The Hustle

The US Government v. Google: What you need to know

Google screenshot


October 21, 2020

Finally, we can party like it’s 1998.

In the biggest US tech antitrust action since the government took on Microsoft and Bill “Don’t call me Dollar Bill” Gates, the Department of Justice (DOJ) filed an antitrust suit against Google on Tuesday.

What’s the allegation?

According to the Wall Street Journal, Justice officials will lay out the case that Google is abusing monopoly positions in search (~80% of US search volume) and search advertising.

The DOJ claims the company is acting as a gatekeeper and shutting out competition by: 

Predictably, Google has called the suit “deeply flawed.”

The stakes are huge

A similar investigation by the Federal Trade Commission in 2013 never made it to court. But the DOJ suit could set a huge precedent:

Don’t expect anything overnight, though. It took 3 years to reach an agreement with Microsoft.

Google will be deploying its some of its $120B in cash to fight this case

As we previously covered, the company has a ready-made defense.

The US government recently sued American Express for charging merchants high fees, but the payments firm won the case by saying it was a “net positive” across its entire network (e.g., customers get points).

Google certainly has a claim. One study showed that consumers would have to be paid $17.5k a year to give up search.

Either way, this brings back memories of 1998. One other thing that happened that year? Larry Page and Sergey Brin founded Google.

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