It is claimed that U.S. antitrust enforcers are crafting a complaint against Google (and its parent company, Alphabet). This week, the Justice Department and a broad group of state attorneys general are meeting and could file suit very soon. While it would allegedly concentrate on the dominance of Google in online advertisement and search, the lawsuit may cover many other aspects of the actions of Google, including its dominance in mobile operating systems and web browsers. After the DOJ's 1998 suit against Microsoft, this suit has the potential to be the most important antitrust case against a technology firm in over 20 years.
In other words, almost all Internet users have a stake in the results of this case, all users of Google Apps, and anyone who watches Google-brokered ads. That's why it has to be performed correctly. It should cover more than just advertisement markets and also concentrate on the consumer strength of Google's search, browser, and smartphone OS. And the antitrust authorities should seek intelligent solutions that go beyond money harm, including breakups and interoperability with competing goods, all while being vigilant in protecting the interests of free expression and privacy of consumers that will eventually be caught up in the mix. Like many, we worry that it might not go well if everything is hurried, so we advise the enforcers to take the time they need to do it right while understanding that there is continual harm.
The Significance of a “Big Case” Antitrust
U.S. government antitrust cases have an important place in the history of innovation, and there is a fair argument to be made that they provided breathing space for innovation even though they did not conclude with a court order to break up a company. The DOJ's case against IBM started in 1969, went to trial in 1975, and was withdrawn in 1982, for "monopolizing or threatening to monopolize the general-purpose market for electronic digital computer systems." While the case did not end with a court-ordered remedy, as it had squashed other rivals for decades, a decade-plus of a public investigation into IBM's business practices arguably stopped the company from squashing nascent rivals like Microsoft. That outcome probably helped start the 1980s personal computer revolution, fuelled by various companies' ideas beyond "Big Blue."
The government's suit against AT&T, which had for much of the twentieth century maintained a legally recognized monopoly on telephone service in the U.S., almost ended the same way as the IBM suit. US v. AT&T was filed in 1974 and by 1982 it had not reached a verdict. "But years of scrutiny, coupled with the emergence of potential rivals who were itching to enter telecommunications service and related markets, led the leadership of AT&T to consent to a split, allowing the" Baby Bells "and technology-focused spinoffs to innovate in data communications and Internet growth in ways that" Ma Bell "could not. With a monolithic AT&T still controlling who could link to telephone networks and what devices they could use, it is difficult to foresee the Internet entering mainstream use in the 1990s. Even though the AT&T heirs finally re-assembled themselves, we still have the creativity unleashed by the split.
Also, a boon to creativity was the 1998 lawsuit against Microsoft over its exclusion of rival Web browser applications from PCs. At the time, Microsoft's AT&T-style merger, perhaps breaking its operating system and software application divisions into different businesses, was a distinct possibility. The trial court actually ordered exactly that. D.C. On appeal, Instead, Circuit opposed a split and directed Microsoft to comply with existing restrictions on its conduct against rival software vendors and PC producers. Again, this appeared to be anything less than a shining accomplishment. But Microsoft shelved plans to smash a little-known search firm called Google in the face of ongoing surveillance of its actions against competitors.
Google grew into so many Internet-related markets two decades later that its place in many of them remains unassailable. Google has been able to buy out or push out almost any company that dares to compete in a number of markets with it. Once again, the engine of disruptive innovation has broken down, and a brave, thoughtful federal and state enforcers' antitrust challenge could be just the thing to help restart it.
Look at the entire Alphabet, not just advertisements
Look at the whole alphabet, not just ads. News reports indicate that Google's litigation will concentrate on the domination of web advertising by the corporation, which is alleged to depress publishers' ad revenues. The suit may also discuss the behavior of Google against rivals in search markets, such as travel and search for goods. In order to see how it contributed to the acquisition of monopoly control in different markets, it should also look at Google's history of mergers and acquisitions, such as the 2007 purchase of advertising company DoubleClick.
