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Google Justice Department antitrust lawsuit explained: This is what it means for you

The Justice Department on Tuesday charged Google with stifling competition and harming consumers in online search and advertising in violation of antitrust laws.

It is the most significant legal offensive since the landmark case against Microsoft nearly two decades ago. It is also the first action to result from investigations by the Justice Department, Congress and state attorneys general. A group of states is pursuing a separate inquiry.

Why is DOJ going after Google?

This is the first lawsuit following President Trump’s pledge to take on the global influence of Big Tech. Attorney General William Barr is bringing the case before the election. Eleven states have joined it.

The Justice Department spent more than a decade taking on Microsoft and the case it's bringing against Google echoes its predecessor. Microsoft settled that marathon litigation in 2001 after appealing a judge’s ruling that it violated antitrust laws by bundling Internet Explorer with Windows.

"I suppose the Justice Department is telling the court, 'You don’t have to be scared of this case. You’ve done it before,'" says William Kovacic, a George Washington University law professor and former Federal Trade Commission chairman. "This is Microsoft part 2."

What does the Google lawsuit allege?

Google is owned by Alphabet Inc., which has a market value just over $1 trillion. The federal government argues Google unfairly dominates online search and advertising to the detriment of consumers and competitors and that it has struck lucrative deals to maintain its 90% control of the world’s online search market.

For example, Google pays Apple billions of dollars a year to have its search engine as the default on iPhones and other devices. The Justice Department also says Google has contracts with smartphone makers that use Google’s Android mobile operating system to make its search engine the default there, too.

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Google’s dominance in digital advertising – nearly all of Alphabet’s $34 billion in profit last year came from it – is also at issue. 

“Google is the gateway to the internet and a search advertising behemoth,” U.S. Deputy Attorney General Jeff Rosen told reporters Tuesday. “It has maintained its monopoly power through exclusionary practices that are harmful to competition.”

The lawsuit has support from consumer advocates. George Slover, senior policy counsel at Consumer Reports, said he hopes the Justice Department is ready to challenge the massive power of Big Tech that for years has gone unchecked.

“These powerful online platforms that connect us all on the internet must be held accountable, and competition must be protected, so that the marketplace works for consumers and for all who seek to reach them online," Slover said in a statement.

So what does Google say?

Google says the government’s antitrust case is “deeply flawed” and these agreements it strikes don't box out competitors.

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Google says there’s plenty of choice and competition. Users can switch to other search engines such as Microsoft’s Bing or Yahoo Search if they want. Most of Google’s services are offered for free (albeit in exchange for personal information that helps Google sell ads).

Google's argument: This is not the 1990s. People are savvy consumers who can easily switch apps and change defaults. They elect to use Google even when it’s not the default option because it’s the most helpful, not because they have to because the search results are better and the advertising more relevant, Google says.

Google also contends that there is “fierce” competition in digital advertising. “We compete for advertising dollars every day,” against Amazon, Apple, Facebook and all kinds of rivals every day, Google says.

And, warns Google, should the DOJ prevail, it could become harder for people to get quality search results and phone prices could go up. 

What does the antitrust lawsuit mean for you?

This is just the start of a lengthy legal battle. A trial could take 12 to 18 months and subsequent appeals could take years. So the lawsuit won’t have an immediate effect on internet users. But hanging in the balance is a potential breakup of the internet search and advertising company. And that could produce benefits for consumers, legal observers say.

"While this is a long and uncertain road, in the end consumers have a serious chance at getting fairer, less biased results and companies have a serious chance at getting fairer treatment as to search results and the use of their information," said Spencer Weber Waller, director of the Institute for Consumer Antitrust Studies at Loyola University Chicago School of Law. 

But is it really possible to disrupt America's dependence on Google?

Faced with more and better choices, consumers might not stick with Google, says Fiona Scott Morton, a professor of economics at the Yale University School of Management and former chief economist in the antitrust division of the U.S. Justice Department.

“Monopolies don’t deliver the price, quality and innovation that consumers want. The government has explained in their complaint that Google has used anti-competitive tactics to keep other search engines out of the market and keep other search engines from gaining scale and becoming high quality. And what that does is leave them the monopoly and that leaves consumers without choice and not as much quality and not as much innovation," she said.

Christopher S. Yoo, director of the Center for Technology, Innovation & Competition at the University of Pennsylvania, is less sure. He says consumers switch to Google even when it's not the default search engine.

“This means that courts will have to do the hard work of disentangling whether Google’s market position results from its superior product or from the conduct forming the basis of the government’s case," he said.

If the DOJ prevails, Mark Patterson, an antitrust law professor at Fordham University, says consumers could get phones, computers or browsers that are not pre-set to Google. 

“Many of them will switch back, I expect, so I think the effect will be minimal," Patterson said.

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