Pixel Envy

Written by Nick Heer.

The U.S. Department of Justice’s Antitrust Case Against Google

One of the overarching themes about the many terrible things the current U.S. administration is responsible for is how trust in government has fractured. You can say that to some degree about any democracy at just about any time, but few have created and then exploited such deep cracks, particularly along ideological lines. Not only does this administration have no interest in reaching across the aisle, it actively promotes seeing policy as competition and Americans who are not deferential to it as enemies.

That is what makes the antitrust complaint against Google, filed today by the U.S. Department of Justice and eleven state Attorneys General, so uncomfortable. The current U.S. Attorney General is William Barr, who has a long history of covering up possible government crimes, is partly responsible for the tear gassing of Americans for a photo op, and has demonstrated total loyalty to the current President instead of the office or his country. Before being sworn in as Attorney General in February 2019, Barr was a longtime in-house counsel for Verizon and served on the board of directors of Time Warner. Meanwhile, all of the state Attorneys General who are backing Barr’s suit against Google are Republicans.

This is important because the DOJ has brought only one other antitrust case in the last decade of the Obama and Trump administrations. This is true despite high-profile mergers and acquisitions happening at a blistering pace, particularly in the telecom space. The bar must be pretty high for what the DOJ considers a criminal violation of antitrust laws.

You can read the suit (PDF) if you’d like — it’s not very long and it contains some startling claims. In short, it argues that Google maintains dominance in search partly as the result of allegedly illegal agreements with browser and device makers, and that it abuses its monopoly in its advertising business. Perhpas the most shocking claim in the suit is this:

Apple has not developed and does not offer its own general search engine. Under the current agreement between Apple and Google, which has a multi-year term, Apple must make Google’s search engine the default for Safari, and use Google for Siri and Spotlight in response to general search queries. In exchange for this privileged access to Apple’s massive consumer base, Google pays Apple billions of dollars in advertising revenue each year, with public estimates ranging around $8–12 billion. The revenues Google shares with Apple make up approximately 15–20 percent of Apple’s worldwide net income.

[…]

Apple’s RSA incentivizes Apple to push more and more search traffic to Google and accommodate Google’s strategy of denying scale to rivals. For example, in 2018, Apple’s and Google’s CEOs met to discuss how the companies could work together to drive search revenue growth. After the 2018 meeting, a senior Apple employee wrote to a Google counterpart: “Our vision is that we work as if we are one company.”

The current version of the Google–Apple agreement substantially forecloses Google’s search rivals from an important distribution channel for a significant, multi-year term. This agreement covers roughly 36 percent of all general search queries in the United States, including mobile devices and computers. Google estimates that, in 2019, almost 50 percent of its search traffic originated on Apple devices.

Previous agreements between tech companies to work closely have fared poorly before.

There seem to be some well-founded complaints in this case, though Google sees it merely as consumers picking its stuff over the competition. But even its strongest accusations are deeply undercut by the weaponizing of antitrust law for political reasons by Barr and his Republican Party colleagues.

Karl Bode, Techdirt:

Mindless rubber stamping of megamergers and flimsy antitrust enforcement is what the United States does. It’s our biggest pastime outside of baseball. The one Trump example usually trotted out to claim otherwise, AT&T’s lawsuit to stop the AT&T Time Warner merger, was more about pissing off CNN for Trump and helping Rupert Murdoch than any serious concern about media consolidation. Rupert wanted the deal blocked after Time Warner first rebuffed his merger affections in 2014, and AT&T rejected his offer to buy CNN twice in 2017. It’s extremely likely he’s the motivating force in this effort as well.

So despite what folks like Josh Hawley and Ted Cruz would have you believe, there’s no evidence that monopoly power has ever been a genuine concern for the modern Trump GOP (simply look at its treatment of telecom, airlines, banks, and countless other heavily consolidated and monopolized sectors that routinely churn out a steady stream of consumer and competitor nightmares). And yet folks who’ve built entire careers on the backs of not giving a flying shit about corporate power, consolidation, and monopolization will now get to spend two weeks before an election pretending otherwise.

I understand those of you tut-tutting me for diving into politics on this post and being frustrated by the lack of escape from the endless election-related articles. I am sorry about that.

But you should be aware that this case is not being brought because of genuine concern for the effect of Google’s market power on the general public and small businesses. I cannot assess the viability of these claims because I am not a lawyer. I have seen some coverage that suggests this is a hack job, and some that sees it as a thoughtful suit. Maybe this really is the best the Department of Justice can do and it will prevail in court. But this administration’s exploitation of cracks in public trust means it is impossible to see the suit absent of the subtext that it is a political cudgel.