WASHINGTON—The Justice Department’s plans to investigate Alphabet Inc.’s GOOG -1.28% Google have been building over time, amid a growing public conversation about whether the government should do more to scrutinize the handful of giant tech firms that dominate the U.S. landscape.
The department’s antitrust division and the Federal Trade Commission, which share federal antitrust enforcement authority, have sent a variety of signals that they were eager to explore cutting-edge questions about how big tech is affecting the competitive landscape.
While the FTC in February announced a new task force to consider tech competition, the Justice Department has been planning its approach behind the scenes, while also holding public events to educate its staff and the public about the contours of the tech debate.
The department last July hosted a speech by Franklin Foer, author of “World Without Mind: The Existential Threat of Big Tech,” a book that raises alarm bells about Google and other tech giants that have built their dominance on the collection and use of big data.
“There’s so much hanging in the balance when we talk about their size and dominance. And therefore so much is resting in your hands,” Mr. Foer told the Justice Department audience.
“It’s something we should all be thinking about,” Justice Department antitrust chief Makan Delrahim said in opening remarks during Mr. Foer’s appearance.
“ Having that 800-pound gorilla on your side is a big advantage ”
A couple of months later, the department met with a group of state attorneys general, including both Republicans and Democrats, who have raised concerns about big-tech dominance and tech-firm practices on issues like privacy. The two sides pledged to continue talking.
Louisiana Attorney General Jeff Landry, a Republican, said it was encouraging that the department now seems to be moving.
“Getting them to the table is going to really help accelerate the things that AGs on both sides of the aisle want to do,” Mr. Landry said. “Having that 800-pound gorilla on your side is a big advantage.”
In March, the department presented a speech by tech investor Roger McNamee, who has been deeply critical of Facebook Inc. and Google. And last month it held a public workshop exploring competition issues in advertising, including digital advertising, an issue that is likely to be a key piece of the Google probe, according to people familiar with the matter.
The Wall Street Journal reported Friday that the Justice Department is gearing up for an antitrust probe of Google. Out of public view, it built plans for an investigation while it worked out turf issues with the FTC. The commission conducted a broad U.S. probe of Google that ended in 2013 without enforcement action; this time, the department directly asked to be the agency to conduct an investigation, and the FTC agreed, people familiar with the matter said. That allowed Justice to begin moving forward in earnest.
Google critics, including rival businesses, that had been lodging complaints with the FTC are now being sent to the Justice Department instead, the people familiar with the matter said, adding that some have been in contact with the department already and others will be soon.
News Corp , which owns The Wall Street Journal, has complained about Google’s business practices to regulators in multiple countries.
The department is aiming to explore how Google uses its dominant position in search across a broad range of its businesses and whether the company exerts its market power unfairly to squelch smaller rivals whose innovations could make them competitive threats to Google, the people said. Justice Department officials, they said, have expressed an interest in a broad range of markets, from Google’s Android smartphone operating system to its third-party digital ad business, where Google is both a giant platform for selling ads on sites across the web and a dominant conduit for marketers to purchase online ads.
Google has grown to its current size and influence largely through its dominance in online search and its ability to leverage its search function into a massive advertising business. In addition, the company’s Android smartphone operating system has become even more widely used than Apple Inc.’s , allowing it to become a powerful force in the mobile revolution. Its YouTube unit has become a huge source of online video. New ventures into self-driving vehicles, artificial intelligence and other technologies could extend Google’s dominance.
Underlying many of those concerns is the vast array of data the company compiles.
Still, there is an active debate over Google’s dominance. While critics complain that Google has too much power over users and businesses on the internet, and even over society and politics, defenders believe many of those concerns are exaggerated, and they question whether antitrust law is the best way to address them; some argue that market forces will balance the equation over time.
Despite the FTC’s handling of the prior Google probe, the Justice Department does have previous experience of its own with Google. The department’s antitrust division in 2008 effectively torpedoed a planned Google partnership with Yahoo ; the company walked away from the deal after the department indicated it would challenge the pact.
The department in 2011 allowed Google to acquire flight-data company ITA Software, though it imposed conditions on the deal.
Google critics spent the weekend trying to make sense of how the department’s next chapter with the company might unfold.
“For the good of consumers and competition on the internet, we welcome any renewed interest by U.S. regulators into Google’s anticompetitive behavior,” said Stephen Kaufer, chief executive of TripAdvisor, a travel-review website that has long complained about the company.
But others doubted that the Trump administration would circumscribe what they view as Google’s anticompetitive practices. “Holding dominant platforms accountable for anticompetitive conduct is imperative, but I don’t have a lot of faith that President Trump’s Justice Department will stand up for working people against powerful corporations like Google and Facebook,” said Rep. David Cicilline (D., R.I.), who chairs a House antitrust subcommittee.
Write to Brent Kendall at brent.kendall@wsj.com, John D. McKinnon at john.mckinnon@wsj.com and Keach Hagey at keach.hagey@wsj.com
https://www.wsj.com/articles/googles-scrutiny-by-justice-department-has-been-building-11559486464
2019-06-02 14:41:00Z
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