Google antitrust case centers on consumer choice and how rivals get boxed out

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WASHINGTON POST: The Justice Department’s lawsuit against certain Google business practices is a case unlike any the country has seen in nearly two decades — and could cause ripple effects for generations for Internet users and smaller web companies. 

But first, the government must prove its case against the tech giant, which operates some of the most widely used services on the Internet today. Google on Tuesday called the suit “deeply flawed” and said it wouldn’t help consumers. Some experts say that is a short-term view that doesn’t take into account future growth from smaller companies that could be fostered by changes to Google’s business practices.

What does the suit actually say?

The Justice Department is taking a fairly narrow view of antitrust issues against Google, lawyers and experts say. It basically alleges that aspects of Google’s contracts with other companies — such as Apple, LG and Motorola — are exclusionary and serve to reinforce Google’s dominance in search at the expense of rivals.

Google pays companies like Apple to prioritize its search engine on iPhones and other devices. It’s often possible to remove Google as the default search engine, but many people don’t bother to do so. Google says that is because people prefer to use its services. But in the lawsuit, regulators allege Google relied on a mix of special agreements and other problematic practices to grow to its current dominant position, where it controls about 90 percent of mobile search questions in the country.

“I think what the Justice Department is trying to say is that we have no problem with an innovator becoming successful and having a significant market share,” said Bill Baer, a visiting fellow at the Brookings Institution who led the antitrust division of the Justice Department from 2013 to 2016. “But we do have a problem where you grease the ladder of success so no one else can climb up it.”

What does this mean for everyday Google users?

In the short term, not much. The legal battle will likely wage for years, and even though a breakup of Google is on the table, it so far does not seem to be the most likely outcome, said Herb Hovenkamp, an antitrust professor at the University of Pennsylvania Law School.

People can continue using Google as normal and can expect to see the same results and ads as they usually do. What it might mean in the longer term is more search options on mobile. Device makers might need to add a setup option that allows people to designate their default search engine, similar to what is required in the European Union, for example, Hovenkamp said.

In a blog post defending the company on Tuesday, Google chief legal officer Kent Walker said people prefer using Google.

“The bigger point is that people don’t use Google because they have to, they use it because they choose to,” he wrote.

By restricting competition in search, Google has left consumers with fewer choices and stifled innovation in the market, the Justice Department alleges. That has reduced the general quality of search engines, potentially opening the door to negative impacts on people’s privacy because people are forced to accept Google’s rules, it says.

That could mean that if rivals — including Microsoft’s Bing and privacy-focused search company DuckDuckGo — were given a stronger shot at the market, more innovations in search could pop up in the longer term.

“It could happen that everybody returns to Google anyway,” said William Kovacic, the former chairman of the Federal Trade Commission, who is now a professor of law at George Washington University. “Are we all going to just return to the familiar provider? Or is that going to open up possibilities for others to be bolder and inventive?”

Why is DOJ doing this now after years of inaction?

Washington has largely taken a hands-off approach to regulating the tech industry over the past two decades, as Silicon Valley companies were largely celebrated by policymakers and seen as scrappy upstarts. But that perception has dramatically changed.

“That Google is long gone,” the lawsuit says. “The Google of today is a monopoly gatekeeper for the Internet, and one of the wealthiest companies on the planet, with a market value of $1 trillion and annual revenue exceeding $160 billion.”

The lawsuit reflects a growing bipartisan perception that the tech industry has grown too powerful. For more than a year, the department has been probing competition in the tech industry, and the House Judiciary antitrust subcommittee has been conducting its own parallel investigation into Silicon Valley’s power.

Advocates for greater antitrust enforcement view the lawsuit as a turning point in these efforts.

“This lawsuit’s filing is an indication of the end of the beginning,” said David Dinielli, a senior adviser at the Omidyar Network, which was started by the eBay founder and has advocated for greater antitrust scrutiny of Silicon Valley. “We’ve been in a period of awakening about technology and its dominance. I view this lawsuit that this awakening period is ending, and we’re entering a phase of action.”
Others say the government could no longer ignore mounting criticism that it had been too hands-off in its treatment of Big Tech.

“I think there has been a real effect in the policymaking environment of the intense criticism that government has been too risk averse and has run away from cases instead of seizing them,” said Kovacic. “I think it took awhile to sink in.”

Another reason is Google itself, and its enormous growth over the past decade.

“Government’s understanding of the steps Google has taken to build a wall around its monopoly position were not apparent five years ago and have only become apparent in the last couple of years,” Baer said.

Does this have anything to do with the election?

