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U.S. Justice Department prepares Google antitrust probe: sources

U.S. Justice Department prepares Google antitrust probe: sources

Postby smix » Sat Jun 01, 2019 4:30 am

U.S. Justice Department prepares Google antitrust probe: sources
Reuters

URL: https://www.reuters.com/article/us-goog ... SKCN1T22SU
Category: Politics
Published: May 31, 2019

Description: (Reuters) - The U.S. Justice Department is preparing an investigation of Alphabet Inc’s Google to determine whether the tech giant broke antitrust law in operating its sprawling online businesses, two sources familiar with the matter said. Officials from the Justice Department’s Antitrust Division and Federal Trade Commission, which both enforce antitrust law, met in recent weeks to give Justice jurisdiction over Google, said the sources, who sought anonymity because they were not authorized to speak on the record. The potential investigation represents the latest attack on a tech company by the administration of U.S. President Donald Trump, who has accused social media companies and Google of suppressing conservative voices on their platforms online. One source said the potential investigation, first reported by the Wall Street Journal, focused on accusations that Google gave preference to its own businesses in searches. A spokesman for the Justice Department said he could not confirm or deny that an investigation was being considered. Google declined comment. Early in 2013, the FTC closed a long-running investigation of Google, giving it a slap on the wrist. Under FTC pressure, Google agreed to end the practice of “scraping” reviews and other data from rivals’ websites for its own products, and to let advertisers export data to independently assess campaigns. Google’s search, YouTube, reviews, maps and other businesses, which are largely free to consumers but financed through advertising, have catapulted it from a start-up to one of the world’s richest companies in just two decades. Along the way, it has made enemies in both the tech world, who have complained to law enforcers about its market dominance, and in Washington, where lawmakers have complained about issues from its alleged political bias to its plans for China. TripAdvisor chief executive and co-founder Stephen Kaufer welcomed news that Google could face Justice Department antitrust scrutiny. “TripAdvisor remains concerned about Google’s practices in the United States, the EU and throughout the world,” Kaufer said in a statement. “For the good of consumers and competition on the internet, we welcome any renewed interest by U.S. regulators into Google’s anticompetitive behavior.” Democratic presidential candidate Elizabeth Warren has pushed for action to break up Google, as well as other big tech companies. Senator Kamala Harris, who is also running for president on the Democratic ticket, has agreed. “This is very big news, and overdue,” Sen. Josh Hawley, a Republican Google critic, said on Twitter, regarding the investigation. Google has faced a plethora of overseas probes. Europe’s competition authority, for one, hit Google with a 2.4-billion-euro ($2.7-billion) EU fine two years ago for unfairly promoting its own comparison shopping service. Google has since offered to allow competitors to bid for advertising space at the top of a search page, giving them the chance to compete on equal terms.



Explainer: Why Google has a target on its back in Washington
Reuters

URL: https://www.reuters.com/article/us-goog ... SKCN1T30IO
Category: Politics
Published: June 2, 2019

