The US government is more likely to force Google to divest a key business with an antitrust lawsuit filed this week than a group of states that have pursued a similar case for three years, according to legal experts.
The complaint filed Tuesday in a Virginia federal court by the U.S. Department of Justice Antitrust Division tries to compel Google to sell part of its advertising technology unit.
The suit follows allegations in another antitrust case brought against Google in New York federal court by a Texas-led coalition of 17 states in 2020. Both suits accuse the Alphabet Inc-owned company of abusing its dominance in online advertising, which Google has vigorously denied.
The experts said a court would be more likely to order structural changes in a company with a nationwide impact if the U.S. government were making the argument, not just a group of states.
To the extent that a federal court is going to be in the business of breaking up Google, it is going to be a lot more comfortable doing that if the plaintiff is the federal government, according to Vanderbilt University law professor Rebecca Haw Allensworth.
Allensworth and other experts were skeptical that a court would force the sale of a business unit at a company as large and central to the economy as Google. In 2021, Google's Ad-tech business accounted for around 12 per cent of the company's revenue and plays a key role in its overall sales.
In September, a New York federal judge rejected Google's bid to dismiss it completely. The court disallowed some of the claims, including accusations that the company struck an illegal cooperation agreement with Facebook parent company Meta Platforms Inc.
The states suit asks for any remedies that the court deems appropriate, and Texas Attorney General Ken Paxton said all possible punishments are on the table. The Justice Department's suit seeks the sale of Google's Ad Manager suite, among other things.
The federal complaint has a degree of specificity that is not reflected in the other Google complaint, according to New York University law professor Harry First. That indicates that they are serious about changing the structure of Google's ads tech business. The Justice Department declined to comment, and the Texas Attorney General's Office did not respond to a request for comment. Google didn't respond immediately to a request for comment.
The federal government sometimes files its own suit or intervenes directly or directly in order to assert its nationwide perspective, but states often sue companies for alleged violations of antitrust law.
Legal experts said that while judges don't always defer to the federal government when it comes to state antitrust disputes, the opinions of the DOJ and U.S. Federal Trade Commission can be heavily influenced in their decisions.
After New York and 12 other states sued to block the merger of T-Mobile and Sprint in 2019, the U.S. government argued that the deal should go forward because it would improve wireless coverage in rural areas.
In that case, the DOJ urged the court to give weight to its uniform, nationwide perspective and deny the states' request for an injunction blocking the deal. The merger went through with certain conditions in a separate settlement brokered by the Justice Department, and the court agreed.
The federal government is in a much stronger position if the ultimate goal is to change the structure of the company, according to Syracuse University law professor Shubha Ghosh.
There are two largely parallel antitrust lawsuits by the states and the federal government that allege unlawful dominance in online searches. The company has denied those allegations as well.