The Google Antitrust Investigation

What’s Happening and How It May Potentially Affect Access to Legal Services

Earlier this month, the U.S. House Judiciary Committee joined attorneys general from 48 states to initiate an investigation of Google, Apple, Facebook and Amazon regarding their business practices. The probe will seek to determine if the companies have impeded competition and violated state and/or federal antitrust laws, by exercising too much power within their respective industries. At this point, no lawsuit has been filed and one is not imminent—investigators are merely gathering evidence.

Lawmakers and attorneys general say they are concerned that the four business giants control too much of their respective markets and may engage in anti-competitive practices. A bipartisan group from the antitrust subcommittee (of the House Judiciary Committee) sent written requests to the four companies earlier this month, seeking documents and internal communications related to market share and dominance. The companies have been asked to respond by October 14.

Texas Attorney General Ken Paxton, one of lead investigators in the Google probe, insisted, however, that the concerns are not simply a response to the search engine behemoth’s size or market power. Paxton stated that Google had engaged in “business practices [that] may have undermined consumer choice, stifled innovation, violated users’ privacy and put Google in control of the flow and dissemination of online information.”

This isn’t the first time antitrust concerns have been directed at Silicon Valley. Insiders say, however, that the current probe differs from the antitrust allegations against Microsoft in 1998. That lawsuit focused almost exclusively on one company and one market—Microsoft and its alleged software monopoly. In the Google and Facebook investigations, government attorneys will look at how the companies manage and use consumer data, how they target their advertising, and their respective roles as gatekeepers of communication.

Under state and federal laws, prosecutors and other officials can engage in a number of measures to encourage and promote competition within an industry. One possible outcome—Google may be broken up into smaller companies that can, ideally, lead to more competition for services.

What the Breakup of Google Could Mean for Consumers of Legal Services

The goal of the antitrust laws is to increase competition, which should provide concrete benefits to consumers. The breakup of Google would potentially provide the following benefits to individuals and businesses seeking legal services:

• Google currently has a virtual monopoly on what is known as “pay-per-click” or PPC advertising online. Because Google provides limited space for that type of advertising, consumers are necessarily exposed to a smaller number of options. The breakup of Google would likely lead to a number of other PPC providers, so that consumers would have visibility to a larger number of potential legal service providers.
• Because Google exercises a virtual monopoly, there’s very little price-based competition for pay-per-click advertising, resulting in high costs. Lawyers and law firms pass those costs on to their clients. If competition for PPC advertising increases, the costs of a pay-per-click campaign should go down and attorneys may pass those cost savings on to clients.
• With its virtual monopoly, Google has little incentive to maximize customer service or provide innovation that benefits customers. Competition will likely lead to more research and investment in the improvement of PPC and other forms of online advertising, increasing visibility and the user experience for consumers of legal services.