by BLOOMBERG / pic by BLOOMBERG
The Justice Department is scrutinizing Google’s digital advertising and search operations as authorities gear up a broad antitrust review of the market power of giant internet companies, according to people familiar with the matter.
Antitrust officials have been actively meeting over the past month with third-party companies that could have grievances against Google, including publishers and consumer-facing websites, said two people familiar with the matter. Advertisers and ad-tech companies have also met with the officials, and more meetings are on the calendar, one of the people said.
The focus on advertising and search operations signals where the department could be taking its inquiry, which is in its early stages and could drag on for months. The range of companies meeting with the antitrust officials goes beyond those that have previously voiced complaints, which include Oracle Corp., News Corp. and Yelp Inc., the person said.
Bloomberg reported in June that the Justice Department was preparing to investigate Google, but this is the first indication of the status and scope of the review.
The antitrust division, led by Makan Delrahim, is pouring resources into the inquiry, drawing in lawyers from other sections of the agency to study the issues, one of the people said. While the division is exploring the digital advertising and search markets in the review’s initial stages, it will continue to narrow down the ultimate focus, one of the people said.
Google controls much of the technology that news publishers and marketers use to serve ads across the internet and nets most of its revenue from ads. The company reported $116.3 billion in advertising revenue last year, which represented 85% of overall sales. It doesn’t break out its revenue by channels. Publishers and rivals have complained that Google’s dominance hinders competition in that market. Earlier this year, the European Union fined Google $1.7 billion for violating competition law with its online practices.
Google said its innovations have reduced prices and expanded choice for consumers and merchants, pointing to its testimony before a House antitrust panel in July.
“We have created new competition in many sectors, and new competitive pressures often lead to concerns from rivals,” Google lawyer Adam Cohen said in prepared comments for the hearing. “We have consistently shown how our business is designed and operated to benefit our customers.”
The Justice Department declined to comment. The people described the investigation under condition of anonymity due to the confidential nature of the inquiry.
Attorney General William Barr has elevated a lawyer from the antitrust division to be his point person on the review, signaling his hands-on interest in the issue. Lauren Willard has been appointed to serve as his counselor and report to him on developments in the inquiry, according to a department official.
The Justice Department last month announced its broad review of whether technology giants are hurting competition following mounting criticism across Washington that the companies have become too big and too powerful. The department hasn’t specified which firms it would scrutinize.
Bloomberg reported in June that U.S. antitrust agencies carved up oversight of four tech giants, with the department taking Alphabet Inc.’s Google and Apple Inc., and the Federal Trade Commission claiming Facebook Inc. and Amazon.com Inc.
The investigation is a sign of the escalating pressure on tech giants, from Capitol Hill to President Donald Trump, who accuses the companies of silencing conservative views.
The giants of the industry are under fire over massive collection of user data, failing to police content on their platforms, and claims that they are harming competition and reducing choices for consumers.