A Retirement Journal: Google & Antitrust

My news feed on August 5 contained an item noting a judge had ruled against Google in an antitrust case brought by the DOJ. “Already?” I thought to myself. I had written last year about DOJ’s antitrust case against Google. I hadn’t realized the case had already gone to trial and a ruling had arrived. It turns out I was confused. The August 5 ruling was about ANOTHER DOJ anti-trust suit against Google, one filed in 2020 by Attorney General Bill Barr during the Trump administration. The news was about Google’s monopoly in search engines. My commentary was about a case involving Google’s monopoly in digital advertising. No wonder I had been confused and thought the cases were the same. There is no (free) Internet search without digital advertising and there was no digital advertising before Internet search!

The search engine case went to trial in September 2023 in District Judge Amit Mehta’s court. ?Judge Mehta’s ruling came in August 2024. The digital advertising case against Google was filed by the Biden DOJ in January 2023. That case will go to trial in District Judge Leonie Brinkema’s court in September 2024. BIG government Vs BIG tech.

I wrote that the digital advertising suit was ill-advised. I re-read my post and stand by it. After reading the 64-page suit on search engine brought by the Trump Administration, I feel this one was even more ill-advised. Judge Mehta, who I admire, plain got the ruling wrong. The suit alleges that Google has a monopoly in search (true), and that it maintains that monopoly by locking up channels of distribution. These channels are the web browsers on iPhones and Android Phones and the suit claims Google locks them up by paying the likes of Apple and companies like Samsung upwards of $20B a year. Search is free to consumers and Google’s search engine is the best. Google sharing advertising profits with Apple and Samsung doesn’t lock in those companies or users from choosing another search preference. Besides, Google’s type of general search engine will likely get upended by AI search. Hence, there is no restraint of trade, price gouging or anti-competitive actions, all required by the antiquated 1890s Sherman Antitrust Act laws cited in the DOJ suit. In fact, I think the case coming up before Judge Brinkema while also weak imo stands on stronger footing than the one on which Judge Mehta ruled. The DOJ will be recommending remedies to Judge Mehta based on his ruling even as the other case comes before Judge Brinkema. Google will no doubt appeal everything but the overlap between the cases sure is confusing to this retired tech executive.

While I feel government can and should be a watch dog against abusive practices by powerful companies (e.g., tobacco and leaded gasoline), we need some modern antitrust laws. We also need more instances of better judgment and prosecutorial discretion.

My key thoughts on this ongoing antitrust battle of BIG government vs BIG business:

·????? The Sherman Antitrust Laws of 1890, amended subsequently by the Clayton Act, the formation of the Federal Trade Commission, and finally, the Celler-Keefauver Act, are all legislation that happened 80 to 130 years ago! Today’s tech world is different from the scene at start of the oil, railroad, and telecom industry eras. Unfortunately, Congress is not up to legislating intelligently these days. But I have hope that perhaps after this election!

·????? Prosecutorial discretion is needed especially when we have antiquated laws and situations needing apolitical common sense. We need such judgment and discretion whether we are talking about AGs in Florida charging women based on strict abortion laws, whether we are talking about charging Trump with felonies with what otherwise would be misdemeanors in the Manhattan DA case, or whether we are talking about a Special Prosecutor bringing gun charges against Hunter Biden when no one else would have been similarly charged. ?The recent DOJ antitrust suits fall in my view into the same bucket.

·????? Big business, or for that matter big government, is not bad in and of itself. Bad things can indeed happen. But, in those instances, look for harm to consumers, the public or competitors. I fail to see harm to anyone in the Google search engine case and digital advertising cases.

·????? Stop using the stifling of innovation as the reason for bringing antitrust suits. Innovation will happen anyway in my view. (See my musings next paragraph on the AT&T breakup.)

I will close with a reflection back on the big 70s era DOJ suit against AT&T early in my career. Bell Labs, where I worked, was the Google of its time. The Nixon DOJ wanted to take on BIG Ma Bell. On “our” side, we were itching to be unfettered by the strictures of the regulatory strait jacket we felt the government was placing on Bell Labs innovation. AT&T ended up guiding the government on the terms of the company’s breakup in the Consent Decree of 1982. My Bell Labs Department Head George Anderson said the Labs would never be put back together and a national treasure would be lost. It turns out that innovation did continue notwithstanding Bell Labs was never the same. The Bell System sort of got back together with today’s AT&T and Verizon. Finally, presiding Judge Harold Greene is known in history as the judge who broke up Ma Bell. Who knows, but will Judges Mehta and Brinkema be remembered for dismantling Google?

My good friend and Oak Guild Institute co-founder Kate Whitehead is planning a salon on the topic of Big Government Vs Big Business on September 28. I’d invite those with opinions on this topic to sign up.

Finally, I find it ironic that Google Search, trusted by an overwhelming majority of web users, is being charged with antitrust!

What do YOU think?

Jake

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