Google hit by antitrust lawsuit from nearly 40 states over alleged search monopoly

A bipartisan coalition of 38 states and territories on Thursday filed an antitrust lawsuit against Google , alleging the tech giant holds a monopoly in general search, the heart of its consumer tech business. The complaint is the third antitrust suit filed against the Silicon Valley giant in a matter of weeks, escalating Google's battle with state and federal prosecutors over the company's dominance.

The lawsuit alleges the tech giant harmed competitors with its presentation of search results, favoring its own services over those of rivals. The complaint also claims Google asserted its dominance to become the default search engine in not only web browsers and smartphones, but also newer technologies like smart speakers and connected cars, through the company's voice assistant feature.

"Google, one of the largest companies in the world, has methodically undertaken actions to entrench and reinforce its general search services and search-related advertising monopolies by stifling competition," the complaint reads. "As the gateway to the internet, Google has systematically degraded the ability of other companies to access consumers." 

The investigation was led by Colorado and Nebraska, and the coalition of states includes Arizona, Iowa, New York, North Carolina, Tennessee, and Utah. The group is seeking to consolidate the case with a landmark suit filed by the US Department of Justice in October, potentially adding more weight to an already historic case against the tech giant.

In a blog post responding to Thursday's lawsuit, Google said competition is "just a click away" and claimed redesigning its search results would harm consumers.

"We know that scrutiny of big companies is important and we're prepared to answer questions and work through the issues," the company said. "But this lawsuit seeks to redesign Search in ways that would deprive Americans of helpful information and hurt businesses' ability to connect directly with customers."

When the DOJ filed its case two months ago, Google argued that people use its services because they find them to be helpful, not because they're forced. On Thursday, Nebraska AG Doug Peterson said it's not that simple. "It's not 'People use Google.' It's 'Google uses people,'" he said during a press conference. "Google uses people to take a tremendous amount of personal data," which it uses to fuel its dominance, he said.

Google's iconic search engine is the most-visited website on the internet. The company processes around 90% of all online searches in the US. That stranglehold is the foundation of Google's massive advertising business, which generates almost all of the company's $160 billion in annual sales. Google has been accused of hurting competitors by giving priority in its search results to its own products, like shopping ads or local business listings, over the listings of rivals. Critics also complain the tech giant takes content from publishers and other websites and uses it in prepared answers directly in search results, rather than simply providing a list of links that send users to other sites. 

One area the lawsuit tackles is emerging technology, like Google's Assistant voice service. The complaint claims Google is trying to extend its lead in traditional search to new places, like car dashboards or home living rooms with smart speakers. 

"As Google perceives potential threats to its hegemony, it blunts and burdens those competitive threats," the lawsuit says. "Google recognizes, for example, that voice-based internet searching could easily emerge as the future of search." 

On a conference call with reporters, Google said the claim in inaccurate. The company pointed to Amazon's success in smart speakers, with a 70% share of the market, according to eMarketer. Google's share is just shy of 32%.

Mounting antitrust battles

The lawsuit is the third major antitrust complaint Google has faced in weeks. It comes a day after a separate case was filed by another coalition of states led by Texas AG Ken Paxton. That complaint targets Google's massive online advertising operation, which financially powers the company's empire. The suit accuses the tech giant of harming competitors by engaging in "false, deceptive, or misleading acts" while operating its buy and sell auction system for digital ads.

In its complaint filed in October, the Justice Department claimed the tech giant has maintained monopolies in search and search advertising. The DOJ alleged Google broke antitrust law by cutting deals with phone makers, such as Apple and Samsung, to be the default search engine on their devices, a move that boxed out competitors. The agency also accused Google of taking advantage of the dominance of its Android operating system to pressure device makers into preloading its search app and other services on phones powered by the software.

The increased spotlight on Google comes as tech giants face a reckoning over their scale and influence. Legislators and regulators are concerned about how their power might ultimately harm consumers, especially by choking off competition from smaller players in Silicon Valley. The Federal Trade Commission and 40 state attorneys general last week filed antitrust lawsuits against Facebook, calling for a break up of the company.

In October, the US House Judiciary's antitrust subcommittee released a scathing 449-page report on Google, Facebook, Amazon and Apple , hammering the tech giants on their allegedly anticompetitive practices. The report was the culmination of a more than yearlong investigation led by Rhode Island Democrat David Cicilline. The probe reached a crescendo in July when the CEOs from the four companies appeared at a joint hearing via video chat. 

On Thursday, Cicilline applauded the states' lawsuit. "Today's filing affirms much of the evidence the Antitrust Subcommittee uncovered during our investigation into Google's anticompetitive conduct," he said in a statement. "Like Facebook, Google abused their monopoly power in the marketplace. Like Facebook, they need to be broken up and held accountable."

Google's competitors also praised the complaint. Yelp, which has long criticized how Google presents search results, said the suit may be more significant than past cases, because Google's search engine is the core of the company.

"Bringing an antitrust case against the most powerful company in the world requires determination and courage, so we applaud the cooperative, bipartisan work of the state attorneys general and all the staff involved in this lawsuit," Luther Lowe, Yelp's senior vice president of public policy, said in a statement. "We hope today's action is the beginning of a return to a more vibrant and open internet."

Google has come under antitrust scrutiny in the past. In 2013, the Federal Trade Commission wrapped up a two-year investigation into Google after allegations of biased search results. The agency, however, concluded that Google hadn't violated antitrust laws.