On October 20th, the Justice Department filed an
antitrust lawsuit in the Federal District Court (District of Columbia) against
Google focusing on its purportedly predatory practices relating to its
search and search advertising platforms. “The DOJ argues that
Google has entered into exclusionary contracts with phone makers to preload its
search engine onto devices using Alphabet’s Android operating system.
“Those contracts have allowed Google to maintain a monopoly
while stifling competition and innovation, the suit contends. It also accuses
Google of using profits from that monopoly to buy preferential treatment for
its search engine on web browsers, including Safari… Estimates of Google’s
control of the market for online searches range from 80 percent to 90
percent, resulting in tens of billions of dollars in annual revenue.”
TheHill.com, October 20th. Google has, likewise, been in the
antitrust headlights of the European Union as well.
Why the rush to file such a massive lawsuit right before the
election? Was it an attempt to find common ground with the Democrats? An effort
to unite against a perceived common enemy? Or was the administration trying to
pretend that Joe Biden was so in the pockets of “liberal social media” that he
could not be trusted to fight the big fight later? Attacking a big corporation
seems more like a progressive, hardly a Republican effort. And could the fact
that it is the Trump administration filing the lawsuit potentially work
in Google’s favor?
“Matt Stoller, the research director at the
American Economic Liberties Project, said on Wednesday [10/21] that the
Department of Justice’s (DOJ) antitrust case against Google is ‘not partisan.’ ...
Stoller told Hill.TV’s ‘Rising’ that Attorney General William Barr is
trying to get the lawsuit out before the election, and said it’s the ‘most
interesting thing happening in the administration so far.’
“‘This is not a partisan cheap shot. There
probably is a little bit of electoral ramifications here, or at least he might
think that,’ Stoller said, referring to Barr. ‘But largely it’s just ‘I want to
get this out before Biden people come in and try to squash it.’ … Stoller
also called the charges a ‘huge deal,’ adding that they were ‘massive’ both
ideologically and politically… ‘You have the Trump administration---a
right-wing Republican administration--trying to break up a trillion dollar
company,’ Stoller said. ‘That is a huge deal because we haven’t seen that in
decades.’” TheHill.com, October 21st. The lawsuit currently
does not seek to break Google into component pieces, a remedy that could easily
be added later.
Writing for the October 21st Los
Angeles Times, Michael Hiltzik digs deeper into the differences between the
Republican’s and Democrat’s perspective on this litigation, knowing that
everybody simply agrees that Google is just too damned big for its britches. “Their [bipartisan] accord has limits,
however — Democrats favor breaking up the company, but that’s not an explicit
goal of the lawsuit… That said, for the moment the stars seem to be aligned.
After the Justice Department filed its case, New York [State] Atty. Gen.
Letitia James cited the ‘good working relationship’ she and other Democratic
attorneys general have with the [federal] Justice Department on their ‘separate
but parallel’ investigations of Google.
“As much as Google’s other critics
might wish to applaud the Trump administration’s aggressive stance against
Google, there’s reason to be concerned about the prospect that the lawsuit is
clouded by Trump himself… Trump has waged a long rhetorical campaign against
Google and other online companies, accusing them — implausibly — of ‘censoring’
conservative viewpoints.
“Atty. Gen. William Barr, in a June
21 interview on Fox News , directly tied accusations of censorship to the
administration’s concerns about the ‘concentration of these very large
companies that have that kind of influence on the sharing of information and
viewpoints on our society.’
“Senior members of the Justice
Department have been reported to be upset at the apparent haste to file the
Google lawsuit before the election, on the theory that the brandishing of a
legal stick against Google might win Trump votes… Trump’s public determination
to punish companies such as Google can’t help but undermine the legal
rationales embedded in the Justice Department complaint, which is said to be
the result of more than a year of investigation…
“[Search] engines rely on user
queries to build their effectiveness and reliability, so Google’s enormous
footprint effectively keeps would-be rivals from building up their own systems.
That produces ‘continuous and self-reinforcing monopolies in multiple markets,’
the Justice Department says… Google protects those monopolies by cutting
exclusive deals with computer and mobile hardware makers such as Apple, whose
operating systems compete with Google’s Android, with hardware makers seeking
to license Android for their own products, and with wireless carriers and
browser designers.
“For years, the Justice Department
says, Google has contracted with Apple to set its search engine as the default
for Apple’s Safari browser, iPhones and iPads. Naturally, its search engine is
the default for Android mobile phones, and for Google’s own Chrome browser, the
most popular web browser for computer and mobile users.
“As everyone in the consumer tech
industry knows, inertia is a powerful factor — customers almost never bother to
change the default settings that come with their devices. That makes dislodging
Google as the search engine of choice a daunting task indeed… Google has used
its dominance in search to acquire a dominant position in search page
advertising, the lawsuit asserts. The same phenomenon is at work in advertising
as it is in search — the larger the footprint, the greater the appeal to
customers.
“Google’s search ads ‘have become a
‘must have’ for many advertisers,’ the Justice Department says. ‘But users do
not benefit’ to the same extent. In fact, their privacy may be compromised by
Google’s ability to exploit their personal information, including their
searches, to feed them ads thought to be personally appealing.”
Given the virtually unlimited
financial resources available to Google, almost an infinite ability to use
legions of lawyers to pummel the DOJ at every turn which requires an in-kind
DOJ response, we can expect legal fees to escalate into the tens if not
hundreds of millions of dollars on each side… or maybe even more. Google has easily
absorbed mega-billion-dollar fines from the European Union, and it
should be able to drag this process through the US judicial system for years.
Don’t be surprised if Google’s efforts result simply in a large fine-based
settlement, a few token agreements to increase competition, but no material
change in their dominant status in search and advertising.
I’m
Peter Dekom, and we live in an era where transnational corporate behemoths’
cross-border political and economic interests trump (yeah, trump) any normal
and reasonable global regulatory schemas.
Trump clouds Google lawsuit
MICHAEL HILTZIK
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