Report: DOJ Preparing Anti-trust Investigation into Google's Parent Company

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Posted: Jun 01, 2019 10:09 AM
Report: DOJ Preparing Anti-trust Investigation into Google's Parent Company

Source: (AP Photo/Ted S. Warren)

The Wall Street Journal reports that the Department of Justice is preparing an anti-trust investigation into Alphabet, Inc., the parent company of Google and YouTube as well as more than 200 other companies.  

A source close to the matter told the paper that the "department’s antitrust division in recent weeks has been laying the groundwork for the probe." A previous Federal Trade Commission anti-trust investigation into Google ended in 2013, though no action was taken by the government. 

This potential new probe comes as Republican and Democratic lawmakers alike have raised concerns over the level of actual competition in the Big Tech marketspace. As noted by the Wall Street Journal, Sen. Ted Cruz (R-TX) said in an April hearing, "If we have tech companies using the power of monopoly to censor political speech I think that raises real antitrust issues." 

Sen. Elizabeth Warren (D-MA) has also called for Alphabet, Inc. to be broken up by the federal government. Several other Democratic presidential candidates have also called for tighter regulations on Silicon Valley corporations. 

In the past, various Department of Justice officials have expressed similar concerns regarding how much influence companies like Google have in the American economy. The Wall Street Journal reports that during William Barr's confirmation hearings in January, the now-attorney general said, "I don’t think big is necessarily bad, but I think a lot of people wonder how such huge behemoths that now exist in Silicon Valley have taken shape under the nose of the antitrust enforcers...You can win that place in the marketplace without violating the antitrust laws, but I want to find out more about that dynamic.”

Google, the world's number one search engine which operates on an "aggregate and advertise" model, did not confirm whether it had been contacted by the DOJ. Some experts say that given Google's political connections on both sides of the aisle, taking down the tech giant would be a "daunting task." Others like George Gilder argue that technology like the blockchain will destroy Google's hold on the marketplace. As Gilder wrote in, Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy, "Google’s security foibles, its “aggregate and advertise” model, its avoidance of price signals, its silos of customer data, and its visions of machine mind are unlikely to survive the root-and-branch revolution of distributed peer-to-peer technology, which I call the “cryptocosm.”

Today, all around us, scores of thousands of engineers and entrepreneurs are contriving a new system of the world that transcends the limits and illusions of the Google realm," Gilder noted

According to the paper, several other third-party search engines confirmed they had been contacted by the DOJ. Despite no previous action by the government, a 2012 FTC memo reported that the "evidence paints a complex portrait of a company working toward an overall goal of maintaining its market share by providing the best user experience, while simultaneously engaging in tactics that resulted in harm to many vertical competitors, and likely helped to entrench Google’s monopoly power over search and search advertising," which could lay the groundwork for the potential new investigation.