Washington (Bloomberg): The looming US antitrust investigation of Google is galvanizing as many as a dozen companies to gather their longstanding complaints about the Alphabet Inc. unit and consider bringing them to the US Justice Department as the probe gets underway.
Rivals and companies that depend on Google have long complained that the internet giant harms competition across markets. These companies, ranging from media to advertising technology firms, are now assembling evidence and ready to assist the Justice Department, one person with knowledge of the matter said.
“Everybody is going to be knocking on the door,” said Barry Lynn, executive director of Open Markets Institute, which advocates for aggressive antitrust enforcement. “Everyone is going to be jostling for time with these folks.”
The US government is taking the extraordinary step of opening some of the nation’s most valuable companies to antitrust scrutiny after years of a hands-off approach. The shift comes with the decision by top antitrust enforcers to divide up scrutiny of some of Silicon Valley’s best-known names, sending shares of the companies tumbling on Monday.
The Justice Department is set to open an investigation of Google, while the Federal Trade Commission is taking responsibility for probes of Facebook Inc. and Amazon.com Inc., according to people familiar with the matter. The Justice Department will also oversee scrutiny of Apple Inc..
The House Judiciary Committee opened a separate bipartisan inquiry, with a focus on whether tech platforms are using their market power to harm competition. The US government’s parceling out of antitrust oversight puts fresh eyes on Google’s conduct after the FTC closed a 2013 investigation into the company’s practices without taking any action.
That deal was struck between Makan Delrahim, the head of Justice’s antitrust division, and Joe Simons, the FTC chairman. Because both agencies enforce US antitrust laws, they often agree to such divisions of labor to avoid overlap.
Shares of technology companies fell on the news of the broad agreement between the agencies. Facebook slid 7.5 per cent to $164.15 Monday, the most since July 2018, after falling as much as 9.3%. Alphabet dropped 6.1 per cent to $1,038.74. Amazon fell 4.6% to $1,692.69, while Apple shares fell 1 per cent to $173.30.
Digital Ad Market
Google’s influence over the digital advertising market and its role as an intermediary between advertisers and publishers is a top complaint of media companies. Oracle Corp. is open to meeting with the Justice Department’s antitrust officials, according to a source. News Corp. said in a filing to Australian competition officials earlier this year that Google uses its market power in the digital advertising technology to benefit its own businesses and harm competition.
David Chavern, president and chief executive officer of the News Media Alliance, whose membership includes News Corp., the New York Times and the Washington Post, said his group hasn’t reached out to the Justice Department, but is willing to talk to officials there. “Publishers would be among the range of folks who are worried about Google’s dominance in the digital ad market,” said Chavern.
Google has a large or majority market share in several important industries including online advertising, internet browsers, mobile operating systems and email. The company argues the global nature of the internet means it doesn’t actually have the power that its critics say it does.
One area where US investigators will likely look closely is Google’s role in the online advertising ecosystem. Google sells much of the online real estate available to advertisers, such as search ads and spots that play before YouTube videos. It also controls the system that many advertisers use to place and track ads on non-Google websites through its DoubleClick unit.
The European Union has levied billions of dollars in fines against Google over antitrust violations related to shopping searches, Android and advertising.
Google, with a sprawling empire of businesses that could feasibly be targets, faces what could be a widespread and years-long investigation. The company is in the dark about the focus of the inquiry and hopes to learn more this week.
Google has a large or majority market share in several important industries including online advertising, internet browsers, mobile operating systems and email. The company argues the global nature of the internet means it doesn’t actually have the power that its critics say it does.
One area where US investigators will likely look closely is Google’s role in the online advertising ecosystem. Google sells much of the online real estate available to advertisers, such as search ads and spots that play before YouTube videos. It also controls the system that many advertisers use to place and track ads on non-Google websites through its DoubleClick unit.
The European Union has levied billions of dollars in fines against Google over antitrust violations related to shopping searches, Android and advertising.
