Break Up Google? To What End?
Terry H. Schwadron
Oct. 25, 2020
After months of threats, Congressional hearings, complaints by businesses, competitors and right-leaning politicians who report discrimination, the Department of Justice has filed a long-anticipated lawsuit against Google search as a monopoly.
It’s a big case with international and widespread business complications that likely will be with us for years before there is any resolution.
The quick take: Sure, despite its protestations, Google holds at least 80–90% of all internet searches, and uses that market success to corner various business successes. It’s the classic definition of a monopoly. And classically, Google says it’s doing nothing wrong.
But, despite all the hoopla over filing a lawsuit, it’s not at all clear what a resolution even looks like.
Any order to “break up” Google into two or more businesses won’t change the basics here: Think search, and most of us think Google, even turning the company name into the verb for searching.
I’m the first to say that just because I launch a search for information about bicycles or bananas, I don’t like being inundated with advertising about companies offering to sell me bikes or bananas.
But so far as I can tell, nothing in this anti-trust suit, the largest and most complicated since the Microsoft suit 20 years ago over packaging browser software with operating system sales, will address that problem.
Instead, this concerns Google paying companies like Apple billions of dollars to make its search engine the default option, shutting out rivals, and using the results to collect data that gives its advertisers advantage in related search results.
As a Washington Post editorial noted, Justice, Congress or the tech community could just as easily seek to rein in the harmful effects of business dominance in linking boosts for its own products or advertisers as to tackle a more amorphous goal of anti-trust. “There are indeed things monopolies shouldn’t be allowed to do. The trick is clearly identifying what those things are,” the editorial said.
Rare Consumer Orientation?
Curiously, this Justice Department action seems relative consumer-oriented, something noteworthy in the Trump administration, which resists such themes to promote businesses. But this effort is more or less bipartisan, and across governmental jurisdictions, even international borders.
Actually, it shows what government might do if it considered its role to be more about consumer protection than profit growth alone. Imagine if Justice were to take that attitude towards environmental protection or climate change.
No, I think there are too many companies with tentacles into the Trump administration that want something here to ignore the more obvious gains to be had by thumping Google. Plus, politicians from the Right, including Donald Trump, insist that their comments and activities are routinely ignored by all of Big Tech, which they tend to lump as one big leftist entity.
That Microsoft lawsuit in 1998 went on for years, with contradictory judicial decisions before Justice just decided to withdraw altogether for more targeted concessions in a settlement.
The Federal Trade Commission conducted a two-year antitrust investigation into Google under Barack Obama, which went nowhere. Bill Barr, the attorney general, pushed hard to bring this new case before the election, but liberal Democrats see the same problem here. Still, it was Barr a few months ago who linked content bias and monopolistic practices by Big Tech in various public remarks.
You actually heard a few questions to Supreme Court nominee Amy Coney Barrett during her confirmation hearing about anti-trust legislation. European antitrust regulators sued Google in 2015 based on similar facts, and settled in 2018.
A recent House report accused Facebook, Google, Amazon and Apple of various monopoly strategies, but it didn’t call for break-ups.
A Test for Governing
Basically, Justice sees a lack of competition as harming users, advertisers, and small businesses in the form of fewer choices, higher advertising prices and less innovation. In its statement, Justice insisted that the lawsuit is separate and distinct from concerns raised about content moderation and political censorship by online platforms, though with the Trump administration, politics is always at the fore.
As The Washington Post noted, the lawsuit also is a test of anti-trust law with implications for policing the entire tech industry. “At stake is no less than Washington’s power and political willingness to watch over Silicon Valley, so the government’s gambit against Google stands to test whether roughly century-old antitrust rules are sufficiently powerful to keep the country’s technology giants in check,” said the Post.
Rep. David N. Cicilline, D-RI, who recently led a House investigation into big tech, noted that this lawsuit “is one enforcement action against one company. There’s a much broader problem in the digital marketplace.”
The Justice Department has failed in other recent battles with corporate conglomerates, including AT&Ts purchase of Time Warner Cable, and stood down from opposing other mergers that drew charges of antitrust actions.
Both Democrats and Republicans talk of strengthening anti-trust law.
In the meantime, we have a declared war between government and Big Tech with no answers on the table that speak to a better resolution.
##