The Justice Department sued Google Tuesday, accusing the company of illegally abusing its internet search dominance in a way that harms competitors and consumers.
The lawsuit is the first antitrust lawsuit against the Alphabet-owned company resulting from investigations by the Department of Justice, Congress, and 50 states and territories. Attorneys-general and federal officials have also investigated Google's behavior in the online advertising market. And a group of states are investigating a broader search case against Google.
Here's what you need to know about the suit.
What is really going on here?
This is a move against a single company. But it is also an answer to the political question of what measures, if any, should be taken to contain today's tech giants, which have the power to shape markets, communications and even public opinion.
Politics controlled the timing and shape of this suit. Attorney General William P. Barr wanted to act quickly to take pre-election action and deliver on President Trump's promise to take over big tech. Eleven states joined the lawsuit.
What does the Justice Department say what Google did illegally?
This is a monopoly defense case. The government says Google is illegally protecting its dominant position in the search and search advertising market with the deals it has made with companies like Apple. Google pays Apple billions of dollars a year to make its search engine the default option for iPhones and other devices.
The Justice Department is also questioning contracts that Google has made with smartphone manufacturers that use Google's Android operating system. Therefore, they have to install the search engine by default.
The Justice Department also examined Google's behavior and acquisitions in the overall digital advertising market, including search, web and video ads. Online advertising was the source of virtually all Alphabet's $ 34 billion in profits for the past year.
However, the search case is simpler and gives the government the best chance of winning. To prevail, the Justice Department needs to show two things – that Google dominates search and that its dealings with Apple and other companies stifle competition in the search market.
What will Google's defense be?
In short, we are not dominant and competition on the internet is just a click away.
This is the essence of recent statements from Google executives in Congress. Google's share of the US search market is around 80 percent. But just looking at the market for "general" search, the company says, is short-sighted. Almost half of online shopping searches start on Amazon.
Next, Google says the deals the Justice Department cites are completely legal. Such company-to-company transactions only violate antitrust law if it can be demonstrated that they exclude competition. According to Google, users can freely switch to other search engines such as Microsoft Bing or Yahoo Search at any time. According to Google, the search service is the runaway leader because people prefer it.
What harms the consumer if the Google search service is free?
The government believes that consumer harm can arise in a number of ways. Less competition in a market means less innovation and less choice for consumers in the long run. In theory, this could close the market for competitors who collect less data for targeted advertising than Google does. For example, improved privacy would be a benefit for consumers.
Goods that are free for consumers are not exempt from antitrust supervision. In the groundbreaking Microsoft case at the end of the 1990s, the software giant bundled its web browser into its dominant Windows operating system for free. Microsoft lost because it used restrictive contracts to bullied personal computer manufacturers and others to prevent them from offering competing web browser software – a competition that could have undermined the Windows monopoly.
What happens next?
If the government and Google fail to reach an agreement, they will be brought to justice. Legal and appeal proceedings in such cases can take years.
Regardless of the result, one thing is certain: Google will be subject to constant scrutiny for a long time to come.