US government preparing potential investigation into Google over its monopoly on competition

Potential case looms after EU fined technology behemoth £7bn in last three years

US Justice Department has taken first steps into opening antitrust investigation into the company, anonymous sources have revealed (Tolga AkmenAFP/Getty Images)

The US Justice Department has taken early steps towards opening a federal antitrust investigation into Google, according to three people familiar with the matter, marking a new chapter in the tech giant’s troubles with regulators around the world who contend the company is too large and threatens rivals and consumers.

The move thrusts Google back under the regulatory microscope in the United States roughly six years after another federal agency probed the search and advertising behemoth on grounds that its business practices threatened competitors – though the government spared the company from major punishment at the time.

The exact focus of the Justice Department’s investigation is unclear.

The department began work on the matter after brokering an agreement with the government’s other antitrust agency, the Federal Trade Commission (FTC), to take the lead on antitrust oversight of Google, according to the people familiar with the matter, who spoke on the condition of anonymity because the deliberations are confidential.

The probe could threaten Google with a harsh examination of its sprawling digital empire, which includes its dominant position in search and advertising, its Android mobile operating system and newer gambits such as self-driving cars and drones.

Its expansive, data-hungry footprint increasingly has drawn the attention of Democrats and Republicans on Capitol Hill, who say that Google – and some of its peers in Silicon Valley – have become too large and should potentially be broken up.

The Department of Justice declined to comment, citing its policy against confirming or denying investigations.

The FTC did not respond to a request for comment. Google declined to comment. The news was first reported by the Wall Street Journal.

Some Democrats seeking the presidency in 2020, such as Senator Elizabeth Warren of Massachusetts, have explicitly threatened more oversight of the tech industry if they win the White House.

Google and other big tech companies “have too much power and they’re using that power to hurt small businesses, stifle innovation, and tilt the playing field against everyone else,” Ms Warren said in a statement late on Friday. “It’s time to fight back.”

The Trump administration has also studied Silicon Valley – the Justice Department convened state attorneys general last year to explore the competition concerns posed by Google and other big tech companies.

Some of those state attorneys general expressed their own interest in banding together and opening an antitrust investigation of Google at the time.

In Google’s previous tangle with antitrust regulators, FTC officials sought to determine whether the company’s search algorithms – and its practice of devoting better screen real estate to its services over those of rivals – threatened competitors.

The FTC also investigated Google’s advertising practices, as well as the means by which the company licensed to its rivals some of the critical patents involving mobile phones.

But the FTC opted in 2013 against forcing Google to alter broad aspects of its business, including the way it displays search results.

The agency also decided not to pursue a breakup of Google.

The decision by the agency, at the time under President Barack Obama, drew the ire of critics who felt the agency should have challenged Google in a way similar to when the government sued Microsoft in the 1990s in one of the last major US antitrust cases.

The government at the time alleged that Microsoft broke federal antitrust laws to protect its dominant operating system, Windows, and crush competitors.

In contrast, Google has faced greater antitrust scrutiny abroad.

The European Union has been a leading force in actions against the tech giant, and regulators there have imposed roughly $9bn (£7.12bn) in fines against the company in the past three years.

Those rulings include findings of violations of competition rules in the way Google presents search results.

EU rulings also faulted the company for how it licenses its Android smartphone operating system to device makers. EU officials also have threatened additional investigations and potential penalties, spurred on by allegations from some of Google’s competitors, such as the reviews site Yelp.

At the Justice Department, a full-fledged antitrust probe of Google could present another major test for an agency that has most recently been scrutinising the tech and telecom industries.

Last year, the department unsuccessfully challenged AT&T’s purchase of Time Warner, and in recent weeks, antitrust lawyers there have raised concerns about the proposed merger of Sprint and T-Mobile.

Makan Delrahim, who currently leads Justice’s antitrust division, is on his second tour of duty at the agency.

Mr Delrahim previously represented corporate clients including Google during its purchase of the ad giant DoubleClick in 2007.

The Washington Post