Google is on the verge of facing an antitrust investigation from the US Department of Justice following reports from anonymous sources reported by The Wall Street Journal, The Washington Post, andThe New York Times.
Alphabet’s subsidiary company, Google, may face a probe on its search and ads business. The Department of Justice will also investigate other businesses under the company’s wide variety of software and services. Moreover, the DOJ is said to have spent the past few weeks preparing for the probe.
“One of the people said the agency was also looking into its search practices. Most of Google’s revenue comes from advertisements tied to its search results,” says The Times.
Google has become one of the most powerful and influential platforms on the Internet — along with companies like Facebook who have exponentially operated without government regulation.
Today, Google, among others, is the most dominant digital advertising platform through its search engines, web browsers, mobile operating systems, email, and other product categories that collect data and serve targeted ads.
Advertisement targeting systems are the secret behind the tech giant’s success over the years. Alphabet racked up $136.8 billion in revenue in 2018, with 85% of it coming from advertising. Google controls more than 70% of the search engine market, according to NetMarketShare.
Google riddled in controversies in recent years regarding repeated Gmail and Chrome privacy violations, extremism, and child exploitation on YouTube, its sketchy pentagon drone work, and its alleged work with the Chinese military.
The Federal Trade Commission, working alongside the DOJ to set forth the federal antitrust cases, is reported to be involved in the imminent investigation against Google.
In recent years, the FTC has constantly come after tech companies like Tesla CEO Elon Musk, Facebook, and Apple. In 2011, the FTC filed against Apple Safari’s tracking cookies relating to privacy concerns. The case was settled a year later following a $22.5 million civil penalty — the largest the FTC earned in court.
Today, the FTC is negotiating a settlement with Facebook that’s expected to be as much as $5 billion for breaching users’ data that was used for political profiling by Cambridge Analytica — a British political consulting firm that had worked for President Trump’s presidential campaign.
The FTC then investigated Google in 2013 for broad antitrust violations and concern that some of Google’s business practices could stifle competition. The search engine giant then said it would change some practices after it agreed to a settlement with the federal office, according to the Wall Street Journal.
The recent cases involving tech companies and US government regulators have only come recently as a means to control how tech companies dominated the economic and social aspects — specifically, a show on the nation’s ability to police tech companies. Meanwhile, the European Commission has been coming after Google for three years now.
In 2010, the company received an antitrust complaint from the European Commission regarding shopping search results and ads which resulted in Google paying a $2.7 billion fine in 2017.
In 2016, the EC complained about practices related to Google’s Android operating system — leading to a $5.1 billion charge in 2018. And in March, the European Union ordered Google to pay around $1.7 billion because of its advertising behavior, CNBC reports.
“The US is far more lenient when it comes to market competition than Europe, which is partly why companies like Google and Facebook have been able to grow to such immense size,” The Verge says.
Now, the Department of Justice is taking notes and will be leading the investigation on Google’s ad system and practices after political pressure from the Trump administration due to the upcoming presidential elections.
Sen. Elizabeth Warren, who announced her 2020 presidential candidacy in December, has pressed for breaking up tech companies like Google. In a widely read post published on Medium in March, Warren said she was interested in appointing regulators who would be interested in undoing what she called “anti-competitive mergers,” including Google’s DoubleClick, Nest, and Waze, CNBC reports.
“Today’s big tech companies have too much power — too much power over our economy, our society [,] and our democracy,” Warren wrote in the blog post. “Current antitrust laws empower federal regulators to break up mergers that reduce competition,” Warren added.
It’s still not clear what the DOJ will be investigating under Google — as both the tech company and the DOJ have to comment on the topic.