Google Said to Be Facing a Potential Antitrust Investigation From US Justice Department

 

The Justice Department has taken early steps toward opening a federal antitrust investigation into Google, according to three people familiar with the matter, marking a new chapter in the tech giant’s war with regulators around the world who contend the company is too large and threatens rivals and consumers.

The move thrusts Google back under the regulatory microscope in the United States roughly six years after another federal agency probed the search and advertising behemoth on grounds that its business practices threatened competitors — though the government spared the company from major punishments.

The DOJ’s antitrust division, led by Makan Delrahim, did not immediately respond to a request for comment. Google declined comment. The news was first reported by The Wall Street Journal.

The exact focus of the DOJ’s investigation is unclear. The DOJ began work on the matter after brokering an agreement with the government’s other antitrust agency, the Federal Trade Commission, to take the lead on antitrust oversight of Google, according to the people familiar with the matter, who spoke on condition of anonymity because the deliberations are confidential. The FTC did not respond to requests for comment.

The DOJ’s probe could threaten Google with a harsh examination of its sprawling digital empire, which ranges from its dominant position in search and advertising to its Android mobile operating system and newer gambits, such as self-driving cars and drones. Its expansive, data-hungry footprint increasingly has drawn the attention of Democrats and Republicans on Capitol Hill, who say that Google — and some of its peers in Silicon Valley — have become too large and should potentially be broken up.

Some Democrats seeking the presidency in 2020, such as Sen. Elizabeth Warren, D-Mass., have explicitly threatened more oversight of the tech industry if they win the White House. The Trump administration has also studied Silicon Valley: The DOJ convened state attorneys general last year to explore the competition concerns posed by Google and other big tech companies. Some of those state attorneys general expressed their own interest in banding together and opening an antitrust investigation of Google at the time.

In its previous tangle with antitrust regulators, FTC officials sought to determine if Google’s search algorithm — and its practices of devoting better screen real-estate to its services over rivals — threatened competitors. It also investigated Google’s advertising practices, as well as the means by which the company licensed some of the critical patents involving mobile phones to rivals.

But the FTC opted in 2013 against forcing Google to alter broad swaths of its business, including the way it displays search results. The agency also decided not to pursue breaking Google apart. The decision by the agency, at the time under President Barack Obama, drew the ire of some critics who felt it should have challenged Google similarly to when Microsoft was sued by the government in the 1990s in one of the last major antitrust cases. The government at the time alleged that Microsoft broke federal antitrust law to protect its dominant operating system, Windows, and crush competitors.

In contrast, Google has face more significant antitrust scrutiny abroad. The European Union has been a leading force in actions against the tech giant, and regulators there have handed down roughly $9 billion (roughly Rs. 62,621 crores) in fines against the company over the last three years. Those rulings include findings of violations of competition rules in the way it presents search results. It’s also faulted the company for the means by which it licenses its Android smartphone operating system to device-makers. EU officials also have threatened additional investigations and potential penalties spurred on by allegations from some of Google’s competitors, such as the reviews-site Yelp.

At the DOJ, a full-fledged antitrust probe of Google could present another major test for an agency that has most recently been active in scrutinizing the tech and telecom industries. Last year, the DOJ unsuccessfully challenged AT&T’s bid to buy Time Warner, and in recent weeks, antitrust lawyers there have raised concerns regarding the proposed merger of Sprint and T-Mobile.

Now on his second tour of duty at the agency, Delrahim previously represented a bevy of corporate clients including Google during its successful bid to buy the ad giant DoubleClick in 2007.