Google faces its third antitrust lawsuit

Описание: CNBC's Deirdre Bosa reports Google is facing its third antitrust lawsuit from 38 states. Subscribe to CNBC PRO for access to investor and analyst insights on Google and more: https://cnb.cx/3dIH56N

Google now faces its third government antitrust lawsuit in less than two months, this time from a bipartisan coalition of state attorneys general.

A group of 38 states and territories took part in the lawsuit, which claims Google illegally maintained a monopoly in general search and search advertising through anticompetitive conduct and contracts. Members of the executive committee leading the states include Arizona, Colorado, Iowa, Nebraska, New York, North Carolina, Tennessee and Utah.

Shares of Google parent company Alphabet were down less than 1% Thursday afternoon after the announcement.

Colorado Attorney General Phil Weiser said at a press conference Thursday the group would file a motion to consolidate the case with the Justice Department’s recent lawsuit against Google.

Similar to the Justice Department’s lawsuit, filed with 11 Republican state AGs in October, the new complaint tackles Google’s alleged monopoly in online search. But the new suit focuses on some additional mechanisms that the AGs claim Google used to illegally maintain its monopoly power.

The DOJ lawsuit alleges Google used exclusionary contracts to prevent competitors from gaining access to key distribution channels and ensure its continued monopoly in online search.

Weiser said at the press conference the new suit goes beyond the DOJ’s. The lawsuit lays out three ways Google allegedly entrenched its monopoly power:

First, by engaging in “artificially-restrictive contracts” to give it “de facto exclusivity” in most distribution channels for search. This is the part of the lawsuit that most clearly mirrors the DOJ’s.
Second, by denying advertisers the ability to interoperate between its own ad tools and competitors’ for general search ads, disadvantaging the advertisers.
Third, by using “discriminatory conduct on its search results page” to limit the ability of vertical search providers, such as Yelp and Tripadvisor, to reach consumers.
Weiser said the new state lawsuit looks at how Google allegedly used exclusionary contracts to tie up emerging distribution channels such as smart speakers, in addition to the more longstanding ones, that consumers increasingly use to access search engines.

In the part of the complaint that most closely follows the DOJ case, the states allege that Google’s contracts with device makers and distributors to be the default search provider have helped solidify its monopoly. Google’s contracts have secured its search engine default placement on 80% of web browsers, according to the complaint, which says that has contributed to “artificial barriers” preventing competitors from reaching consumers. Google has a longstanding agreement with Apple, for example, to be the default search provider on its products.

Google also offers revenue share agreements with other mobile manufacturers as well as carriers such as AT&T, Verizon and T-Mobile, the complaint says. In exchange, it alleges, those partners must agree to preload Google’s mobile apps and make them the default search engine on the devices. Those agreements often prevent partners from pre-installing other general search engines or browsers such as Microsoft’s Bing or DuckDuckGo, according to the complaint.

Like the DOJ’s lawsuit against Google, the new state-led suit compares the company to Microsoft at the time of its landmark antitrust fight.

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