Google Suffers “Techlash” from the Federal Government
By Steven McKeever
Tech giant Google faces an antitrust lawsuit for allegedly monopolizing and abusing its dominance in online search and advertising.
In a 64 page complaint filed on October 20, 2020, the Department of Justice alleged that Google “is a monopoly gatekeeper for the Internet,” using anti-competitive tactics to maintain and extend its monopolies in the markets for general search services, search advertising, and general search text advertising.
Google’s initial response countered: “people use Google because they choose to—not because they’re forced to or because they can’t find alternatives.”
The Justice Department’s suit is part of larger efforts encompassing many interrelated issues, such as data privacy, developing against Big Tech in both the public and private sectors. The suit marks the first major use of antitrust litigation since the 1990s when Microsoft was forced to settle a decade-long antitrust suit arising out of its domination of the personal computer market. The outcome will have lasting repercussions not only for other Big Tech companies and Google’s enormous consumer base but also for startup tech companies nationwide.
Donald J. Polden, Dean Emeritus, and Professor of Law at Santa Clara University, said the Sherman Act, the set of laws that provides for antitrust enforcement, was designed to prevent the higher prices and lower quality that comes from monopolies. Polden, who has tried five different antitrust cases before juries, notes that the popular crusade against tech companies may parallel the populist movement which gave birth to the Sherman Act, but the Act may be ill-suited to deal with modern issues.
“If you look at the giants, the so-called ‘monopolists of today,’ they’re in completely different industries,” Polden said. “[So] how adaptable is the Sherman Act, passed in 1890 to deal with railroads and grains and that sort of thing, at handling information and advertising?” Polden said.
The question of whether consumers are actually being harmed will be one of the central points of contention in the Justice Department’s case against Google.
“What we really want to see, regardless of what side of the aisle you’re on, is a principled approach to antitrust—we want to make sure policy makers are focused on the impact on consumers and on consumer harm,” Jennifer Huddleston, Director of Technology and Innovation Policy at American Action Forum in Washington, D.C., said.
Huddleston’s research calls into question whether Google causes consumers any harm and points to natural tension between a highly successful product and the resulting marketplace dominance. It may be that consumers tend to choose Google not because other options do not exist, but because they find that Google offers superior products that better serve their needs.
“If you’ve got the best mousetrap, you should be able to go out there and exploit it and say ‘I’ve got the best mousetrap,’ and antitrust is supposed to prevent other firms from colluding against you in your efforts to market the best mousetrap,” Polden said.
The legal attacks against Google and other Big Tech companies are strangely bipartisan considering the extremely polarized American political climate. Huddleston said she attributes this bipartisanship to a “techlash,” where both sides of the aisle are questioning the role of tech not only in the marketplace but also in areas like data privacy.
The Justice Department’s Google lawsuit is a Republican-led effort, while the Judiciary Antitrust Subcommittee investigation, which resulted in a 450-page condemnation of Apple, Amazon, Google, and Facebook, was signed only by Democrats in the House of Representatives.
Big Tech suffered especially heightened scrutiny during this last election season. Revelations that Russian actors attempted to influence the 2016 election led Twitter, Facebook, and others to refine efforts at content moderation to prevent undue influence and the spread of disinformation. President Trump has frequently clashed with these “fact-checking” mechanisms, going so far as to issue an executive order in an attempt to prevent platforms from exercising their discretion to control content. It remains to be seen how the newly elected Biden-Harris administration will have on building bipartisan efforts.
Even if consumers suffer no harm from Google and the rest of Big Tech, there may still be concerns about anticompetition. Google drew criticism recently for its $12 billion deal with Apple to be the default search choice on millions of iPhones. A conservative list of the mergers and acquisitions conducted by Alphabet, Inc., Google's parent company, easily tops 200 companies.
Yet, Huddleston said entrepreneurs in Silicon Valley and other tech hubs might be no worse off for Google’s sprawl.
“If my product works with another product, with an existing giant’s product, it may be that my goal is not to replace that product, but to use some element of that product to make it better,” she said.
Huddleston explains that Big Tech companies continue to invest heavily in research and development, which is behavior atypical of a non-competitive market.
Whether antitrust efforts stand to benefit consumers and whether those efforts will even succeed will only be answered in time. It could take upwards of a decade, just as it did for Microsoft, but meanwhile, Big Tech companies may have to adjust their behavior to stay out of the scope of powerful antitrust attacks.
(Editor's Note: This article was originally published in the November 2020 [Volume 51, Issue 2] edition of The Advocate.)