Assistant Attorney General of the United States Makan Delrahim delivered a speech today at the New Frontiers of Antitrust Conference in Tel Aviv:
AT&T held near-monopoly positions in its telephone equipment and its telecommunications service businesses. Its maintenance of those monopolies triggered a series of antitrust complaints. In 1974, the United States sued AT&T for monopolization and alleged a long list of restrictive practices. The company defended its practices and its “integrated” structure by arguing that it offered the public superior price, performance, and innovation. This argument was not successful. After years of litigation, the company agreed to be broken up into separate local and long-distance companies – the “baby Bells” – in 1982 by the Reagan Administration.
Delrahim’s speech can be read as a loose outline of how the Department of Justice may proceed with its investigations into Apple and Google. He references three cases in his speech; the AT&T example above is one. It is striking to me that the vertically-integrated telecom giants of today are not a part of their forthcoming investigation.
Matt Novak, Gizmodo:
President Donald Trump suggested this morning that Attorney General Bill Barr might go after the big tech companies, seeming to confirm rumors that the U.S. Justice Department would soon launch an onslaught against Silicon Valley. The DOJ is reportedly thinking about an antitrust investigation of Google but Trump’s comments today hint that “antitrust” might be a smokescreen for other motives.
What could the real reason be for Trump pursuing a case against Big Tech? Trump has previously railed against American tech giants for being “biased” against conservatives and recently called for a boycott of AT&T because the company owns CNN. Trump’s attacks on CNN are solely based on the fact that the news network will report on Trump’s various crimes against humanity without the rosy shine that viewers might see on Fox News.
Ben Thompson is skeptical of the formidability of antitrust cases against the big tech companies:
Ultimately, when it comes to antitrust actions against tech companies in the U.S., there really isn’t nearly as much there as all of the attendant fervor would suggest. Google is absolutely vulnerable, Apple somewhat less so, and it is very hard to see any sort of case against Facebook or Amazon.
The validity of these rumoured antitrust cases is something that must, of course, be judged independently of the proclivities of the stupid oaf currently spinning in his chair in the Oval Office. Whether Thompson is correct can only be evaluated in courts and through long legal proceedings. But it’s hard not to see the influence of the remarks explained by Novak above as an equal motivator in the public square of these investigations, even if they have no legal standing, and that’s an obvious worry.
Update: One more link. Victoria Song, Gizmodo:
The U.S. Justice Department recently signaled it was exploring possible antitrust investigations into Google and Apple. Leading those investigations—assuming they actually happen—would be none other than Assistant Attorney General Makan Delrahim, a former lobbyist that presidential hopeful and Massachusetts Senator Elizabeth Warren says should recuse himself due to his history with both companies.
In a letter to Delrahim, Warren notes Google paid Delrahim about $100,000 in 2007 to lobby federal antitrust officials for the company’s acquisition of DoubleClick Inc, an online ad company. That gig paid off, as it eventually culminated in a $3.1 billion merger. As for Delrahim’s ties to Apple, Warren notes he also lobbied on behalf of the Cupertino giant regarding patent reforms. The letter further emphasizes that Delrahim worked as a corporate lobbyist until 2016, and counted Anthem, Pfizer, Qualcomm, and Caesars among his clients.
I maintain that Google’s purchase of DoubleClick must rank near the top of the list of acquisitions that should never have been allowed.