The U.S. Justice Department and 11 states filed an antitrust lawsuit against Alphabet Inc’s Google on Tuesday for allegedly breaking the law in using its market power to fend off rivals.
Google, whose search engine is so ubiquitous that its name has become a verb, had revenue of $162 billion in 2019, more than the nation of Hungary.
Republican Senator Josh Hawley, a vociferous Google critic, accused the company of keeping power through “illegal means” and called the lawsuit “the most important antitrust case in a generation.”
The lawsuit promises to be the biggest antitrust case in a generation, comparable to the lawsuit against Microsoft Corp filed in 1998 and the 1974 case against AT&T which led to the breakup of the Bell System.
The Microsoft lawsuit was credited with clearing the way for the explosive growth of the internet since the antitrust scrutiny prevented the company from attempting to thwart competitors.
Tuesday’s federal lawsuit marks a rare moment of agreement between the Trump administration and progressive Democrats. U.S. Senator Elizabeth Warren tweeted on September 10, using the hash tag #BreakUpBigTech, that she wanted “swift, aggressive action.”
Shares of Alphabet rose nearly 1% after news the government lawsuit was imminent. There was some doubt in the markets that Washington lawmakers will actually come together and take action, according to Robert Pavlik, chief investment strategist, senior portfolio manager at SlateStone Wealth LLC in New York.
“In order for anything to have real bite, you need Congress, and they want to break them up. But given the fact there’s so much animosity, even though they agree something needs to be done with Big Tech, it’s going to take a long time to push through.”
The 11 states which joined the lawsuit all have Republican attorneys general.
More lawsuits could be in the offing since probes by state attorneys general into Google’s broader businesses are under way, as well as an investigation of its broader digital advertising businesses. A group of attorneys general led by Texas is expected to file a separate lawsuit focused on digital advertising as soon as November, while a group led by Colorado is contemplating a more expansive lawsuit against Google.
The lawsuit comes more than a year after the Justice Department and Federal Trade Commission began antitrust investigations into four big tech companies: Amazon.com Inc , Apple Inc, Facebook Inc and Google.
Seven years ago, the FTC settled an antitrust probe into Google over alleged bias in its search function to favor its products, among other issues. The settlement came over the objections of some FTC staff attorneys.
Google has faced similar legal challenges overseas.
The European Union fined Google $1.7 billion in 2019 for stopping websites from using Google’s rivals to find advertisers, $2.6 billion in 2017 for favoring its own shopping business in search, and $4.9 billion in 2018 for blocking rivals on its wireless Android operating system.