Officials At The Justice Department Are Focused On Google’s Ad Business, How It Has Used Its Search Dominance

Officials At The Justice Department Are Focused On Google’s Ad Business, How It Has Used Its Search Dominance

Officials at the U.S. Justice Department are focused on Google and its advertising business — how it has used its search dominance. Credit: Moguldom

Tech companies Google, Twitter and Facebook are in the spotlight these days. President Donald Trump signed an executive order targeting social media companies just days after Twitter labeled two of his tweets as misleading.

“A small handful of social media monopolies controls a vast portion of all public and private communications in the United States,” Trump said from the Oval Office before signing the order. “They’ve had unchecked power to censor, restrict, edit, shape, hide, alter, virtually any form of communication between private citizens and large public audiences.”

Many are questioning Trump’s authority. The executive order is a long-shot legal bid that seeks to curtail the power of large social media platforms by reinterpreting a critical 1996 law that shields websites and tech companies from lawsuits, CNN reported. Legal experts say it may be unconstitutional because it risks infringing on the First Amendment rights of private companies and because it tries to circumvent the two other branches of government.

The U.S. Justice Department is weighing when to bring antitrust lawsuits against Google. If it does so, it would be one of the biggest antitrust actions by the U.S. since the late 1990s when the Justice Department joined 20 states to sue Microsoft, The New York Times reported. The Justice Department accused Microsoft of illegally protecting its operating-system monopoly and seeking a new monopoly for its own browser, Internet Explorer. Both parties settled in 2001.

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The Justice Department and a group of state attorneys general are leaning toward filing anti-trust lawsuits against Alphabet Inc.’s Google, according to sources familiar with the matter.

The Justice Department may take action by summer, while some state attorneys general — led by Texas Republican Ken Paxton — will probably file in the fall, The Wall Street Journal reported.

The lawsuits are expected to claim that Google’s search-tool dominance is used to stifle competition, sources said. This gives it a major advantage when it comes to advertising. Google controls around 90 percent of all web searches globally.

The Google probe has been ongoing for some time. Attorney General William Barr said he hopes the Justice Department will make a final decision within months. “I’m hoping that we bring it to fruition early summer,” Barr told The Wall Street Journal in March, “And by fruition I mean, decision time.”

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In Texas, Paxton said things have been moving ahead. “We’ve issued (civil subpoenas) to Google and impacted third parties. We hope to have the investigation wrapped up by fall,” he said in a statement. “If we determine that filing is merited we will go to court soon after that.”

Google has responded. A company spokesperson told Wall Street Journal recently, “We continue to engage with the ongoing investigations led by the U.S. Department of Justice and Attorney General Paxton, and we don’t have any updates or comments on speculation. Our focus is firmly on providing services that help consumers, support thousands of businesses, and enable increased choice and competition.”

The potential lawsuits against Google could set a precedent and a benchmark for how regulators and lawmakers investigate other large tech companies such as Facebook and Amazon.

The Federal Trade Commission, state attorneys general and Congress are scrutinizing big tech for their market power and corporate behavior, the New York Times reported.