Skip Navigation

How US v. Google Antitrust Case Changes Internet Platform Antitrust Outlook

September 18, 2020

The impending public filing of the DOJ-Google antitrust complaint effectively will mark publicly the end of the U.S. lax antitrust era of Internet platform “antitrustPollyannaism”

The impending public filing of the expected DOJ antitrust case against Google means big change is afoot for U.S. antitrust enforcement for Internet platforms.

As we look ahead, it’s important to not miss the forest for the trees.

The Senate is having an antitrust hearing on Google. The House is soon releasing a report on Big Tech antitrust. And the DOJ and states are expected to file an antitrust lawsuit against Google.

Some background on my insights and predictions below.

Thirteen years ago, I testified before the Senate Judiciary Antitrust Subcommittee in opposition to the proposed Google-DoubleClick acquisition. I accurately warned of “the stakes of lax antitrust enforcement…” and “missing the forest for the trees,” because the merger obviously “would create extreme market concentration horizontally and vertically, and also tip the online advertising market to a bottleneck.” Since then, I have copiously chronicled Google’s antitrust issues on Googleopoly.net.   

Three years ago, I made the accurate case why it was clear there would be lasting bipartisan antitrust focus on Google, Facebook and Amazon; and I made the accurate case how lax antitrust enforcement led to America’s Antitrust Enforcement Credibility Crisis, original antitrust research that was an early catalyst for the DOJ’s current review of market-leading online platforms, DOJ’s 2020 review of Section 230, and the House Judiciary Committee’s concurrent Bipartisan Investigation into Competition in Digital Markets.

That said, please don’t miss the many outsized, important, and lasting implications below that the public filing of a U.S. v. Alphabet-Google antitrust case will have broadly for future, U.S. antitrust enforcement against Internet platforms specifically.  

First, the impending public filing of the DOJ-Google antitrust complaint effectively will mark publicly the end of the U.S. lax antitrust era of Internet platform “antitrustPollyannaism.”  

As the evident U.S. antitrust case of the century, the existence of this new official case, that could become a potential seminal antitrust legal precedent, will be a stark public divergence from the behind-the-scenes, Pollyannaish, lax antitrust enforcement for Internet platforms over the last fifteen years.

These new public antitrust charges will attract exceptional, ongoing media, investor, public, and international interest, attention, and scrutiny because Google is known as the most widely used, influential, and powerful company in the world, and the legally most elusive company in the U.S.   

Second, for the first time, the media, investors, and the public will be able to read a relatively clear and easy to understand antitrust case summary replete with quotes and evidence that will officially charge Google publicly with serious violations of the Sherman and Clayton Antitrust Acts for allegedly, illegally acquiring, maintaining, and extending its monopoly power, and how those practices allegedly harmed consumer welfare.

Most importantly, the public will learn that the Government’s U.S. v. Alphabet-Google antitrust case is strong, compelling, and evidence-rich, given the unprecedented number, diversity, and depth of antitrust investigations and investigators that have contributed to this case’s evidence trove.   

To date, Google has created a politically powerful, ends-justify-the-means, antitrust defense and public narrative.

Google evidently has produced the ends of immense consumer welfare benefits via many free and useful products and services that Google claims face competition “a click away.”

The adversarial court narrative in public filings, court arguments, and testimonies will all be about legally proving whether any of Google’s many means to achieve those ends were illegal under antitrust law and precedent, because Google is legally innocent until proven guilty.

Third, for the first time, filed public charges in court will prove there is a U.S. antitrust legal case against Google that the U.S. Government believes can prevail in court. Concerning Internet platforms, that is a confidence sea change for DOJ and FTC prosecutors, until proven otherwise in court.

Fourth, it will spotlight publicly what arguments, laws, theories, and evidence the Government views are strongest and where Google (and other Internet platform models) may be most vulnerable legally.

This will have broad implications for other antitrust investigations and cases going forward.  

Fifth, it will serve as an official prosecutorial rejection of Google’s politicization of the antitrust consumer welfare standard, (as only about price, thus free means no consumer harm), in officially charging that Google has caused consumer harm from non-price factors, e.g., undue restrictions on consumer choice, serious deterioration in quality, reduced innovation, etc.    

Sixth, the public filing of antitrust charges against Google will make more likely a U.S. v. Facebook antitrust case challenging Facebook’s acquisition of WhatsApp.

In the eight months following Facebook’s acquisition of WhatsApp, Google immediately ceased competing with Facebook in social by defunding Google+ and shuttering Orkut, and then Facebook eight months later ceased its search syndication business with Microsoft and Yahoo that the DOJ formally supported, which in turn meant Facebook ceased competing with Google in search, search advertising and search advertising syndication.

Evidently, the Facebook-WhatsApp acquisition had the result of entrenching both Google’s and Facebook’s respective monopoly power in search and social, and of violating the Clayton Act via “substantially lessening competition.”  

Seventh, this new case and rich fact set naturally will educate, enable, and encourage private and international parties to file antitrust suits against Google that would be unviable, but for the DOJ charges and evidence.

Eighth, if successful in court, which is likely, the U.S. v. Alphabet-Google eventual precedent would become the most important, applicable, cited, and influential antitrust precedent for Internet platforms.

Government success in court is likely because lax U.S. antitrust enforcement has allowed Google to acquire, maintain, and extend unprecedented monopoly power in so many ways and markets, combined with a long Google track record of flouting antitrust and other laws; and because prosecutors have never had this amount of evidence and antitrust cooperation between DOJ, FTC, most state AGs, and international antitrust authorities.

Finally, expect the question to haunt this case to be: “How could this have happened?

[Originally posted on Precursor Blog]

Author
Scott Cleland is a precursor: a proven thought leader with a long track record of industry firsts.
scleland@precursor.com @scleland