Description: (Reuters) - The U.S. Justice Department is preparing an investigation of Alphabet Inc’s Google to determine whether the technology company violated laws to ensure fair competition, two sources familiar with the matter said. The potential investigation, first reported on Friday, is the latest challenge for Google which already faces a raft of complaints about its business practices from rivals, as well as Democrats and Republicans. EU regulatory actions have already led to multibillion dollar fines and reforms to Google’s business practices. The U.S. probe would focus on accusations Google gave preference to its own businesses in search results, one source said. Google declined to comment on the possible probe. The latest news underscores a growing U.S. backlash aimed at Silicon Valley companies, and marks one of the biggest steps yet by the Trump administration toward regulating a giant technology firm. The following explains the antitrust concerns about Google from other companies, critics in Washington and the EU, and how a Justice Department probe could impact the sprawling U.S. company.
WHY ARE ANTITRUST REGULATORS INTERESTED IN GOOGLE?
Google’s dominance of the search engine market has transformed it from a start-up into one the world’s most valuable companies. Google controls much of the technology used to buy online ads, and its Android operating system runs most of the world’s smartphones. Digital advertising revenue accounted for about 85% of revenue for Google’s parent Alphabet last year. Some web companies, including Yelp Inc and TripAdvisor Inc, have long complained that Google skews search results and uses its market dominance to unfairly promote its own services over theirs. Google has said it is transparent about how it promotes its own services, and that its focus has been on benefiting consumers. The U.S. Federal Trade Commission, which enforces antitrust laws along with DOJ, previously investigated Google’s business practices. The 2013 settlement with the FTC was widely viewed as a victory for Google because the company was only required to make modest changes to its practices and was allowed to continue to highlight its own services in search results. Under FTC pressure, Google agreed to end the practice of “scraping” reviews and other data from rivals’ websites for its own products, and to let advertisers export data to independently assess campaigns. Europe’s competition authority has taken a tougher stance against Google, handing down three fines totaling more than $9 billion in recent years. In a 2017 deal with the EU, Google agreed to pay $2.7 billion to resolve claims it unfairly steered business toward its shopping platform. In March it was fined $1.7 billion in a case focused on illegal practices in search advertising brokering from 2006 to 2016.
COULD THE DOJ TRY TO BREAK UP GOOGLE?
Yes, in theory, but experts have said such action against a technology firm is unlikely. The Justice Department would have to file a lawsuit and convince judges that Google has undermined competition. It is rare to break up a company but not unheard of, with Standard Oil and AT&T being the two biggest examples. Perhaps the most famous case is the government’s effort to break up Microsoft Corp. The Justice Department won a preliminary victory in 2000 but was reversed on appeal. The case settled with Microsoft intact. Justice Department antitrust probes more often result in an agreement to change certain business practices.
WHY IS GOOGLE UNDER INCREASED SCRUTINY?
Google and Facebook Inc collect personal data on users to target their advertisements. Data privacy has become an increasingly important issue as massive breaches have compromised the personal information of internet and social media users. Congress has long been expected to take up privacy legislation after California passed a strict privacy law that goes into effect on Jan. 1. Some Republican Party lawmakers have also said Google, Facebook and Twitter Inc discriminate against conservative viewpoints and suppress free speech. Representatives of the companies have denied the censorship claims. Soon after news of the possible Google probe, Republican Senator Josh Hawley said on Twitter: “This is very big news, and overdue.” As attorney general of Missouri, Hawley probed Google over allegations it misappropriated content from rivals and claims it demoted competitors’ websites in search results. Beyond Congress, Google’s Washington critics have included the United States’ top general who in March said the Chinese military was benefiting from the work Google was doing in China, where the technology giant has long sought to have a bigger presence. Google, which did not comment at the time, has previously said it has invested in China for years and plans to continue to do so, but that the company also was continuing to work with the U.S. government on projects in healthcare, cybersecurity and other fields.



U.S. probe of Google's online ad dominance would appease long suffering rivals, publishers
Reuters

URL: https://www.reuters.com/article/us-goog ... SKCN1T42PI
Category: Politics
Published: June 3, 2019

