US vs. Google
The Justice Department claims the search giant abused its power.
This morning’s episode of The Daily, “U.S. v. Google,” is a fascinating preview of a lawsuit that I was somehow unaware was underway, claiming that the tech behemoth not only has a monopoly on search but is illegally abusing that power. It features Dave McCabe and expands on an article he co-reported with Cecilia Kang last week in the NYT headlined, “In Its First Monopoly Trial of Modern Internet Era, U.S. Sets Sights on Google.”
The Justice Department has spent three years over two presidential administrations building the case that Google illegally abused its power over online search to throttle competition. To defend itself, Google has enlisted hundreds of employees and three powerful law firms and spent millions of dollars on legal fees and lobbyists.
On Tuesday, a judge in U.S. District Court for the District of Columbia will begin considering their arguments at a trial that cuts to the heart of a long-simmering question: Did today’s tech giants become dominant by breaking the law?
The case — U.S. et al. v. Google — is the federal government’s first monopoly trial of the modern internet era, as a generation of tech companies has come to wield immense influence over commerce, information, public discourse, entertainment and labor. The trial moves the antitrust battle against those companies to a new phase, shifting from challenging their mergers and acquisitions to more deeply examining the businesses that thrust them into power.
Such a consequential case over tech power has not unfolded since the Justice Department took Microsoft to court in 1998 for antitrust violations. But since then, companies like Google, Apple, Amazon and Meta, which owns Facebook and Instagram, have woven themselves into people’s lives to an even greater degree. Any ruling from the trial could have broad ripple effects, slowing down or potentially dismantling the largest internet companies after decades of unbridled growth.
The stakes are particularly high for Google, the Silicon Valley company founded in 1998, which grew into a $1.7 trillion giant by becoming the first place people turned to online to search the web. The government has said in its complaint that it wants Google to change its monopolistic business practices, potentially pay damages and restructure itself.
“This is a pivotal case and a moment to create precedents for these new platforms that lend themselves to real and durable market power,” said Laura Phillips-Sawyer, who teaches antitrust law at the University of Georgia School of Law.
The case centers on whether Google illegally cemented its dominance and squashed competition by paying Apple and other companies to make its internet search engine the default on the iPhone as well as on other devices and platforms.
In legal filings, the Justice Department has argued that Google maintained a monopoly through such agreements, making it harder for consumers to use other search engines. Google has said that its deals with Apple and others were not exclusive and that consumers could alter the default settings on their devices to choose alternative search engines.
Google has amassed 90 percent of the search engine market in the United States and 91 percent globally, according to Similarweb, a data analysis firm.
This case troubles me in a number of ways. First, while Google is clearly far and away the dominant search engine—as McCabe points out, its name has long since become a verb—it’s rather dubious that it has monopoly power. Microsoft’s Bing and Yahoo are both well-resourced alternatives, along with minor competitors like DuckDuckGo. Second, if it’s illegal to enter into a contract with Apple and Android to make Google the default search engine, then haven’t Apple and Android broken the law, too? Third, and most importantly, it seems outrageous to me that the weight of the Justice Department is being used to charge illegal conduct on a novel theory. If we won’t know whether Google’s actions were illegal until after a judge spends ten weeks hearing arguments, how in the hell was Google supposed to know whether their actions were illegal?
Rivals have long accused Google of brandishing its power in search to suppress competitors’ links to travel, restaurant reviews and maps, while giving greater prominence to its own content. Those complaints brought scrutiny from regulators, though little action was taken.
Here, I think the complaints have merit. That’s clearly an abuse of a dominant market position that harms competitors and in a manner likely invisible to the average user of the product.
In 2019, under President Donald J. Trump, the Justice Department and the Federal Trade Commission decided to mount new antitrust investigations into tech companies as part of a broad crackdown. The Justice Department agreed to oversee inquiries into Apple and Google.
In October 2020, the government sued Google for abusing its dominance in online search. In its lawsuit, the government accused Google of hurting rivals like Microsoft’s Bing and DuckDuckGo by employing agreements with Apple and other smartphone makers to become the default search engine on their web browsers or be preinstalled on their devices.
But there’s no law against this, right? It’s fairly standard for companies to pay for product placement. And, if I were inclined to prefer Bing, Yahoo, DuckDuckGo, or the like instead of Google, I could change that setting in very little time. Indeed, it’s easier to do that than it is to download Google Chrome onto my iPhone and make it, rather than Apple’s Safari, my default browser. Ditto installing Google Maps when Apple’s inferior (but less so than it used to be) Maps comes pre-installed.
“Two decades ago, Google became the darling of Silicon Valley as a scrappy start-up with an innovative way to search the emerging internet,” the Justice Department said in its lawsuit. “That Google is long gone.”
Google’s actions had harmed consumers and stifled competition, the agency said, and could affect the future technological landscape as the company positioned itself to control “emerging channels” for search distribution. The agency added that Google had behaved similarly to Microsoft in the 1990s, when the software giant made its own web browser the default on the Windows operating system, crushing competitors.
I’m still baffled by the notion that Microsoft did anything wrong by making Internet Explorer the default browser. Again, Apple does the same thing with its MacBooks and iPhones and I’ve managed to switch to my preferred products easily enough. And, indeed, while I used Internet Explorer quite a bit, I switched to Mozilla’s Firefox and then Google’s Chrome a very long time ago with little difficulty.
For decades, judges have generally ruled against companies in antitrust cases only when their conduct hurts consumers, particularly if they have raised prices. Critics have said that lets companies like Google — which provides internet search for free — off the hook.
Google’s Mr. Walker said the case was a moment for the court to double down on that standard.
“American law should be about promoting benefits for consumers,” he said, adding: “If we move away from that and make it harder for companies to provide great goods and services for consumers, that’s going to be bad for everyone.”
Ultimately, the Google trial will test whether antitrust laws written in 1890 to break up sugar, steel and railroad monopolies can still work in today’s economy, said Rebecca Allensworth, a professor at Vanderbilt University’s law school.
“The Google trial is a big test for the government’s entire antitrust agenda because its theory of monopolization is very much in play with many big tech companies,” she said.
I’m persuadable that the old standard is outdated in a world where the customer is actually the product. But here’s a novel idea: Change. The. Damn. Law.
The Sherman Act, passed in 1890, and the Federal Trade Commission Act and the Clayton Act, both passed in 1914, comprise the core of US anti-trust law. There have been subsequent tweaks, notably the Robinson-Patman Act of 1936 and the Hart-Scott-Rodino Antitrust Improvements Act of 1976, but none materially impact this case. It’s probably time for Congress to revisit the concept for the Information Age.
But, again, it’s just baffling to me that we’re spending vast resources to prosecute a novel theory. It’s a core tenet of American law—indeed, the English Common Law from which it was derived—that people should be able to know whether their actions are illegal at the time they’re taken.