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The Justice Department accused Google of maintaining an illegal monopoly over search and search advertising, in the government’s most significant legal challenge to a tech company’s market power in a generation.
In a lawsuit, filed in a federal court in Washington, D.C. on Tuesday, the agency accused Google, a unit of Alphabet, of using several exclusive business contracts and agreements to lock out competition.
Such contracts include Google’s payment of billions of dollars to Apple to place the Google search engine as the default for iPhones. By using contracts to maintain its monopoly, the suit says, competition and innovation has suffered.
Attorney General William P. Barr, who was appointed by Mr. Trump, has played an unusually active role in the investigation. He pushed career Justice Department attorneys to bring the case by the end of September, prompting pushback from lawyers who wanted more time and complained of political influence. Mr. Barr has spoken publicly about the inquiry for months and set tight deadlines for the prosecutors leading the effort.
The lawsuit may stretch on for years and could set off a cascade of other antitrust lawsuits from state attorneys general. About four dozen states and jurisdictions have conducted parallel investigations and are expected to bring separate complaints against the company’s grip on technology for online advertising.
A victory for the government could remake one of America’s most recognizable companies and the internet economy that it has helped define since it was founded by two Stanford University graduate students in 1998.
But Google has long denied accusations of antitrust violations and is expected to fight the government’s efforts by using a global network of lawyers, economists and lobbyists. Alphabet, valued at $1.04 trillion and with cash reserves of $120 billion, has fought similar antitrust lawsuits in Europe.
The United States on Tuesday accused Google, a unit of Alphabet, of illegally maintaining a monopoly over search through several exclusive business contracts and agreements that lock out competition.
At a press briefing Tuesday morning, Deputy U.S. Attorney General Jeffrey A. Rosen outlined the rationale behind the case.
Mr. Rosen hailed the Google lawsuit as a “milestone” in the Justice Department’s efforts to foster competition in the internet markets, but he emphasized that this was not a stopping point — suggesting that the D.O.J. may continue to pursue other monopoly cases of technology companies.
Mr. Rosen said that Google “has maintained its monopoly power through exclusionary practices that are harmful to competition.”
“Google is the gateway to the internet and a search advertising behemoth,” he said.
Mr. Rosen said the Google lawsuit had “nothing to do” with complaints from President Trump and other Republicans that technology companies exercise political bias in policing speech on their platforms, calling it a separate worry from these “competitive concerns in the marketplace.”
The Justice Department lawyers were guarded about many aspects of the investigation, including their conversations with the company and whether they considered building out the case into other parts of Google’s business or their conversations with the company. They specifically avoided answering a question about whether the D.O.J. spoke to Larry Page, Google’s co-founder and former chief executive of its parent company, Alphabet.
The lawyers stopped short of calling for specific relief, such as pulling apart pieces of Google’s conglomerate of business lines. Remedies such as divestitures are typically reached further along in a case, experts say.
The Department of Justice sued Google on Tuesday, accusing the tech giant of maintaining an illegal monopoly over search and search advertising. The lawsuit, filed in a federal court in Washington, D.C., on Tuesday, is the government’s most significant legal challenge to a tech company’s market power in a generation.
Here’s how business leaders, policymakers, academics and antitrust experts are reacting to the news.
Google called the lawsuit “deeply flawed” in a tweet Tuesday morning. “People use Google because they choose to — not because they’re forced to or because they can’t find alternatives,” the company wrote.
Today’s lawsuit by the Department of Justice is deeply flawed. People use Google because they choose to — not because they’re forced to or because they can’t find alternatives. We will have a full statement this morning.
— Google Public Policy (@googlepubpolicy) October 20, 2020
Senator Josh Hawley, Republican of Missouri, who launched an antitrust investigation of Google when he was Missouri’s attorney general, also responded to the suit. “I applaud this suit as desperately needed and long overdue,” he wrote on Twitter. “#BigTech’s free pass is over.”
This will be the most important antitrust suit in a generation. As the first state attorney general in the country to launch an antitrust investigation of @Google, I applaud this suit as desperately needed and long overdue. #BigTech’s free pass is over https://t.co/ivniS8xHFg
— Josh Hawley (@HawleyMO) October 20, 2020
David Cicilline, a Democratic congressman and the chairman of the House Judiciary antitrust subcommittee, tweeted that he released a report three weeks ago detailing steps Google had taken to maintain and expand its monopoly power. “This step is long overdue,” he wrote, referring to the lawsuit. “It is time to restore competition online.”
