- The U.S. Department of Justice is preparing for an antitrust investigation of Alphabet-owned Google, which dominates the internet search industry and controls about 37% of the U.S. digital ad market. The department reached an agreement with the Federal Trade Commission, which shares antitrust authority, that it would oversee any investigation of Google's business practices, according to several press reports citing unnamed sources.
- Google may face scrutiny over its dominance in digital advertising and the technology that advertisers and publishers use to buy and sell ads online, Bloomberg reported. Media companies such as News Corp., which publishes The Wall Street Journal and other newspapers, have complained about Google's middleman role.
- An investigation of Google would come as tech giants face greater scrutiny of their business practices worldwide. The European Union in March hit Google with a third antitrust fine while accusing the company of abusing its dominant position in online search advertising.
A Justice Department investigation of Google would mark a significant shift in the way the U.S. government treats Silicon Valley companies that have been a source of national pride. While it would likely be some time for any investigation to reach a conclusion and any potential fines might be easily absorbed by Google — meaning there is not likely to be an immediate impact for marketers — the news does underscore a shift after years of digital media being dominated by Google and Facebook with little oversight. The latter is itself facing more intense scrutiny these days following a series of privacy-related issues and big-name marketers like P&G are actively seeking to widen their array of digital partners over issues related to a lack of transparency.
Google has the best reputation for corporate responsibility worldwide, according to a study by the Reputation Institute, and has weathered negative publicity over a massive data breach at its Google Plus social network, accusations of sexual harassment and mistreatment of female employees and developing a censored search engine for China, among other high-profile incidents.
The federal government has mostly taken a hands-off approach toward U.S. tech companies — the last major antitrust case was first brought against Microsoft more than 20 years ago — especially compared with its European counterparts. But U.S. leaders have questioned the size and dominance of tech companies and their power to control significant parts of U.S. society, including the shopping choices of millions of consumers and the media they consume. Democratic presidential candidate Elizabeth Warren (D-Massachusetts) called for the breakup of the nation's top tech companies earlier this year, an idea that's gained some traction among consumers and other leaders.
In pressing an antitrust case, the Justice Department likely will have to demonstrate that consumers are harmed by Google's dominance. The search engine is hugely popular among Americans, but rival businesses like consumer review provider Yelp and database giant Oracle complain that Google's business practices are anticompetitive. The FTC during the Obama administration investigated Google for skewing search results, and closed the case in 2013 without further action. The FTC's Bureau of Competition in February created a 17-member task force to investigate tech mergers, including ones that already were approved. While the Justice Department may investigate Google, the FTC plans to inspect fellow giant Amazon's business practices, The Washington Post reported.