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Google Antitrust sample expanded by state-owned AGs in search, Android companies



WASHINGTON – The 50 Advocate Generals investigating Google are preparing to expand their antitrust investigations beyond the company's advertising business to delve deeper into the search and Android businesses as politicians on both sides of the aisle , including President Donald Trump, increasingly rejecting Silicon Valley. In the meantime, Democratic presidential candidate Sen. Elizabeth Warren has called for the dissolution of big-tech companies.

Attorneys General representing 48 states, Puerto Rico and Washington, DC, will write summons known as civilian investigative claims, or CIDs, to support investigations, people said. One of the people warned that the subpoena may not be delivered immediately.

So far, the investigation has focused explicitly on the advertising business of Google.

Texas Attorney General Ken Paxton, who heads the investigation, announced the investigation during a September press conference highlighting Google's dominance in the advertising market and the use of consumer data.

The state has already sent Google CIDs for more information about the company's advertising business.

Recently, however, several attorney general Paxton, who participated in the investigation, expressed his support for extending the scope of the investigation to the Google search and Android business. Other states will do the Search and Android research separately, people said. However, it was not clear which states would look at these companies.

A spokesman for the Texas Attorney General who asked about the scope of the investigation, CNBC referred to a comment released in early October: "On this issue, the multi-stage investigation focuses solely on online advertising, but as always, determine the facts that we discover in the course of the investigation, where the investigation ultimately leads. "

Google declined to comment. Prior to Paxton's announcement of the September investigation, Google's senior vice president of global affairs, Kent Walker, wrote a blog post announcing the company's collaboration with government investigations.

The evolution of state investigations shows how inclusive the states are and their Attorney Generals intend to scrutinize the technology conglomerate, the people familiar with the matter said.

States may be more aggressive in antitrust investigations than federal agencies because they are less constrained by the lobbying and political forces that use Washington, DC States are generally more resource-efficient than the federal government, even though states have pledged themselves Sharing resources as part of Google's investigation.

Google's parent company Alphabet has a market capitalization of more than $ 900 billion, making it one of the largest value-added companies in the world. Since many of its offers are free to the user, it may be difficult to prove antitrust violations, which usually translates into a significant impact on pricing. Makan Delrahim, antitrust director of the Ministry of Justice, has publicly stated that quality, innovation and other factors may be considered.

The DOJ, which conducts its own antitrust investigations by Big Tech, has its own CIDs regarding previous antitrust investigations in the US and elsewhere, "Google said in a filing this summer.

Earlier federal investigations against Google ended with a whimper and in 201

3 the FTC completed a nearly two-year investigation from Google culminating in an agreement that Google would lift restrictions on its advertising platform to make it easier for advertisers to manage campaigns across competing platforms . In 2010, the government completed an investigation into the acquisition of the AdMob mobile advertising network and concluded that competition in mobile advertising is unlikely to be affected by the agreement.

More recently, however Politicians on both sides of the aisle poured a new one Spotlight on Big Tech. Warren, one of the leading Democratic presidential candidates, has vowed to crush the giants of Silicon Valley. Trump, a Republican, tweeted in August with no evidence that Google "manipulated" votes in the 2016 election.

Search is at the heart of Google's business, with which Google collects both advertising revenue and data. Critics also argue that they use the function to promote their own products and services. The Internet giant has introduced a number of features in recent years, including ratings, maps and travel deals that benefit from Internet traffic. The EU imposed a $ 2.7 billion fine on Google in 2017 for preferring to treat the Google Shopping service. Google appeals against the decision.

However, this fine has not slowed Google's expansion into new offerings. With the planned acquisition of Fitbit, the company continues to drive healthcare and announced earlier this week that it will offer current accounts as of next year.

Google's mobile Android operating system is now established in the mobile market. Google also requires smartphone and tablet manufacturers using Android to preinstall the Google App Store and other apps, such as Gmail, Google Maps, and the Chrome web browser, thereby penalizing competing services. About 80% of smart mobile devices are running on Android, according to the European Commission.

Following a record $ 5 billion fine by EU regulators for cartel abuse on Android, Google will allow EU users to select their default search engine when setting up their Android device site and stop bundling their apps on Android phones.

With this track record, the Advocates-General investigating Google are likely to have a full picture of what they are trying to do against Google. They will use their CID requests to search for materials such as emails and strategy documents that support this view while seeking evidence of clear anti-competitive behavior. The requests can be used to close gaps in evidence or put pressure on a company to force an agreement.

Sometimes investigations and inquiries can make incriminating material. Google's previous FTC investigation of search practices found that the results were biased in favor of its own products. This is clear from documents that were inadvertently forwarded to the Wall Street Journal in 2015.

Google is already pushing for the first CID request from Texas. The company filed an order against Texas for protection against disclosure of certain requested confidential information. According to Google, there is a concern that external consultants who have been called in to assist in the investigation may maintain contact with Microsoft and use the confidential information to assist competitors.

Lauren Feiner reported from CNBC headquarters in Englewood Cliffs, N.J.


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