Three weeks ago, I released a report outlining steps Google took to maintain and expand its monopoly power through anti-competitive actions.
Today, DOJ finally brought an antitrust lawsuit against Google. This step is long overdue. It is time to restore competition online.
— David Cicilline (@davidcicilline) October 20, 2020
Senator Tom Cotton, Republican of Arkansas, tweeted that Google’s “anticompetitive conduct is harming the public and American business,” and praised the Justice Department for “finally holding Google accountable.”
Google’s anticompetitive conduct is harming the public and American business. I commend the Department for finally holding Google accountable.
When it comes to big tech, this is just the beginning. Winter is coming.https://t.co/b8Nl5nnehc
— Tom Cotton (@SenTomCotton) October 20, 2020
Tim Wu, a professor at Columbia Law School who specializes in antitrust issues, pointed out in a Twitter post that the Justice Department’s case against Google is similar to its case against Microsoft. “The Justice Department is showing that it isn’t just Silicon Valley who clones successful products: they’ve basically cloned the Microsoft case and added Google’s name to it,” he wrote.
The Justice Department is showing that it isn’t just Silicon Valley who clones successful products: they’ve basically cloned the Microsoft case and added Google’s name to it
— Tim Wu (@superwuster) October 20, 2020
Luther Lowe, senior vice president of public policy at Yelp, tweeted that some might characterize the lawsuit as a “partisan vendetta by the Trump Administration.”“That is the false narrative Google wants you to hear,” he wrote, adding that the House antitrust subcommittee report was signed by all Democrats.
Some might try to characterize today’s filing as a partisan vendetta by the Trump Administration. That is the false narrative Google wants you to hear. The House Antitrust Subcommittee report was signed by all Ds and there are 2 bipartisan state AG groups doing their own G cases. https://t.co/7dTZ5QhQn8
— Luther Lowe (@lutherlowe) October 20, 2020
Avery Gardiner, a consumer advocate and the general counsel and senior fellow for competition, data and power at the Center for Democracy and Technology, a nonprofit organization focused on influencing technology policy, wrote on Twitter that the Department of Justice’s statistics show that it “didn’t bring even a single case for alleged abuse of monopoly power” from 2010 to 2020, except for in 2011 when there was one case.
As you gear up for the #antitrust complaint DOJ is said to be bringing against Google today, recall DOJ’s own statistics show that it didn’t bring even a single case for alleged abuse of #monopoly power in 2019, 2018, 2017, 2016, 2015, 2014, 2013, 2012, or 2010. 2011 had one. pic.twitter.com/6zupbmciJk
— Avery Gardiner (@AveryWGardiner) October 20, 2020
The Justice Department’s antitrust lawsuit against Google comes two weeks after Democratic lawmakers on the House Judiciary Committee released a sprawling report on the tech giants that accused Google of having a monopoly over online search and the ads that come up when users enter a query.
“A significant number of entities — spanning major public corporations, small businesses and entrepreneurs — depend on Google for traffic, and no alternate search engine serves as a substitute,” the report said.
The lawmakers also accused Apple, Amazon and Facebook of abusing their market power. The scrutiny reflects how Google has become a dominant player in communications, commerce and media over the last two decades. It controls 90 percent of the market for online searches, according to one estimate. That business is lucrative: Last year, Google brought in $34.3 billion in search revenue in the United States, according to the research firm eMarketer. That figure is expected to grow to $42.5 billion by 2022, the firm said.
In the 449-page report, lawmakers said the four companies had turned from “scrappy” start-ups into “the kinds of monopolies we last saw in the era of oil barons and railroad tycoons.”
To mend the inequities, the lawmakers recommended restoring competition by effectively breaking up the companies, emboldening the agencies that police market concentration and throwing up hurdles for the companies to acquire start-ups. They also proposed reforming antitrust laws, in the biggest potential shift since the Hart-Scott-Rodino Antitrust Improvements Act of 1976 created stronger reviews of big mergers.