Description: SAN FRANCISCO/WASHINGTON (Reuters) - Ad tech firms and publishers have had to stay in the good graces of Google or risk insolvency. That is why the U.S. Department of Justice is examining the dominance of Alphabet Inc’s Google in online advertising as part of a potential antitrust investigation, two sources told Reuters. Google’s control over the market has long hurt the profits of smaller advertising technology companies who must appease the No. 1 online ad firm to be profitable, and online publishers who need Google’s search reach and ad tools to build an audience and make money on their content. The ad market is just one of several areas of possible inquiry. Google has declined to comment on the potential investigation, but has repeatedly said that it acts in the best interest of its users and offers sufficient warning to industry partners potentially affected by its moves. Google is expected to capture 37% of the $129 billion spent on online ads in the United States in 2019, compared to 22% for No. 2 Facebook Inc and 10% for No. 3 Amazon.com Inc, according to ad research firm eMarketer. Digital advertising revenue accounted for about 85% of revenue last year for Google parent Alphabet. The U.S. government is gearing up to investigate the massive market power of Amazon.com Inc, Apple, Facebook and Google, sources told Reuters on Monday, setting up what could be an unprecedented wide-ranging probe of some of the world’s largest companies. Apple and Facebook did not immediately reply to a request for comment on Monday. Google and Amazon declined to comment.
UNFETTERED GROWTH
The U.S. government has done little to slow Google’s ad market dominance despite having several opportunities. In 2007, the FTC approved Google’s $3.1 billion acquisition of software firm DoubleClick, saying it would not substantially lessen competition, and it made the same finding in 2010 for Google’s $750 million purchase of AdMob. Those deals have helped make Google’s tools dominant in how businesses buy and sell ads on the internet. The Google Marketing Platform is the main way big advertisers buy ads, while Google Ad Manager is the most widely used service among publishers selling ad space on their websites or apps. The company also owns the Chrome web browser and the Android mobile platform, which are two of the largest gateways to the internet. And its search and YouTube properties are two of the largest ad-supported applications. Smaller ad technology vendors and website owners have said that Google’s power enables it to dictate industry policies and practices in ways that squeeze out their companies and favor its own. “I’m worried that (Google is) moving toward a position of dominance across all of digital advertising, from control of the user to the control of display of an ad,” said Andrew Buckman, chief operating officer of British advertising firm Sublime. “It’s good Justice is looking at that.” In a heated situation last year, Google required websites using its technology to adhere to a new European privacy law in a way that major news websites said was too strict of an interpretation of the rules and would cost them revenue. Some of those critics, including German digital publishing house Axel Springer, declined to comment on the U.S. investigation but media industry associations said they were pleased to see the action. At a Justice Department workshop last month on competition in advertising, Breitbart News Network Chief Executive Larry Solov said a Justice Department antitrust action against Google was the best way to address concerns without “heavy regulation.” “No one advertising and tech company, especially one with a proven viewpoint bias, should have control over picking winners and losers in publishing,” Solov said of Google. This year, Google announced changes to Chrome affecting how ad software vendors track users online that could curtail the industry’s data collection and revenue. The plan and a similar move related to the look and feel of ads last year have attracted concern from smaller rivals including Sublime and Rumble, which did not respond to a request to comment. Brian O’Kelley, the former chief executive of ad tech firm AppNexus, told Reuters on Sunday that he was forced to sell his company to AT&T Inc last year because of Google’s stranglehold on the market. AppNexus was valued at $1.6 billion in the purchase, the Wall Street Journal reported at the time. Among O’Kelley’s issues was that in 2015, Google began requiring advertisers to purchase YouTube ads thru its own ad-buying platforms, effectively preventing companies such as AppNexus from getting involved in the transaction. And because Google owned the dominant search and video sites, it became difficult to compete, O’Kelley said. “Google’s monopoly forced me to sell my business,” he said. O’Kelley said investigators will face a difficult task in reconciling antitrust and privacy issues. Restricting data collection tends to benefit companies with user relationships, such as Google and Facebook, as opposed to behind-the-scenes software vendors. “Privacy law is good for the monopolist,” O’Kelley said.
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DOJ takes step toward a bruising antitrust battle with Google

Postby smix » Sat Jun 01, 2019 9:46 am

DOJ takes step toward a bruising antitrust battle with Google
Politico

URL: https://www.politico.com/story/2019/05/ ... nt-1349436
Category: Politics
Published: June 1, 2019

