The lawsuit alleges Google had used unlawful agreements with distributors to ensure its search engine was the default for consumers © REUTERS

The US Department of Justice has accused Google of suppressing competition in internet search in a lawsuit that marks the beginning of a landmark antitrust case against one of the world’s largest technology groups.

The justice department called Google “a monopoly gatekeeper for the internet” and alleged that the company, owned by Alphabet, had used a “web of exclusionary” deals to stymie competitors in the search business.

“If we let Google continue its anti-competitive ways, we will lose the next wave of innovators and Americans may never get to benefit from the ‘next Google’,” said William Barr, the US attorney-general. “The time has come to restore competition to this vital industry.”

The action, filed in federal court in Washington just two weeks before the presidential election, comes as bipartisan scepticism of large technology companies has taken hold in the US capital.

It is the most high-profile antitrust action taken by the US government since its battle with Microsoft in the 1990s.

Kent Walker, Google’s chief legal officer, called the case “deeply flawed”.

“People use Google because they choose to — not because they’re forced to or because they can’t find alternatives,” he said in a blog post. The lawsuit would “artificially prop up lower-quality search alternatives, raise phone prices, and make it harder for people to get the search services they want to use.”

Though the government has not specified what remedies it would seek, the justice department signalled that a break-up of the company had not been ruled out.

“Nothing’s off the table,” said Ryan Shores, a justice department official. The lawsuit requests “structural relief as needed” — a reference to a possible break-up of the company.

In a complaint that echoes the European Union’s 2016 case against Google over Android, its mobile operating system, the US government claimed the search company used its contracts with device makers to block other search engines, while also paying to put its search service in front of users on many of the most widely used smartphones and browsers.

Some 60 per cent of all search queries in the US are drawn to Google thanks to this web of arrangements, according to the lawsuit. When combined with Google’s own distribution channels, such as its Chrome browser, this number rises to 80 per cent, the lawsuit alleged.

The contract terms at the centre of the case include alleged provisions that prevent device makers which use Android from supporting rival versions of the open source operating system on any other devices they make.

The DoJ also objected to Google requiring its search service be given a prominent position on all handsets that include its Play app store and other services.

The case takes aim at payments worth billions of dollars a year — usually in the form of sharing revenue from mobile search advertising — that Google pays to handset makers, mobile phone companies and browser makers to give its search service prominence.

These include payments that have been estimated at $8bn-$12bn a year to Apple, accounting for as much as a fifth of the iPhone maker’s net profits, according to the lawsuit.

The lawsuit alleged these deals created “continuous and self-reinforcing monopolies in multiple markets” and denied competitors to Google’s search engine “vital distribution, scale, and product recognition”.

The case quotes one Google executive allegedly saying the company was “paying revenue share *in return for* exclusivity,” and added that the agreements were “really important” because “otherwise Bing or Yahoo can come and steal away our Android search distribution at any time”.

The lawsuit’s focus on agreements with distributors has parallels with the justice department’s lawsuit against Microsoft in the 1990s, a similarity that the government acknowledged.

“Back then, Google claimed Microsoft’s practices were anti-competitive, and yet, now, Google deploys the same playbook to sustain its own monopolies,” the lawsuit alleged.

“It is Microsoft 2.0,” said Sally Hubbard, director of enforcement strategy at the Open Markets Institute, a progressive think-tank that has pushed for action against Google.

The government will face a well-funded and aggressive defence from Google.

One of the biggest challenges it will face is proving that Google’s alleged practices have harmed its consumers given that its search engine is free to use. Price has often been the primary measure of consumer harm in US antitrust cases.

The lawsuit argues Google’s conduct harmed consumers through quality reductions relating to “privacy, data protection, and use of consumer data” as well as “lessening choice” and “impeding innovation”.

The lawsuit is part of a broader push from politicians in Washington against the power of large technology companies.

Josh Hawley, the Republican senator from Missouri who has been a critic of big technology companies, on Tuesday hailed the case against Google as the “most important antitrust case in a generation”.

Earlier this month, the House of Representatives antitrust subcommittee issued a 449-page report into anti-competitive practices by Google, Facebook, Amazon and Apple.

The Federal Trade Commission is pursuing a separate case against Facebook.

The justice department was joined in the lawsuit by 11 Republican state attorneys-general.

Letitia James, the Democratic attorney-general for New York, said her office would separately conclude parts of a related Google investigation “in the coming weeks”.

“If we decide to file a complaint, we would file a motion to consolidate our case with the DOJ’s,” she said in a statement joined by a bipartisan group of six other state attorneys-general. “We would then litigate the consolidated case cooperatively, much as we did in the Microsoft case.”

The justice department’s lawsuit comes after an investigation that was launched last year as part of a broader review into possible competition issues with online platforms.

Jeffrey Rosen, the deputy attorney-general, said it was necessary to move quickly because technology markets were fast-moving. “This was a situation where we might have even preferred to be quicker,” he said.

He denied there was any connection to the upcoming election in the timing of the lawsuit.

Swamp notes

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