WASHINGTON—The Justice Department filed its expected antitrust lawsuit against Google Tuesday (Oct. 20), joined by 11 states attorneys general. It called the company an illegal monopoly and vowed to "remedy the competitive harms."

The states are Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas.

Justice likened the suit to the iconic antitrust actions against AT&T and Microsoft.

Justice charges Google with "unlawfully maintaining monopolies through anticompetitive and exclusionary practices in the search and search advertising markets," including by using ad revenues to anticompetitively pay phone manufacturers, carriers and others to keep Google as their default search engine.

"Today’s lawsuit by the Department of Justice is deeply flawed," said a Google spokesperson. "People use Google because they choose to—not because they're forced to or because they can't find alternatives."

The antitrust suit, which was filed in the U.S. District Court for the District of Columbia, says Google acted anticompetitively by:

• Entering into exclusivity agreements that forbid preinstallation of any competing search service.
• Entering into tying and other arrangements that force preinstallation of its search applications in prime locations on mobile devices and make them undeletable, regardless of consumer preference.
• Entering into long-term agreements with Apple that require Google to be the default—and de facto exclusive—general search engine on Apple’s popular Safari browser and other Apple search tools.
• Generally using monopoly profits to buy preferential treatment for its search engine on devices, web browsers and other search access points, creating a continuous and self-reinforcing cycle of monopolization."

"Google has foreclosed any meaningful search competitor from gaining vital distribution and scale, eliminating competition for a majority of search queries in the United States," Justice alleges, "and [b]y restricting competition in search, Google’s conduct has harmed consumers by reducing the quality of search (including on dimensions such as privacy, data protection and use of consumer data), lessening choice in search and impeding innovation."

“Today, millions of Americans rely on the internet and online platforms for their daily lives. Competition in this industry is vitally important, which is why today’s challenge against Google—the gatekeeper of the internet—for violating antitrust laws is a monumental case both for the Department of Justice and for the American people,” said Attorney General William Barr of the announced suit. “Since my confirmation, I have prioritized the Department’s review of online market-leading platforms to ensure that our technology industries remain competitive. This lawsuit strikes at the heart of Google’s grip over the internet for millions of American consumers, advertisers, small businesses and entrepreneurs beholden to an unlawful monopolist.”

“As with its historic antitrust actions against AT&T in 1974 and Microsoft in 1998, the Department is again enforcing the Sherman Act to restore the role of competition and open the door to the next wave of innovation—this time in vital digital markets,” said Deputy Attorney General Jeffrey A. Rosen. The search giant has long been in the Washington spotlight, dating back at least to hearings under then Senate Commerce chairman Jay Rockefeller (D-W. Va.), over its monopoly, either natural or unnatural, over online search and allegations it disadvantaged competitors.

Justice, the FTC and Congress have all been investigating Big Tech, including Google, over how it got that way and how that vast power is used.

In a separate announcement, New York Attorney General Letitia James and the attorneys general of Colorado, Iowa, Nebraska, North Carolina, Tennessee, and Utah said they will continue their separate investigation into Google, which should be wrapping up in the "coming weeks," said James' office.

"If we decide to file a complaint, we would file a motion to consolidate our case with the DOJ’s. We would then litigate the consolidated case cooperatively, much as we did in the Microsoft case,” she said, adding that a multistate antitrust investigation into Facebook continues.

While ISPs used to be Washington's favorite regulatory target as alleged gatekeepers, edge players have taken over the spotlight over issues like search and privacy and content moderation.

President Donald Trump, who said Silicon Valley is out to un-elect him, had signaled Monday (Oct, 19) that some kind of lawsuit against The Edge was imminent.

The President's signaling of a lawsuit came after he was asked about Sec. 230 issues., but on Tuesday Barr said the Google suit was a separate issue from the government's concerns about online platform's Section 230 immunity from civil liability over their treatment of third-party content.

"The complaint filed today against Google is based on violations of the U.S. antitrust laws and is separate and distinct from concerns raised about content moderation and political censorship by online platforms," said Barr. 

Barr also signaled the suit did not close the book on the department's investigation of Big Tech and antitrust. "This is an important milestone, but not the end of our review of market-leading online platforms," he said. "The Department will continue to vigorously investigate and enforce the antitrust laws where appropriate to protect and promote competition in the digital economy for the benefit of the American consumer.”

"Today’s lawsuit is the most important antitrust case in a generation," said Sen. Josh Hawley (R-Mo.), one of Big Tech's biggest critics. "Google and its fellow Big Tech monopolists exercise unprecedented power over the lives of ordinary Americans, controlling everything from the news we read to the security of our most personal information. And Google in particular has gathered and maintained that power through illegal means. That is why I launched a sweeping antitrust investigation of Google when I was Missouri Attorney General, and that’s why I stand behind the Department of Justice’s actions today. But to be clear—this is just a first step, and I will continue to fight for the legislative solutions needed to end the tyranny of Big Tech."

Not surprisingly, computer companies were not happy with the announcement.