It’s hard to ignore the fact that the lawsuit comes two weeks to the day before the 2020 presidential election and only Republican state attorneys general have signed on.

Some experts say it’s possible that the Trump administration is bringing the case now because they’re concerned that the clock is running out on the president’s term, and officials may want to ensure it’s filed in the event that Trump is not reelected. 

“I don’t think it’s unusual for an antitrust enforcer to bring a case before their term could potentially end,” said Sally Hubbard, director of enforcement strategy at the Open Markets Institute, an organization backed by groups that advocate for breaking up Big Tech. “If you’ve been working on a case, you don’t have any control over what the next administration does. If you want that case filed, you better file it before you get replaced.”

What would happen to the lawsuit if Joe Biden is elected president?

It remains unclear how a potential Democratic administration would approach the lawsuit against Google. Democrats have broadly been supportive of greater antitrust scrutiny of the tech industry, though Joe Biden did not go as far as liberal Democrats in the primary election who called for tech giants to be broken up.


The Biden campaign said it would work closely with outside experts, including Democratic lawmakers who led the House antitrust investigation. “While we will not comment on specific lawsuits and companies, Vice President Biden has long said that one of the greatest sins is the abuse of power,” campaign spokesman Bill Russo said. “And growing economic concentration and monopoly power in our nation today threatens our American values of competition, choice, and shared prosperity.”

No Democratic state attorneys general signed on to the lawsuit, which The Washington Post has previously reported may reflect a cautious approach so close to Election Day.

However, some of Attorney General William P. Barr’s top critics on the left said they support the lawsuit.

“Two things can both be true: William P. Barr is a corrupt Trump crony who shouldn’t be AG, and [The Justice Department] has the power to pursue a legit antitrust suit against Google,” Sen. Elizabeth Warren (D-Mass.) said in a tweet. “The case is clear — in fact, it could have gone further. It must move forward without political interference.”

Rep. David N. Cicilline, (R.I.) the chair of the House Judiciary antitrust subcommittee, called the lawsuit “long overdue.”

“It is time to restore competition online,” he tweeted.

How does this differ from other antitrust moves that DOJ has made?

The lawsuit is widely seen as U.S. regulators’ most significant effort to address monopoly power in the tech industry in a generation.

“There is a consensus that this is the most important monopolization claim since the case against Microsoft, which was filed in 1998,” Dinielli said.

It’s relatively rare for the Justice Department to bring monopolization claims against major U.S. companies, compared to price-fixing charges or efforts to review mergers, Dinielli said. The case is also significant because it has the backing of eleven Republican state attorneys general, who have also been investigating Google’s power.

The lawsuit urges the court to consider “structural relief,” which could potentially require Google to sell off a portion of its business or cease certain business practices that antitrust enforcers determine are problematic. That’s significant because previous efforts to fine tech companies for bad behavior have had little impact because they have such deep cash reserves. European regulators have fined Google more than $9 billion for violating anti-competition laws in recent years.

The case also builds on the landmark Microsoft case from nearly two decades ago.

“In a lot of ways, they’re very much trying to build the case on the framework established by the Microsoft litigation,” said Kovacic. “In some ways this is Microsoft redux.”

How long is this going to take?

Probably years, unless the company and the government reach a settlement agreement early on.

Google did not immediately say if it would file to dismiss the lawsuit or what its first legal step would be. But experts have a guess.

“Google’s resources are so tremendous that its number one strategy will be delaying,” Hubbard said.

Regulators have struggled to move quickly enough to rein in tech giants in the fast-changing tech industry. Much of the Justice Department’s case focuses on how Google has leveraged its Android operating system and vast scale to maintain dominance in mobile search. But consumer advocates were also encouraged to see that the case took a forward-looking lens, and also warned of Google making similar moves to become dominant in emerging technologies, such as voice recognition.

“We can’t just be looking at what they did to monopolize search on mobile, we need to be looking at what they’re going to be doing to monopolize wearables and (Internet of Things) and cars and everything else,” Hubbard said.


What effect might it have on companies that compete with Google?

Rivals, including a prominent position from restaurant review site Yelp, have long taken issue with Google’s overall dominance online, saying they get boxed out of premium search positions or get stifled before they really have a chance to grow.

Depending on how the suit finally resolves, search rivals could potentially get more runway to try new things because they wouldn’t have to compete so heavily with Google’s vast cash resources to get noticed.

“Google’s anticompetitive practices are especially pernicious because they deny rivals scale to compete effectively,” the lawsuit says.

Walker wrote that Google faces many strong competitors. “But let’s be clear — our competitors are readily available too, if you want to use them,” he wrote.

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