Antitrust enforcers will go high on the reach of the complaint. Consumers will not benefit much from a suit that questions Google's actions in the advertisement markets alone. Although the vast collection of Google data on the browsing habits and preferences of users, extracted from its ad networks, causes great harm to customers, it is not yet clear if hundreds of smaller rivals in the ad-tech market, some of which are extremely shady, would be better user privacy stewards. The response here includes both antitrust and much-needed new regulations on privacy. That's going to assist customers around the board.
Google's leveraging of its current market dominance in search, Web browsing (Chrome), and mobile operating systems (Android) should also be questioned by the DOJ and states to keep out competition. The lawsuit should also question whether the collection and control of user data by Google through so many applications and computers, plus data from millions of websites linked to Google's advertisement networks, gives it an advantage that causes anti-trust scrutiny in other markets. These are, in part, novel and challenging antitrust law arguments. Yet enforcers are expected to target hard. Success in keeping Google responsible for its use of monopoly power can help the courts and probably Congress adjust antitrust law for the digital era, even if it does not succeed entirely. It can also help create a bulwark against the Internet's further centralization. And as history indicates, even a suit that eventually does not lead to a split will help make room for creativity outside the walls of today's tech giant from different outlets.
Have a large remedies toolbox: interoperability, innovation follow-on, laws of conduct, and breakups
By now, it is clear that antitrust law enforcers ought to seek solutions beyond money damages. Without altering their actions drastically, Google and Alphabet are big enough to treat almost every fine as a cost of doing business. As part of the litigation, a court-ordered breakup of Alphabet could also be seriously considered, perhaps an order to separate parts of Google's advertising company or to unravel Google's most controversial acquisitions.
In the government's quiver of solutions, however, breakups should not be the only bolt. Asking Google to allow its rivals to create interoperable goods would strike at the root of Google's monopoly issue and could be an easier lift. As we've seen across several examples, building products that can link to current, dominant products, without permission from the incumbent vendor, can be a powerful antimonopoly tool. It can help bring users back into power.
That may mean ordering Google not to interfere with products that block Google-distributed advertising and monitoring in Google's case. Allowing ad- and tracker-blocking technology to thrive will allow consumers to shape the ad-tech industry by supporting businesses that obtain less user information and are more accountable for the information they have. It could also promote innovation in that market (note: one of those innovations is the Privacy Badger of the EFF, but this could benefit several services). Google will have to fight for users' views and clicks in that case by protecting their privacy.
Interoperability requirements implemented as an antitrust remedy or as part of a settlement mitigate many of the concerns that come with more generalized mandates for technology because orders can be crafted to accommodate the technologies and procedures of a particular organization. To ensure enforcement, it may require constant monitoring and help prevent security concerns or other problems that may occur from a one-size-fits-all approach.
A perfect chance to start solving the issues of the monopoly control of Big Tech is the pending litigation against Google. If enforcers act boldly, they will set new precedents for antitrust that will stimulate competition across high-tech markets. As a spur to progress and a monopoly solution, they should also use this opportunity to advance interoperability.
Who are Google's Lawyers?
Google has had a handful of familiar outside lawyers since the companies have dealt with several antitrust court appearances over the past few years.
In a pending private antitrust lawsuit accusing the search giant of monopolizing the online search advertising market, Google has turned to Wilson Sonsini Goodrich & Rosati. When the department questioned the company's search activities, Wilson Sonsini also helped Google fight off the FTC back in 2011. Without penalizing Google, the FTC closed the case in 2013.
Google is also a client of Paul Weiss, who, during the DOJ's antitrust trial, represented Microsoft for Bill Gates' empire.
For most foreign investigations, including the EU's nearly $ 3 billion antitrust fine accusing the corporation of rigging its search results to benefit its own goods, Google has relied on Cleary Gottlieb Steen & Hamilton LLP. In his almost 13-year antitrust case brought by the DOJ, Cleary also represented IBM Corp. In 1982, the government finally dismissed the lawsuit.