Description: A potential investigation of the search and advertising giant comes after years of rising political heat on Silicon Valley. But an antitrust case would pose huge hurdles for the government.
The Justice Department has taken the initial steps toward an antitrust investigation of Google, a clear signal that two years of a bipartisan anti-Silicon Valley backlash in Washington may be yielding concrete action. But such a case, if it comes to pass, would represent a major challenge for the federal government's antitrust enforcers, whose last victory against a massive corporate giant was the breakup of AT&T's former telephone monopoly in 1984. President Donald Trump's DOJ failed in its first big antitrust test in February, when courts rejected its attempt to block to the merger of AT&T and Time Warner. Even so, DOJ officials have begun laying the groundwork for an antitrust probe of Google's search practices, having wrested jurisdiction over the issue away from the Federal Trade Commission, two people close to the situation confirmed to POLITICO late Friday. The Wall Street Journal first reported the development. The department’s move intensifies the already considerable political pressure on Google at a time when lawmakers, regulators and government leaders in Washington, Brussels and beyond are turning a critical eye on the once-favored U.S. tech industry over everything from its mishandling of user data to its role in the subversion of democratic elections. And the action quickly got bipartisan cover with a statement of praise from Sen. Elizabeth Warren (D-Mass.), a presidential candidate who called earlier this year for breaking up Google, Facebook and Amazon. "I've been talking for years about how Google is locking out competition," Warren said Friday night, adding that it and its fellow online giants "have too much power and they're using that power to hurt small businesses, stifle innovation, and tilt the playing field against everyone else. It's time to fight back." Google dominates the markets for online advertising and search, and has major footholds in email, streaming media, photos, e-books, television, car navigation and even its own branded smartphones. Its parent company, Alphabet, has also ventured into fields like drones and self-driving cars .A move against Google would be in keeping with the agenda of DOJ antitrust chief Makan Delrahim, a Trump nominee who has been talking up the idea of subjecting internet firms to closer examination. In a speech last year, he said that "if there is clear evidence of harm to competition in digital platforms, enforcers must take vigorous action and seek remedies that protect American consumers." Representatives for the DOJ, the FTC and Google declined to comment. The decision to hand a possible antitrust probe to the Justice Department instead of the FTC is bad news for Google, which survived a previous FTC inquiry that ended in 2013 with no serious repercussions for the company. But it’s far from clear that even the DOJ has the antitrust tools to rein in a sprawling internet giant like Google, after decades of an increasingly pro-business atmosphere in Washington that has heightened the difficulties of winning big antitrust cases. Trump’s Justice Department suffered a major loss in its first attempt at aggressive antitrust action, when it tried to argue that AT&T's acquisition of Time Warner would cause higher prices and reduced choice for media consumers. And legal experts have cautioned that today’s online behemoths pose even bigger challenges for antitrust enforcers than age-old corporate giants such as Standard Oil. For one thing, courts have become more conservative since the 1970s when it comes to antitrust doctrine, requiring the government to prove that anti-competitive behavior has a real economic impact on businesses or consumers. DOJ failed to meet that standard in the 1990s when it tried to separate Microsoft’s operating system and browser products, a case that Microsoft won on appeal. And even successful antitrust cases can be lengthy and expensive. It took a decade for the Justice Department to break up AT&T’s old Bell System in 1984, and another decade for the government to wage its unsuccessful fight against Microsoft. The Bell telephone case began under President Gerald Ford and ended when Ronald Reagan was in the White House — and similarly, any attempt to break up Google could last years beyond Trump’s presidency. Still, Trump, who frequently alleges that Google is biased against conservatives, has shown interest in subjecting internet giants to government scrutiny, saying in August that Google, Amazon and Facebook could be in a "very antitrust situation." He added of Google: "I tell you, there are some moments where we say, 'Wow, that really is bad, what they're doing.'" Google came under further attack in Washington this year when Gen. Joseph Dunford, chairman of the Joints Chiefs of Staff, publicly criticized the company for pursuing research projects in China while withdrawing from work with the Defense Department. Google decided not to renew an artificial intelligence contract with the military after an internal backlash from employees upset that the technology could be used for warfare. Amid the increasing heat on Google, the company's CEO, Sundar Pichai, met with Trump at the White House in March, with Trump later tweeting that Pichai "discussed political fairness and various things that @Google can do for our Country." He added: "Meeting ended very well!" A full-blown antitrust investigation of Google would bring the U.S. more in line with the European Union, where antitrust enforcers have punished the search giant over how it does business. In March, EU competition chief Margrethe Vestager levied a $1.7 billion fine against Google over its online advertising practices, bringing the total penalties against the company in the European Union to nearly $10 billion.
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