Will the Google search decision supercharge US Antitrust enforcement?

By Tara Pincock

Earlier this month, Google suffered a major blow that could pave the way for a wave of antitrust cases against Big Tech firms. In the first of the two lawsuits filed by the US Department of Justice (DOJ) against the company, District Judge Amit Mehta ruled that Google violated antitrust law by maintaining an illegal monopoly in the online search and search-advertising markets.

This raises the question of what remedies Google will face, with the DOJ reportedly considering a breakup of the company. But the more important question is whether the case will catalyze the reforms needed to foster competition in today’s monopolized tech industry or ultimately be remembered as a missed opportunity.

As a former antitrust enforcer who spent years investigating and litigating against Google, I believe Mehta’s well-reasoned decision has an excellent chance of surviving on appeal. While simply holding a monopoly is not inherently illegal, wielding that power to stifle competition – as Google did – is. By leveraging exclusivity contracts to block rivals from securing default placement on key search access points like the Safari browser on iPhones and charging supracompetitive prices in the text-ad market, Google was able to crush potential competitors.

Google has already announced its intention to appeal the decision to the US Court of Appeals for the District of Columbia – the same court that held Microsoft violated the Sherman Antitrust Act in 2001. This underscores the striking parallels between the two cases. Like the Microsoft ruling, the Google case was not based on novel legal theories or fringe interpretations of antitrust law. Instead, Mehta closely followed the reasoning laid out in the Microsoft decision, adopting a conservative approach that should enhance his ruling’s chances to withstand Google’s challenge.

If the decision is upheld, it could fundamentally change how Big Tech platforms and other dominant companies conduct business, making them more reluctant to enter into exclusive contracts aimed at shutting out competitors. But the extent of this shift will depend more on the severity of the remedies than on the ruling itself. To restore competition in the search and search-advertising markets, the remedies must be multi-pronged, structural, and, most importantly, address the root causes of the harm caused by Google’s anti-competitive practices. A slap on the wrist will not suffice; the penalty should be severe enough to serve as a warning to other monopolists.

The implications of Google’s defeat go well beyond this case, showing that Big Tech is not untouchable and that the 1890 Sherman Act can still be applied to hold monopolists to account. With the US government already pursuing antitrust lawsuits against Apple and Amazon, as well as another case against Google – this time in the advertising technology (ad-tech) market – Big Tech monopolists could soon face a painful reckoning.

In particular, Mehta’s decision could significantly affect the Google ad-tech trial, which is scheduled to begin on September 9. While the ruling that Google is a monopolist in general search does not guarantee a similar outcome in the ad-tech case, there are clear similarities between Google’s conduct in these markets. In each, Google exploited its dominance to suppress competition and extract excessive profits by manipulating advertising auctions.

Given these similarities, US District Judge Leonie Brinkema will likely rely heavily on Mehta’s decision when deciding the ad-tech case. With the Apple and Amazon antitrust trials still years away, the influence of the Google search ruling on these cases will largely hinge on the outcome of the appeal.

Regrettably, the Google search ruling was not a total victory for antitrust enforcers, as additional claims brought by state attorneys general were dismissed. For example, the court rejected the claim that Google’s SA360 search-engine management tool unfairly favored its own services. In his decision, Mehta argued that the company was not liable for this conduct because it had no obligation to deal with its competitors, despite having promised that SA360 would remain a neutral third party when it was acquired in 2008. Mehta ruled in favor of the government only on the most narrowly defined charges.

So, will the Google search decision catalyze real competition in the tech sector? Probably not. Although it represents a step in the right direction, US antitrust law is still burdened by bad precedents, and courts are often reluctant to rule against large corporations.

Despite being relatively straightforward – essentially an updated version of the Microsoft antitrust case – the Google search trial dragged on for ten weeks, culminating in a 286-page decision that could yet be overturned. It is increasingly clear that Congress must step in and reform antitrust laws to ensure that small businesses have a fair chance to grow and thrive. Google may have lost this battle, but the war for competitive markets will not be won in the courts.

Tara Pincock is Policy Counsel at the Open Markets Institute.

 Copyright: Project Syndicate, 2024.
www.project-syndicate.org

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