GOOG Alphabet Inc

By Brent Kendall and John D. McKinnon 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (May 16, 2020).

WASHINGTON -- Both the Justice Department and a group of state attorneys general are likely to file antitrust lawsuits against Alphabet Inc.'s Google -- and are well into planning for litigation, according to people familiar with the matter.

The Justice Department is moving toward bringing a case as soon as this summer, some of the people said. At least some state attorneys general -- led by Texas Attorney General Ken Paxton, a Republican -- are likely to file a case, probably in the fall, people familiar with the matter said.

Much of the states' investigation has focused on Google's online advertising business. The company owns the dominant tool at every link in the complex chain between online publishers and advertisers. The Justice Department likewise is making Google's ad technology one of its points of emphasis. But it is also focusing more broadly on concerns that Google uses its dominant search business to stifle competition, people familiar with the matter said.

Details about the Justice Department's legal theories for a case against Google couldn't be learned.

Though the coronavirus pandemic has complicated work for the Justice Department, Attorney General William Barr has devoted considerable resources to the Google probe and continues to treat it as a top priority. Mr. Barr told The Wall Street Journal in March that he wanted the Justice Department to make a final call this summer. "I'm hoping that we bring it to fruition early summer," Mr. Barr said at the time. "And by fruition I mean, decision time."

Mr. Paxton of Texas said the pandemic was not slowing the states' efforts. "We've issued [civil subpoenas] to Google and impacted third parties. We hope to have the investigation wrapped up by fall," Mr. Paxton said in a statement. "If we determine that filing is merited we will go to court soon after that."

"We continue to engage with the ongoing investigations led by the Department of Justice and Attorney General Paxton, and we don't have any updates or comments on speculation. Our focus is firmly on providing services that help consumers, support thousands of businesses and enable increased choice and competition," a Google spokeswoman said.

The federal government has shared information it has received from Google with Texas and the other states, some people familiar with the matter said.

The department continues to gather information in its probe and all signs point toward it bringing a case, the people said, but both the federal and state investigations are ongoing and no final decisions have been made. Investigations at times can be settled without litigation, though it's unclear whether an agreement could be reached in the Google probes.

One unanswered question is whether the states will file their own complaint, or simply join in the federal case when it is filed. It's even possible different groups of states will file separate complaints. Texas has been focused closely on ad tech issues, while some other states have been more interested in Google's search function, for example, according to people familiar with the matter.

State officials generally recognize the benefits of cooperating with the Justice Department, which has relatively strong resources, some of the people said.

Wall Street Journal publisher News Corp is a longtime Google critic and is among a group of the publishers that have been contacted by antitrust investigators.

The lawsuits -- if they are filed -- could pose a direct threat to Google's businesses and rank among the most significant antitrust cases in U.S. history, alongside the government's antitrust case against Microsoft Corp. in the late 1990s. The search giant's critics have called for a range of sanctions against Google, from changes to its business practices to a breakup of the company.

As Google has grown into a powerful tech giant, it has long been on the federal government's radar, though it has largely avoided enforcement actions. The Federal Trade Commission, which shares antitrust authority with the Justice Department, previously conducted a broad investigation of Google but closed it in 2013, announcing that the evidence, on balance, didn't warrant it. The company made some voluntary changes to certain business practices.

The FTC's then-chairman, Jon Leibowitz, said that while some evidence suggested Google was unfairly biasing its search results to harm competition, the company's primary motivations were to highlight its products and improve the online experience for users.

The Wall Street Journal first reported last June that the Justice Department was launching a broad antitrust investigation of Google.

Nearly two months later, the department announced expanded investigative plans, with a focus on several leading tech giants. Both the DOJ and the FTC have been examining competition concerns related to companies including Facebook Inc., Amazon.com Inc. and Apple Inc. as well as Google.

The states announced their probe on the steps of the Supreme Court last September, on the same day they sent Google a civil subpoena seeking details about its online ad practices.

Write to Brent Kendall at brent.kendall@wsj.com and John D. McKinnon at john.mckinnon@wsj.com

(END) Dow Jones Newswires

May 16, 2020 02:47 ET (06:47 GMT)

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