. In fact, Google painstakingly goes through every single different platform in question and shows the exact steps it would take in order to change search engines, both in directions along with accompanying GIFs. What Google constantly emphasizes throughout their response is that people are not using their search engine because they are being forced to, or because there are no alternatives; instead, people use their search engine because they want to.

One of the more difficult things to contend with as well comes from the fact that when antitrust laws were enforced in the past, it was usually to prevent price fixing and gouging that would take place when one company controlled too much of the market share. Google’s search engine service is free, and so are its competitors.

Effect on Stock Prices and Final Conclusions

The news of the Department of Justice filing an antitrust lawsuit against Google is a bombshell announcement that is sure to have lasting consequences, especially depending on the result of the trial. However, at least on the day of its announcement, there were very few changes in stock prices for Google’s parent company, Alphabet Inc. At the close of the day, Alphabet was up 1.39%, a slightly above average day of trading for the company.

While it is not yet clear how exactly this lawsuit will shape up, the boiled over tensions between the massively growing tech companies and the Department of Justice is heading toward a conclusion in one direction or the other. How this will then impact the performance of these companies, and the massive scope they cover, remains still to be seen.

About the Author

Headshot for author Thomas Price

Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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