Google's Expulsion from Paradise: What the US Government's Antitrust Lawsuit Means

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Google headquarters in California: The government in Washington and eleven states are suing

Photo: Marcio Jose Sanchez / AP

It's an attack just before the final whistle.

Two weeks before the presidential election, the Trump administration filed an antitrust lawsuit against Google on Tuesday.

If federal judges in Washington bow over the 64-page complaint in the coming months, Donald Trump and his attorney general, William Barr, may no longer be in office.

So what is the US government doing?

Critics suspect that behind the maneuver there is simply Trump's anger at the tech companies, by which he feels notoriously badly treated.

Others suspect that the incumbent wants to demonstrate the electorate's ability to act in the last few meters.

But a third explanation is also conceivable: The former telecommunications lawyer Barr wants to go down in the history books as the one who broke the power of the Silicon Valley giants.

Or at least tried to.

Whatever the motives - the effects should not only hit the search engine provider, but also the other tech giants such as Facebook and Amazon.

The industry must now be aware that the wind has turned.

For a long time her business conduct had met with resistance, especially in Europe, while at home a laissez-faire attitude prevailed.

But even in the home market, Google & Co are no longer everyone's darling.

But large corporations eyed suspiciously.

The Democrats also welcome the move

Prosecutors from eleven states have joined the government's lawsuit.

And for once, the Democrats are in agreement with the Trump administration on the thrust.

So even the Democratic Senator Elizabeth Warren wrested a kind of praise: Although "Bill Barr is a corrupt Trump buddy who should not be Minister of Justice," she told the technology blog Recode.

The Justice Department, however, is pursuing "a legitimate, long-looming lawsuit against Google for anti-competitive, manipulative, and often illegal behavior," added Warren:

But it was mainly Barr himself who pushed the process forward, while his lawyers warned against a rash approach.

Many people would be amazed "how these giant monsters that exist today in Silicon Valley took their shape under the eyes of the competition watchdog," the minister justified his haste.

The ministry is now concentrating on one allegation: That the Alphabet subsidiary Google, thanks to a quasi-monopoly on search queries, earns 40 billion dollars a year from advertisers - and that it pays the mobile phone operators from this income to set up Google as a search engine by default.

According to estimates by the analysis firm Sanford C. Bernstein, Apple alone collects around eight billion dollars a year.

Overall, according to the complaint, 95 percent of all search queries on mobile devices run through Google today.

So in fact a monopoly.

Google declares the lawsuit deeply "flawed"

It is questionable whether this dominance can be achieved with fair or unfair market means.

Google declared the lawsuit "deeply flawed" on Tuesday.

People would use the search engine "because they choose - not because they are forced to or cannot find alternatives," the company said on Twitter:

But the overwhelming power of the Alphabet company, which is worth around a trillion dollars on the stock exchange and has cash reserves of 120 billion dollars, is not only a thorn in the side of Trump's attorney general.

The tech companies are under concerted attack from American politics and competition watchdogs:

• Almost all

  50 states

  have now initiated their own investigations against Google.

  One group of public prosecutors has taken on the advertising business, another deals with search behavior.

  According to estimates by the service provider eMarketer, Google's annual revenue from digital ads will rise from around 34 billion dollars in 2019 to over 42 billion dollars in 2022 in the US alone.

• The

  Democrats in the House of Representatives

  recently submitted a 449-page general settlement with the tech industry.

  The responsible committee members accuse Google, Apple, Amazon and Facebook of abusing their market position.

  Once "aggressive underdog start-ups" have become monopolies, "as we last saw them in the era of oil barons and railroad tycoons," the report sums up.

Some industry experts are still skeptical.

Politicians lacked the instruments to break up the corporations, believes Isaac Boltansky of the investment bank Compass Point.

The stock market also reacted rather bored.

Alphabet shares lost minimally at the opening and then rose again over the course of the day.

Eight years ago the competition authority had already examined legal proceedings against Google.

The officers collected material for a year - but in the end they waived.

Microsoft proceedings dragged on for more than ten years

Alphabet is not an easy opponent: The financially strong company can send armies of lawyers and PR consultants into battle with politicians.

But at least: The almost twelve million dollars that the company spent the lobbying work in Washington last year alone could not prevent the lawsuit.

The Justice Department is now proving "that not only Silicon Valley can successfully clone products," says competition expert Tim Wu from Columbia Law School.

"Basically, they cloned the Microsoft case and added the name to Google."

If this assessment is correct, then Trump and his attorney general will probably not live to see the outcome of the proceedings even if they win the election in November contrary to the current polls.

The monopoly proceedings against Microsoft had dragged on for more than a decade before it finally resulted in a settlement.

Looking back, some observers do not consider the concessions agreed at the time to be the actual success of the cartel authorities.

But that the Microsoft management got so involved in the legal dispute that there was room for competition on the market.

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