“One reason the U.S. technology sector is the envy of the world is antitrust policy that encourages dynamic markets that reward innovators and disrupt sluggish competitors,' said Computer & Communications Industry Association President Matt Schruers. "It cannot escape notice that this suit was hurried out on the eve of an election where the Administration has aggressively pressured tech companies to take actions in its favor. Antitrust law should be driven by consumers’ interests, not political imperatives. We look forward to a court’s review of the facts and the evidence.”

WASHINGTON—ABC, CBS, Fox and NBC television affiliates have joined forces in an attempt to convince the Department of Justice’s Antitrust Division that the competition standards for broadcast television are out-of-date and are in need of an update to properly evaluate the impact of satellite, cable and digital competition.

In a joint letter to Assistant Attorney General Makan Delrahim, the affiliates claim that the Antitrust Division has only local broadcast stations competing against each other in their local markets and excludes satellite, cable and digital when it comes to viewership and advertising data. This viewpoint no longer matches the current market reality, the affiliates argue, but it is continuously the determining factor in the division’s review of broadcast transactions, “stifling broadcasters’ ability to achieve efficiencies to allow them to provide high-quality entertainment programming and locally-focused news, weather and sports.”

When it comes to local advertising, the affiliates argue that the division’s definition for relevant markets is too narrow and does not account for the full array of competitive services. The division only considers local broadcast TV advertising and excludes cable spot advertising, digital advertising and advertising on all other forms of media. This does not take into account that audiences and advertisers are substituting TV advertising with digital advertising, according to the affiliates.

PLUS: IAB: Linear TV Advertising Down 24% in 2020

The affiliates cite a Kagan report that showed that digital ad revenues grew by a compound annual growth rate of 17.7% from 2010-2019, with its share of the total U.S. ad revenue growing from 12.6% in 2010 to 42.2% in 2019. Local broadcast TV, meanwhile, have seen their share of total ad revenue drop to 7.1% in 2019. In addition, those who do spend on TV advertising, also spend on advertising for other platforms.

The division’s stance on these trends, per the affiliates, has been that TV still draws large audiences and has a broad reach, while the other media outlets are complementary, not substitutes, for broadcast TV advertising. This does not account for the technological shifts and changes in viewing patterns currently taking place, the affiliates argue.

Nielsen estimates have shown that the weekly amount of time adults 18 and over spent viewing linear TV fell by 15.5% from 2014-2019; that number is 23.7% for adults age 35-49 and more for adults under the age of 35. The affiliates also claim that cable has long exceeded the broadcast audience, and viewers, especially younger ones, are increasingly consuming video online. Advertisers have reacted accordingly, the affiliates say, and have been pushing ads across multiple platforms.

PLUS: Nielsen: Streaming Media Made Up Quarter of TV Viewing in Q2 2020

“The continued adherence to a market definition that has persisted for more than two decades defies the fundamental changes in consumer and resulting advertiser behavior,” the affiliates said in their letter.

Because of the out-of-date market definition, affiliates say that most transactions between in-market broadcasters will end up being denied or face a prohibitively expensive regulatory review. This would hinder the advantages that these transactions could provide in increasing output, according to the affiliates.

“We therefore respectfully submit that not only are broadcast transactions subjected to an outdated view of the market but that clinging to this anachronistic view has a deleterious impact on local journalism and programming,” the affiliates conclude.

The full letter can be viewed online. 

WASHINGTON—Following a meeting between the Department of Justice and a coalition of state attorney generals on June 26, reports have emerged that Google is expected to have an antitrust lawsuit filed against it in the coming months.

The focus is on Google’s dominance of the digital advertising and search markets, Politico reported.

Among the specific allegations expected to be covered in the suit is that Google has monopolized the advertising technology market, also that the company has taken steps to extend its monopoly over search through contracts with Apple and cellphone makers using the Android operating system that require Google to be the default search engine. Prosecutors are reportedly still discussing if other aspects of Google’s contracts related to search are to be included in the lawsuit.

The Politico report does note that Attorney General William Barr, who did not attend the meeting, has not made a final decision on whether to sue. Nor has the DOJ decided what kind of punishment it would seek.

“While we continue to engage with ongoing investigations, our focus is on creating free products that lower costs for small businesses and help Americans every day,” Google spokesperson Julie Tarallo McAlister said in response to the news.

“There is an obvious antitrust case to be made against Google and we have the receipts,” said Laura Bassett, former senior politics reporter at HuffPost and co-founder of Save Journalism Project in a separate press release. “While the tech behemoth makes obscene profits, news publishers and smaller competitors are faltering. With its anti competitive actions, Google is a parasite sucking life out of news outlets. It’s unilateral actions on AMP, 3PC phase out and Incognito Mode actively harm publishers. If the DOJ can’t bring Google to heel, there won’t be anybody left to write the story.”

WASHINGTON—A federal grand jury has indicted eight people for running an illegal streaming service that allowed its paying subscribers to pilfer “tens of thousands of copyrighted episodes without authorization.”

