Sundar Pichai, CEO of Google, speaks to the media before the opening of the Berlin representation of Google Germany in Berlin on January 22, 2019.
Carsten Koall | Getty Images News | Getty Images
Google will likely face at least one antitrust lawsuit related to its advertising business from both the U.S. Department of Justice and state attorneys general in coming months, according to The Wall Street Journal.
Shares of Google parent Alphabet dropped sharply on the news, down as much as 3% after-hours.
The DOJ is aiming to file a case as soon as this summer, according to the report. At least some of the state attorneys general involved in the multistate probe led by Texas are likely to file suit in the fall, the Journal reported.
The DOJ declined to comment. A spokesperson for Texas Attorney General Ken Paxton declined to comment on the Journal report.
A Google spokesperson said in a statement: “We continue to engage with the ongoing investigations led by the Department of Justice and Attorney General Paxton, and we don’t have any updates or comments on speculation. Our focus is firmly on providing services that help consumers, support thousands of businesses, and enable increased choice and competition.”
The states’ investigation has been mostly focused on Google’s online advertising business, according to the report, though CNBC previously reported that its scope had expanded to include both search and its Android mobile operating system. Even if some states bring a suit against Google related to its ad business, it’s possible others could choose to pursue separate cases following different legal theories.
The DOJ’s probe has focused on Google’s ad business, but also more broadly on allegations that it has used its dominance in the search market to squash competitors, according to the Journal. The publication was not able to learn which legal theories the DOJ would seek to pursue if it brings a case.
It remains to be seen whether the state and federal enforcers will join together in a case against Google or go off on their own. State attorneys general usually welcome the opportunity to work alongside federal enforcers, who bring a vast trove of resources to the table. But the relationship between the states and the DOJ has appeared fraught over the past few years, most clearly when a group of state attorneys general challenged the department’s approval of T-Mobile’s merger with Sprint, which ultimately cleared.
The report suggests that enforcers have not been slowed down by the coronavirus pandemic which has caused most of their staff, like other workers throughout the country, to work remotely. Both the DOJ and Texas’ Paxton have signaled they were still fully open for business during the crisis.
The news comes nearly one year after reports began surfacing that the DOJ had begun a probe into the company’s competitive business practices. Google also faces a probe by the House Judiciary Committee alongside three of its tech peers. That probe, which is now expected to wrap up in the spring, will culminate with legislative proposals, rather than an enforcement action.
Google previously faced a federal investigation by the Federal Trade Commission regarding its search business. The FTC closed that case in 2013, unanimously opting not to bring a lawsuit, though a report later inadvertently sent to the Journal revealed staff had recommended pursuing a case. If the states or DOJ chooses to pursue a lawsuit against Google, it would become the most significant tech antitrust case since the government’s case against Microsoft which was originally brought in the late 1990s.
Read the full report in The Wall Street Journal.
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