The Justice Department on Tuesday filed an antitrust lawsuit against Google, accusing the company of maintaining an illegal monopoly over search and search advertising.
The government was joined by 11 states, all with Republican attorneys general: Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas.
Speaker Nancy Pelosi of California set a Tuesday deadline for a compromise stimulus deal that could be considered before the election.
She instructed key Democratic lawmakers on Monday to work with top Republicans to try to resolve critical differences holding up a broad agreement with the Trump administration.
The directive came after she and Steven Mnuchin, the Treasury secretary, held their latest talks, speaking for nearly an hour by phone. The two “continued to narrow their differences,” said Drew Hammill, a spokesman for Ms. Pelosi. He added that “the speaker continues to hope that, by the end of the day Tuesday, we will have clarity on whether we will be able to pass a bill before the election.”
The odds of a last-minute deal remain long, with Democrats and the Trump administration still haggling over funding levels and policy issues. Even if they could agree, Senate Republicans have all but ruled out embracing a plan anywhere near as large as the more than $2 trillion package under discussion.
If such a deal were struck, Senator Mitch McConnell, Republican of Kentucky and the majority leader, said the chamber would consider it, but he also made a point of scheduling two separate votes in the coming days on narrower bills of the kind senators in his party are more willing to accept. One would revive a lapsed federal loan program for small businesses and the other would provide $500 billion for schools, testing and expired unemployment benefits.
President Trump has insisted in recent days that he wants to spend more than the $2.4 trillion Ms. Pelosi has put forward in negotiations, and claimed he could easily cajole enough Senate Republicans into supporting an agreement of that size — a notion that many of them have told his top deputies would never happen.
In a private call with Democrats on Monday, Ms. Pelosi outlined a number of remaining areas of disagreement, including Democratic demands for hundreds of billions of dollars in funding for state and local governments, support for restaurants devastated by the pandemic and additional health provisions, according to a person on the call, who disclosed the details on condition of anonymity. Democrats also remain wary that the administration would spend the funds as Congress intended.
Still, Ms. Pelosi insisted she was optimistic a bargain could be reached and said she was intent on reaching one before a new Democratic administration began in January.
“I don’t want to carry over the droppings of this grotesque elephant into the next presidency,” Ms. Pelosi told her members. “We’ve got to get something big, and we’ve got to get it done soon and we’ve got to get it done right.”
U.S. stocks rose on Tuesday, the day Speaker Nancy Pelosi has set as a deadline for reaching an agreement with Republicans on an economic stimulus package. The S&P 500 was up nearly half a percent in early trading.
Stock indexes in Europe and Asia were mixed. The Stoxx Europe 600 index wavered between gains and losses. Japan’s Nikkei 225 index closed 0.4 percent lower. Hong Kong’s Hang Seng index ended the day 0.1 percent higher.
Oil prices were little changed, with futures in West Texas Intermediate falling 0.2 percent and Brent crude staying flat, as analysts speculated about whether OPEC would restart production it cut earlier in the year in response to weaker demand.
Even with Ms. Pelosi’s instructions to work toward a deal, the odds of a last-minute agreement between Democrats and the Trump administration remain long. If differences over funding levels and policy issues could be resolved, there are still Senate Republicans to contend with, who are unlikely to approve a spending package as large as the one under discussion. On Monday, the S&P 500 index dropped 1.6 percent.
Some European stock indexes were pushed higher on Tuesday by a spate of positive earnings, which helped quell anxiety in markets about rising coronavirus cases and new social restrictions, including national lockdowns in Ireland and Wales. Reckitt Benckiser, the British owner of cleaning brands such as Dettol and Lysol, reported a jump in revenue on Tuesday. Logitech, which makes other computer hardware such as keyboards, said its quarterly sales exceeded $1 billion for the first time in the three months that ended in September. Logitech’s share price jumped more than 20 percent in European markets.
Shares in the Swiss bank UBS rose 2.5 percent after the firm said its profit nearly doubled in the third quarter compared to a year ago, because of an increase in trading revenues and growth in its wealth management business. The gains follow a similar pattern on Wall Street, where banks saw increases in trading offsetting a slump in their consumer businesses. UBS said it would give “less senior” employees a one-off bonus equal to one week’s pay, which it expects to cost about $30 million.
