Five ways Google could be vulnerable to a Justice Department probe

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On Saturday, The Wall Street Journal reported that investigators from the Department of Justice will examine “Google’s business practices related to its search and other businesses.” It’s one of the biggest threats Google has ever faced from US regulators, but so far, we don’t know much about the case itself. The Journal’s description was open-ended, and the nature of Google’s business makes it vulnerable to antitrust challenges from a number of different directions. Google dominates the search market, but it also holds nearly 40 percent of the digital advertising market, and Android is the world’s most popular operating system. In all of these markets, critics have claimed that Google is simply too big, and it’s faced billion-dollar fines over each of them in Europe.

The probe is supposedly in its early stages, and it’s not clear what the Justice Department might consider worth investigating. But the earlier EU fines, along with a 2013 Federal Trade Commission investigation, offer some guidance. We’ve broken down some of the major monopoly allegations against Google as well as how courts and regulators have treated them so far — from search engine rankings to Android app bundling. (Google, perhaps understandably, did not respond to a request for comment.)

Google is the biggest single player in online advertising: one forecast puts its market share at 37.2 percent in 2019, compared to around 22.1 percent for its closest rival, Facebook. It makes money on two fronts: advertisers can buy ad space through a Google exchange, and websites can serve Google ads through the AdSense program. It’s been accused of abusing its power on both sides of the transaction, which is something Google denies.

The European Commission has specifically investigated Google’s relationship with web publishers. In March, it found that Google had unfairly banned AdSense customers from placing other search engines and ad boxes on their sites. (Google phased out this clause, but it retained the right to “premium” ad space on websites until 2016.) Publishers had fewer options for selling their ad space as a result, potentially driving down their revenue. At the same time, anyone using Google’s ad placement service was also pushed toward using the search engine exclusively, making it harder for competitors like Bing to get off the ground. The EC court fined Google €1.49 billion, saying it had “cemented its dominance” through illegal means. “Google’s conduct harmed competition and consumers,” the court said, “and stifled innovation.”

The FTC also examined this policy, and although it cleared Google in 2013, investigators privately expressed serious concerns about the practice. Bloomberg has noted that AdSense is a declining part of Google’s business, and the company has changed its policies to avert some of the key complaints. But the Justice Department could still decide that these exclusivity deals helped Google — unfairly — reach its current level of power.

Antitrust watchdogs aren’t just worried about how Google places ads on websites; they’re worried about how it sells that ad space. Google historically auctioned off space in a way that favored its AdX marketplace. When publishers and ad tech companies tried to get around that with something called header bidding, Google pushed back with a centralized system that would still give Google’s own exchange a potential advantage.

US and EU regulators approved Google’s acquisition of DoubleClick — which helped Google establish its ad empire — in 2008. Since then, they’ve focused their critiques on things like exclusivity deals. And Google could argue that it’s not hurting consumers or treating other exchanges unfairly. Header bidding can make pages load more slowly, so discouraging it could help web users. Google has dropped policies like the “last look” advantage, which let Google one-up other bids. Amazon has also started chipping away at Google and Facebook’s advertising market share, so it could also say there’s more competition.

Even so, “the fact that Google is able to dominate the advertising market is quite dangerous,” says Matt Stoller, a fellow at the anti-monopoly advocacy group Open Markets Institute. It gives Google power over how people can make money online — and, by extension, what kind of content people see when they browse the web.

But for ordinary users, ad tech might still seem a bit abstract, and there’s a much more visible controversy brewing with Google search.

Google uses search to highlight other Google services, including its business review and shopping platforms. More worryingly, it’s also demoted search results from competing companies. The UK-based comparison shopping platform Foundem claims that Google buried its site while promoting Google Shopping, for instance. EU regulators agreed that the company had overstepped, fining Google €2.4 billion.

Restaurant recommendation site Yelp has also complained about Google’s special search cards, which appear on top of its normal results. (Both of these allegations are unrelated to President Donald Trump’s conspiratorial claims of political “search bias.”) “There’s a lot of great evidence out there showing that Google sort of undertook a strategy to keep its competitors at bay,” says Yelp public policy director Luther Lowe.

The FTC took a look at search manipulation but eventually cleared Google, despite internal concerns. American antitrust law centers on harm to consumers, not businesses — and Google successfully argued that it’s simply offering a better experience than these other sites. But Yelp has since countered this claim with its own studies, suggesting that these cards reduce the usefulness of search results. Former FTC adviser Tim Wu called the research “surprising and shocking,” and it might count against Google in a Justice Department probe.

Google releases its Android operating system under an open-source license, but phone and tablet makers need to license popular apps like Google Maps and the Google Play Store. For a long time, these manufacturers had to bundle a whole suite of Google services, including Chrome and search. This disadvantaged rival browser and search engine companies, leading the EU to hand down a record-breaking €4.3 billion fine. In response, Google started offering European users a choice of browser and search engine. It also unbundled its services in Europe and started charging an app licensing fee instead.

This may be Google’s most direct equivalent to Microsoft’s “browser war,” which led to a massive antitrust trial in the ‘90s. But The Wall Street Journal’s reporting doesn’t mention Android, and the FTC’s earlier investigation focused more on ads and search practices. So we’ll have to wait to see how broad the Justice Department’s investigation really is.

All of the preceding claims have been around for years, and they involve core parts of Google’s business. But they’re not the only things that might catch the attention of antitrust watchdogs. Google AMP, for example, has raised eyebrows among regulators, activists, and web publishers. It makes pages load super fast on mobile browsers, but it also acts like a special Google-built portal to the web, granting the company a huge amount of power. Google has answered this criticism by giving up some control of AMP, which is an open-source project, to a multicompany committee.

To a far lesser extent, some critics are worried about Google’s moves to block “bad” ads on Chrome — noting that Google has the means and motive to favor its own ads in the process, and Chrome holds an estimated two-thirds of the browser market. When some code suggested that Google might limit third-party ad-blocking extensions, the developers of Ghostery threatened to file an antitrust complaint, until Google said it had never intended to break the extensions.

These complaints haven’t garnered nearly as much attention, and they’re likely to remain in the background of any antitrust probe. But they’re a reminder that Google’s reach is constantly expanding — and so are the complaints against it.

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