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What To Know About The Google Antitrust Case

Filed by the US Department of Justice (DOJ) in October 2020, an antitrust case against Google entered court on September 12. It’s the biggest legal challenge against a tech company since the vaguely successful antitrust action against Microsoft in the 1990s. A behemoth even among Silicon Valley — Big Tech — Google seems to be a prime target for scrutiny at least. But when it comes to actually winning the case, the law and legal precedents actually aren’t in the regulators’ favor.

US v. Google: Overview & Context
For the last 45 years, harm to consumers has been the primary standard for deciding antitrust cases. This is known as the consumer welfare standard. The DOJ’s case against Google is specifically accusing the company of monopolizing the business of online search. It claims that, by influencing or controlling the results that show up on its search page, Google is preventing its business rivals from gaining web traffic. The DOJ has also joined a separate case, filed by the governments of 38 states and territories in the US, which accuses Google of monopolizing search advertising.

So, the crux of both cases is that Google is restricting competition. But previous antitrust cases have failed because while they focused on harm to competition, the prevailing priority in the judiciary has been harm to consumers — particularly via price increases. And sometimes, even that hasn’t been enough: in 2018’s Ohio v. American Express Co., the Supreme Court ruled that to convict American Express of an antitrust violation, the government had to prove that the company’s conduct reduced economic output. The evidence proved that the company had stifled innovation and increased prices, but bizarrely, the court didn’t consider that to be evidence of reduced economic output.

Microsoft In The 1990s, Google In The 2020s
The federal case against Microsoft in the 1990s was similar to the current one against Google: it accused the tech company of dominating the then-small personal computer space. Specifically, the case was about Microsoft restricting the ability of both consumers and other companies to use any software on Microsoft PCs except for Microsoft software. A key example was Internet Explorer, the web browser — which also makes the results of that case against Microsoft an important precedent for the current case against Google. A major factor in this case is Google’s status as the default search engine used by highly popular web browsing apps like Apple’s Safari.

The Microsoft case was only partly successful. The settlement that Microsoft reached with the federal government in 2001 left Microsoft with much more power than other options that the prosecutors pushed for, such as breaking up the company. Additionally, several recent antitrust cases filed by the federal government have failed, including a recent one against Microsoft’s acquisition of game developer Activision.

The Political Impact of Antitrust Litigation
However, the thinking among regulators seems to be that there are advantages to be had from filing these lawsuits, even if they lose in the official sense.
Businesses will become more circumspect in their dealings, knowing now that the government is watching more closely and will take action — action which could tie up their resources in lengthy, costly litigation, disrupting their profit streams.
More pressure is put on Congress to pass antitrust legislation as the public becomes more supportive of such government intervention, and less tolerant of Congressional inaction on the issue.
Regulators in the European Union will know that they can count on more support from the US government than they used to be able to. The EU has been fiercer against monopolization than the US government for the last couple of decades — including in the early 2000s, when, right about the time that the US case against Microsoft closed, the EU imposed a significantly harsher punishment in its own case against the company.

So as these two antitrust cases against Google play out, whether or not the federal government wins in the official, legal sense, they may still win in a political sense. And the repetition of such ‘victories’ may eventually bring to bear enough pressure to successfully change the tenor and words of antitrust law and legal precedent — making official, legal victories easier in the future.

Edited by: Mariyam Qureshi

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Tags: #BigTech #antitrust


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