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Google's trial antitrust probe from government agencies expands in search, Android business

WASHINGTON – The 50 attorneys generally investigating Google are preparing to extend their antitrust probe beyond the company's advertising business to delve deeper into their search and Android businesses, people familiar with the matter say on CNBC.

Development comes as politicians on both sides of the aisle, including President Donald Trump, increasingly diverge in the Silicon Valley. Meanwhile, Democratic presidential candidate Senator Elizabeth Warren has called for big tech companies to be broken.

Attorneys general – representing the 48 states, Puerto Rico and Washington, DC – will make calls known as requests for civil investigations, or the CID, to support inquiries, people said.

So far, the investigation has specifically targeted the Google advertising business.

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

The state has already provided Google CID for more information related to the advertising business of the company.

But at a recent meeting of several attorneys general, participating in the probe, Paxton expressed his support for expanding the probe into Google search and the Android business. Other countries will conduct search and Android investigations separately, people said. It was not clear which states would look at these businesses.

A Texas Attorney General's spokesman, who asked about the scope of the study, commented to CNBC in early October: "At this point, the multilateral investigation is focused solely on online advertising, but, as always, the facts , which we find as the investigation progresses, will determine where the investigation ultimately leads. "

Google declined comment. Prior to the announcement of Paxton's study in September, Google's senior vice president for global affairs, Kent Walker, wrote a blog post saying the company would cooperate with government investigations.

Investigative developments states that states and their attorneys intend to look at the technical conglomerate, said people familiar with the matter.

States may be more aggressive in antitrust investigations than federal ones regulators because they are less constrained by lobbyists and political forces consuming Washington, D.C.

Google's parent, Alphabet, has a market cap of over $ 900 billion, making it one of the largest sources of resources, than the federal government. valuable companies in the world. Because much of its offerings are free to the consumer, it can be difficult to prove antitrust violations, which are usually shown by a clear impact on pricing. The head of the antitrust department, Macan Delrahim, said in public statements that quality, innovation and other factors could be considered.

The DOJ, which conducts Big Tech's own antitrust studies, serves its own CIDs related to "previous antitrust investigations in the United States and elsewhere," Google said in a filing this summer.

Previous federal investigations FTC completed a nearly two-year investigation into Google in 201

3, which ended with an agreement in which Google said it would remove restrictions on its advertising platform to make it easier for advertisers to run campaigns on competitive platforms In 2010, the government closed an investigation into its acquisition of an AdMob mobile ad company, concluding that the deal is unlikely to hurt competition in mobile advertising.

But recently, politicians on both sides of the aisle is a new Big Tech spotlight Warren, who is one of the Democrats' leading Democratic candidates, has promised to break the Silicon Valley giants. Trump, a Republican, tweeted in August without evidence that Google had "manipulated" the election vote in 2016.

Search is the heart of Google's business, through which Google collects both advertising revenue and data. In addition, critics say, it uses the function to promote its own products and services. The internet giant has introduced a number of features over the past few years, such as reviews, maps and travel that take advantage of internet traffic. The EU hit Google with a $ 2.7 billion fine in 2017 to provide favorable treatment to its Google Shopping service. Google appealed the decision.

However, this fine did not delay Google's expansion of new proposals.

Google's Android mobile operating system, meanwhile, is its mainstay in the mobile market. Google requires phone and tablet makers using Android to pre-install the Google app store and other apps like Gmail, Google Maps and the Chrome Web browser, putting competitive services at a disadvantage. Approximately 80% of smart mobile devices run on Android, according to the European Commission.

After a record $ 5 billion fine from EU antitrust abusers on Android, Google said it would allow EU users to choose their default search engine when setting up their Android device and stop grouping their apps on Android phones.

With this experience, attorneys general investigating Google may already have a broad view of the case they want to pursue against Google. They will use their CID requests to search for materials such as emails and strategy documents to support this view, while seeking evidence of clear anti-competitive behavior. Requests can be a means of filling in the gaps in the evidence or a tactic to pressure a company in the hope of a forced settlement.

Sometimes, investigations and requests can dig up incriminating material. A previous FTC investigation into Google search practices found evidence that it had distorted the results in favor of its own products, according to documents that were inadvertently provided to The Wall Street Journal in 2015.

Google is already pushing for the first Texas CID request. The company filed an injunction against Texas seeking protection against disclosure of certain confidential information requested. Google said it was worried that outside consultants who led the investigation had links to Microsoft and could use confidential information to assist its rivals.

Lauren Feynor reports from CNBC Headquarters in Englewood Cliffs, N. J.

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