SAN FRANCISCO: Alphabet Inc's Google division paid billions of dollars to publishers, celebrities and Apple Inc over the last three years, the U.S. Department of Justice said on Monday, as part of an ongoing probe into the internet company's practices.
The probe, disclosed in a securities filing, comes after the government forced Apple Inc to unlock an iPhone used by the gunman in a mass shooting in California. Apple complied, prompting accusations that it was giving into U.S. government demands and raising privacy questions.
A Google spokeswoman, in a statement on Monday, denied it had accepted any payment from the U.S. government or mobile phone makers for mobile software tools, such as its voice assistant or navigation app Waze. She said that the payments were to provide services to consumers.
"Everyone now has more options thanks to Android, not less, the statement claimed. "The traditional indicators of strong competition include a thriving environment, quick invention, and lower pricing."
It was unable to quickly reach a Justice Department official for comment.
The department’s investigation into Google’s practices began more than three years ago, during the tenure of former U.S. Attorney General Loretta Lynch.
The Federal Bureau of Investigation in December 2016 searched the home of a former Android executive and seized data from an Android phone, according to the Justice Department filing.
The filing came in response to a lawsuit that several news organizations filed in June claiming Google requires phone makers to include Google search and Google Play, as well as Google’s YouTube video service, in mobile devices.
As part of the lawsuit, the Justice Department said it is seeking records on Google’s contracts with manufacturers such as Samsung Electronics Co Ltd and Huawei Technologies Co Ltd. It also asked for information about charges manufacturers pay to license Google’s software, data on Google’s sharing of data with device makers, and other information.
The lawsuit was filed in federal court in California.
In a statement, David Drummond, Google's senior legal officer, said, "We will not sit idly by while manufacturers utilise our intellectual property and collect data from users without our consent."
At a conference on Monday, Drummond, who stepped down as Google’s chief business officer earlier this month, declined to say if the government’s probe had impacted Google’s contracts with device manufacturers.
Shares of Alphabet closed up 0.6 percent at $1,145.95.
Nasdaq’s loss dragged the tech-heavy Nasdaq Composite index down more than 1 percent.
Shares of Amazon.com Inc and Netflix Inc each lost 1.9 percent. Shares of Apple were down nearly 2 percent.
By Paresh Dave and Stephen Nellis
(Reuters) - Apple Inc, Alphabet Inc's Google division and two other manufacturers were sued by a coalition of media companies, publishers and advertisers for allegedly agreeing not to buy from other tech firms as part of a scheme to fix prices and unfairly restrict competition in the digital advertising market.
The alleged conspiracy to suppress advertising revenue, discovered by the Department of Justice, stems from purchases of ad space by smartphone and other device makers on Apple's App Store and Google Play, and to exclude ad-funded apps from the stores, according to a complaint filed in federal court in San Francisco on Monday.
The proposed class action filed by the News Media Alliance included nearly two dozen media companies, including The New York Times Co, The Washington Post and Fox Broadcasting Co. Others include Meredith Corp, Propel Media, ATTN: and Gannett Co Inc.
According to the lawsuit, "these talks lasted for more than five years and had an impact on more than $3 billion in digital advertising income."
Google's responsibilities as the largest buyer of online display and search advertising space should have given it leverage in negotiations, the lawsuit said. Instead, Google had employees "go rogue" and secretly agree to the terms, according to the complaint.
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