“Google was targeted Thursday in an antitrust lawsuit joined by 38 states, which alleged that the Alphabet Inc. unit maintained monopoly power over the internet-search market through anti-competitive contracts and conduct,” WSJ writes.
And This Is Happening Because: Well, the states say Google uses its position as the “dominant search engine,” and the useful personal data it gathers in the process, to “limit consumers from using competing search engines, force businesses to use its proprietary advertising tools and foreclose competition from specialized search engines for travel or local businesses.”
- Google has fired back by saying it operates in a competitive market.
The 38 states chose to file in the U.S. District Court in Washington, D.C., where the Justice Department also filed its October suit against Google and its search business.
- Colorado Attorney General Phil Weiser said they would seek to combine the two cases into one.
- Google is also facing another state case in Texas, filed Wednesday.
Google CEO Sundar Pichai: “We have always focused on providing users the most relevant information, and we rely on the trust for users to come back to Google every day.”
Rep. David Cicilline (D., R.I.): “The evidence seems very clear to me. As Google became the gateway to the internet, it began to abuse its power. It used its surveillance over web traffic to identify competitive threats and crushed them,” he said to Pichai at a hearing in July.
The Final Word: It’s going to take years for this to play out, especially with a new administration coming in, so don’t hold your breath.
We at ROIC are on the sidelines with $GOOG stock. From the reports I’ve read, the findings look relatively damning, and it is unclear how Google’s long-term advertising business model will be affected by a smackdown. At least Facebook and Instagram are their own networks in which they can insulate advertising strategies. Google relies much more on generalized internet data usage.