While Britain struggles to get its national test-and-trace system running more efficiently, travelers will be able to get rapid coronavirus tests at an airport for the first time. Fliers leaving Heathrow Airport in London can get a rapid test for 80 pounds ($104). Starting Tuesday, people going to Hong Kong can take a pre-departure test to meet entry requirements there, the airport said.
The service will initially be offered for four weeks and passengers must book it ahead of time. The tests will be done by private-sector nurses, with results expected within an hour.
Heathrow, Britain’s largest airport, has been urging the government to allow it to offer more testing, particularly to arrivals, in an effort to boost travel. Heathrow argues that on-site testing would limit the need for two-week quarantines for people arriving in Britain. Government ministers have disagreed.
As an international hub, Heathrow Airport typically sees more than 80 million passengers a year. But during the pandemic, governments have introduced a range of travel restrictions, and passengers have been wary of venturing too far from home, causing overseas travel to plummet. The airport said 1.2 million passengers traveled through it in September, down 82 percent compared with 2019.
Heathrow hopes its new program could be the start of a more expansive testing regime in the airport. For now, the airport will offer a test known as LAMP, which is not as sensitive as PCR testing, used by the country’s national health service. PCR tests can detect active infections even before symptoms appear, though with a daylong turnaround. Heathrow plans to add antigen tests, another type of rapid testing, later.
The airport also said that travelers to Italy would be able to use the test, but Collinson, one of the companies administering the plan, said it was still in talks with the Italian government, the BBC reported.
The German auto industry is bouncing back strongly from the pandemic as customers make purchases they postponed earlier in the year, earnings reports by BMW and Daimler indicate. Strong economic growth in China, a crucial market for both vehicle makers, has also helped.
But analysts say the miniboom may not last. Infections in Europe and the United States are surging, endangering sales in those two essential car markets. The profit figures “look too good to be sustainable,” Tim Rokossa, an analyst at Deutsche Bank, said in a note, referring to Daimler.
BMW said late Monday that its free cash flow, a measure of profit, quadrupled to 3 billion euros, or $3.6 billion, in the third quarter compared to the same period last year. Daimler said last week that operating profit rose to €3 billion in the quarter from €2.7 billion a year earlier.
Neither company disclosed net profit in the preliminary earnings reports. Daimler will issue a detailed earnings report on Friday and BMW will do so on Nov. 4.
German carmakers have a strong influence on the economic fate of Europe. Cars and trucks are Germany’s biggest export, and German carmakers buy components from all over the continent.
WASHINGTON — Berkshire Hathaway, the conglomerate owned by Warren Buffett, will pay $4.1 million to the Treasury Department to settle allegations that the company and one of its Turkish subsidiaries violated American sanctions against Iran, department officials said Tuesday in a statement.
Treasury officials said that Berkshire Hathaway’s Turkish subsidiary Iscar Kesici Takim Ticareti ve Imalati Limited Sirket, known as Iscar Turkey, allegedly sold 144 shipments of goods — including cutting tools and disposable inserts — from December 2012 to January 2016 to two intermediary companies knowing they would be resold in Iran.
The transactions, valued at $383,443, violated U.S. sanctions that prohibit American companies from doing business with Tehran. Treasury officials said that Iscar Turkey violated Berkshire’s compliance policies and also “took steps to obfuscate its dealings with Iran, including concealing these activities from Berkshire.”
Iscar Turkey is a unit of IMC International Metalworking Cos., which is based in Israel. In 2006, Berkshire Hathaway bought 80 percent of IMC for $4 billion. In 2013, it bought the remaining 20 percent for $2 billion.
Representatives from Berkshire Hathaway did not immediately respond to a request for comment.
The settlement comes as part of the Trump administration’s effort to exert pressure on Iran, including reimposing sanctions and enforcing penalties on companies that do business with Tehran.
Earlier this month, the Treasury Department imposed sanctions on 18 Iranian banks, effectively locking Iran out of the global financial system and further cratering its already collapsing economy.
The Trump administration last month also unilaterally restored international economic penalties on Tehran that much of the rest of the world has refused to enforce. It also said it was reimposing United Nations sanctions against Iran over the fierce objection of American allies, in part to keep a global arms embargo in place beyond its expiration date of Oct. 18.