The indictment, filed in the eastern district of Virginia, charged the employees of “Jetflix”—a Las Vegas online subscription-based operation that permitted users to stream, and at times, download copyrighted television programs—of violating copyrights. At one point, according to the indictment, Jetflix claimed to have more than 183,200 different television episodes.

One of the defendants, Darryl Julius Polo (aka “djppimp”) left Jetflix to start a rival, “IStreamItAll” (ISIA), also based in Las Vegas. That service, which stored up to nearly 116,000 different TV episodes and more than 10,000 movies, used a server in Canada to avoid detection.

Jetflix apparently stole its content from pirate sites worldwide, including some of the world’s largest torrent and Usenet P2P sites, specializing in stolen material like Pirate Bay, RARBG and Torrentz. They use various computer scripts, often providing episodes to subscribers the day after the shows aired on television. Some of the movies aired on ISIA—which had monthly subscription plans starting at $19.99 per month—were made available even before public release.

The two services allowed subscribers to stream content on any digital device, including smartphones, tablets, web sites and gaming consoles.

In addition to the multiple counts of copyright infringement, another of the eight defendants, Kistopher Lee Dallmann, was also indicted on four counts of money laundering.

WASHINGTON—How people watch TV has dramatically changed in recent years, but in the view of some broadcasters, their means of utilizing the evolving marketplace hasn’t kept up with the times, specifically when it comes to advertising. This was a point of topic during the Competition in Television and Digital Advertising Workshop that was hosted by the Department of Justice on May 2 and 3.

“DOJ has the same view of the broadcast TV marketplace today as it did in the 1970s, 80s and 90s,” said Rick Kaplan, NAB executive vice president of Legal and Regulatory Affairs, in his testimony. “Never mind that cable and satellite providers now offer hundreds of channels of high-quality content. Never mind that the internet has thoroughly upended the way consumers access and engage with video offerings.”

Broadcast company TEGNA’s CEO Dave Lougee echoed these thoughts in his own testimony. Referencing how his 19-year-old son watches most of his content through his mobile device, he points out that viewing style is gaining in popularity with not just people of his son’s age, but all ages as it becomes more readily available.

“Advertisers over digital platforms now show ads that look exactly like traditional TV ads, over platforms that are growing viewership rapidly and enjoy extremely broad reach, along with the ability to focus on particular locations or other characteristics,” said Lougee. “These ads are powerfully competitive with over-the-air broadcast ads in the local ad market. And this competition will only grow.”

Kaplan argues that the DOJ’s reasoning for not updating the reach that broadcasters have is no longer adequate. Elements of what gives broadcast advertising an advantage—a combination of sight, sound and motion; a greater reach; and the value of brand awareness—are not unique to broadcast anymore. When it comes specifically to digital, DOJ has made the argument that digital ads are different from broadcast because they can be skipped, minimized or blocked.

“I will let you in on a little secret: you can also do those things with broadcast TV,” Kaplan explained. “It’s called grabbing a snack from the fridge, disappearing to the bathroom, or even just hitting ‘fast forward’ on your DVR remote. In fact, in most cases, it is harder to do an end-around a digital ad, because often you can’t even get to the highly-desired content without first playing one or more advertisements.”

Ultimately, Kaplan states, broadcasters need to be able to have access to this wider world of advertising revenues so they “can meet their obligations and commitments to cities and towns across the nation.”

WASHINGTON—The Department of Justice is scheduled to host the Competition in Television and Digital Advertising Workshop, a two-day public workshop starting Thursday, May 2, that will examine industry dynamics in media advertising and the implications for antitrust enforcement and policy, specifically related to online and television advertising.

The main crux of the agenda looks to explore the practical considerations that industry participants face and the competitive impact of technological developments such as digital and targeted advertising in media markets. Four panels will examine topics that include television advertising; internet and mobile advertising; the competitive dynamics in media advertising; and trends and predictions for advertising generally.

Featured speakers will include opening remarks from Assistant Attorney General for Antitrust Makan Delrahim and panelists that include Pat LaPlatney, president and co-CEO of Gray Television; Mark Lieberman, president and CEO of Viamedia; Greg Stuart, CEO of Mobile Marketing Association; Rick Kaplan, general counsel for NAB; and Chris Ripley, CEO Sinclair Broadcast Group.

The workshop, which runs May 2, 1:30-5:30 p.m., to May 3, 9:30 a.m.-1 p.m., is free and open to the public. It will be held in the Anne K. Bingaman Auditorium and Lecture Hall in the Liberty Square Building in D.C.

Though free, attendees are encouraged to register for each day by emailing ATR.AdvRegInfo@USDOJ.GOV.

WASHINGTON—The proposed AT&T-Time Warner merger has a new obstacle to face before it can be approved, as the Department of Justice has officially filed suit to block AT&T’s $85 billion bid for Time Warner. The DOJ says that the combined company would hinder rivals from distributing its content and slow industry innovation. AT&T denies these claims and is ready to challenge the DOJ’s suit; a hearing is expected to be requested as soon as possible.

Read the full story on TVT’s sister publication B&C.