Oct 20, 2020 - Technology

How the states fit into DOJ's antitrust case against Google

Illustration of a laptop computer with binary code in the shape of the United States

Illustration: Sarah Grillo/Axios

When the Justice Department filed its antitrust lawsuit against Google on Tuesday, it did so without the backing of most of the state attorneys general who have also been probing the search giant.

Yes, but: Those states may well swoop in later to expand the case to cover even more competition concerns.

What's happening: The DOJ and 11 Republican AGs from states including Texas, Florida and Georgia accused Google of using anticompetitive tactics to illegally monopolize the online search market.

  • Conspicuously absent from that group are dozens more AGs comprising a bipartisan coalition of nearly every top state prosecutor in the country that has been investigating the company on antitrust grounds for more than a year.

The catch: That doesn't mean the other AGs oppose bringing antitrust action against Google. The remaining states may want to move ahead with separate legal actions and join the case later, DOJ officials told reporters Tuesday, and the agency doesn't take their sitting out the initial filing as "non-support."

  • New York, Colorado, Iowa, Nebraska, North Carolina, Tennessee, Arizona and Utah will continue investigating Google's dominance in search and related industries, New York AG Letitia James said shortly after the Google suit was filed. (A multistate investigation into Facebook over antitrust issues continues as well, she said.)
  • A source familiar with the matter told Axios that the continued investigation includes more than the eight states included in James' statement.

What they're saying: James explained how any action by this group of states would fit into the DOJ's plans: "We plan to conclude parts of our investigation of Google in the coming weeks. If we decide to file a complaint, we would file a motion to consolidate our case with the DOJ’s. We would then litigate the consolidated case cooperatively, much as we did in the Microsoft case.”

  • Republican Utah Attorney General Sean Reyes said in a statement he "understood" why the DOJ filed its suit sooner than his group of states' case and other states will move forward soon.

Between the lines: The states pressing ahead may simply be focused on different competition issues than the DOJ, which homed in on Google's use of agreements to be the default search provider for devices, wireless carriers and web browsers.

  • Those states could be interested, for instance, in looking at Google preferencing its own products in search or concerns that it uses the Android operating system to stifle competition, Cowen analyst Paul Gallant wrote in a note.

The big picture: "If the states brought an additional complaint, it's an opportunity to expand what the case is about," Charlotte Slaiman, competition policy director at Public Knowledge, told Axios. "It's common in really important antitrust cases like this that the states would be involved."

Of note: The apolitical nature of the case, which Slaiman called "strong," dims the prospects that a potential new administration would drop it or that it could be perceived as politically motivated despite only Republican AGs being signed on at the outset, she said.

  • Even if a Biden DOJ did have concerns about the case, it could amend or expand the complaint instead of scrapping it, Slaiman said.

Be smart: That process could also give the remaining AGs a fresh chance to try to make the case more about the issues they may still be probing.

  • "We don’t know what is going to happen in November," Arizona AG Mark Brnovich told Axios. "We don’t know what the Department of Justice will look like — regardless of who wins the election — in January or February, so I personally would be reluctant to commit and say, 'This is our path or this should be our path, as state AGs.'"

The other side: Tech trade group NetChoice, which counts Google as a member, said the DOJ's suit stands on "shaky ground, convincing only a handful of state Attorneys General to join."

What's next: Google has 30 days to respond to the initial DOJ filing, a person familiar with the case said.

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