Google faces ‘monopoly’ probe across nearly 50 US states

Google is facing a widespread investigation in the United States for “potential monopolistic behaviour”.

Attorney generals from 48 states and the District of Columbia and Puerto Rico have joined together to probe possible antitrust violations – in a move which one of the lawyers said will send a “strong message” to Google.

Monday’s announcement follows one from a separate group of states last Friday disclosing an investigation into Facebook’s market dominance.

The two investigations further extend the widespread antitrust scrutiny of big technology companies, beyond sweeping federal and congressional inquiries and market regulation enforcement action by European watchdogs.

Facebook
Image: A separate inquiry is being launched into Facebook’s market dominance

Google’s parent company Alphabet has a market value of more than $ 820bn (£660bn) and controls many facets of the internet so it is fairly impossible to surf the web for long without running into at least one of its services.

Shares initially fell slightly after the announcement before recovering.

The tech giant’s dominance of online search and advertising enables it to target millions of consumers for their personal data.

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Google expects the state authorities will ask the company about past similar probes in the US and internationally.

Notably, California, the home state to Silicon Valley and several other havens for technology companies is not part of the new investigation.

Critics often point to Google’s 2007 acquisition of online advertising company DoubleClick as pivotal to its advertising dominance.

Google was fined $ 1.7bn (£1.28bn) by the European Commission in March for unfairly inserting exclusivity clauses into contracts with advertisers, putting rivals at a disadvantage in the online ad business.

Google has tended in the past to argue that although its businesses are large, they are useful and beneficial to consumers.

Federal and state regulators and policymakers are increasingly concerned with Google’s impact on smaller companies striving to compete in its markets, as well as with the company’s impact on ordinary internet users.

Experts believe the probe could focus on at least one of three areas that have caught regulators’ eyes – advertising, online search and Google’s mobile device operating system Android.

Google will have controlled 31.1% of global digital ad revenue in 2019, according to estimates by eMarketer, pushing Facebook into a distant second-place.

European Competition Commissioner Margrethe Vestager talks to the media at the European Commission headquarters in Brussels
Image: European competition commissioner Margrethe Vestager has led probes into tech firms

In the online search realm, Google has faced harsh criticism in the past for favouring its own products over competitors at the top of search results.

As a result the EU fined Google £2.1bn for promoting its own shopping service last year. Google is appealing the fine.

Google’s smartphone operating system, Android, is the most widely used in the world, and European regulators stepped in here too, last year fining Google $ 5bn for forcing smartphone makers to install Google apps, thereby expanding its reach.

The US Justice Department opened a sweeping investigation of big tech companies this summer, looking at whether their online platforms have hurt competition, suppressed innovation or otherwise harmed consumers.

The Federal Trade Commission has been conducting its own competition probe, as has the House Judiciary subcommittee on antitrust.

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