The Anticlimax of the Google Antitrust Suit

At the time of Google’s birth, in 1998, Microsoft was in mortal combat with the Department of Justice, which had launched an epic antitrust suit against Bill Gates and his minions. Microsoft was accused of being a behemoth that dominated the entire industry. The DOJ won the suit, although it failed to break up the company as it had hoped. But it did hobble the Redmond, Washington giant in its efforts to dominate the world.

Google was one of the companies that benefited. During its rise, the company kept its corporate mouth zipped about the huge profits of search advertising. A diverted Microsoft didn’t realize what was happening until Google captured the market.

Now, 22 years later, Google is the one in the docket. The DOJ has specifically evoked the Microsoft case by the rare action of using the trust-busting Sherman Act to accuse the former “darling of Silicon Valley” (to quote its brief) of being an anticompetitive monopolist.

Are the two suits all that similar? I’m not so sure. In the former case, the Justice Department uncovered a vast trove of emails affirming Microsoft’s bullying behavior, particularly in extorting computer companies to use its browser. Google is accused of paying companies billions of dollars simply to give its search engine a prime slot. How the companies handle their operating systems is also at issue in both cases—but the differences matter. Computer companies in the ’90s had to pay Microsoft huge sums for its operating system, because it was basically the only game in town. Now Google is accused of forcing phone companies to install its apps on the Android OS—which it gives away for free. (Throughout, Apple has been on its own.) In the current charges, the closest Google comes to bullying is the way it uses its search engine to allegedly boost its own products.

In both situations, the ostensible victims are the companies that don’t get a chance to compete against such powerful market domination. But there is a shortage of villains. The arrogant equivalent to Bill Gates is…who? Google’s former CEO Larry Page has dropped off the map. Its current leader, Sundar Pichai, has mastered a deferential demeanor under oath. The DOJ complaint actually whines about the paucity of smoking guns, griping that Google’s chief economist Hal Varian warned Googlers against using the anti-competitive vocabulary invoked in the Microsoft case—no talk of cutting off the air supply, please! Most of the good quotes in the 64-page brief come from disgruntled competitors, not Google executives. The closest they come is when an unnamed Googler says it would be a “Code Red” situation if it lost default browser status on Apple’s Safari browser.

There’s no question that Google dominates search, but in 2020, there isn’t one company that rules technology but a cluster (including Microsoft). In some ways they work in tandem: The filing cites one Apple executive saying in 2018, “Our vision is that we work as if we are one company.” Yet in other ways they do compete. It seems that everyone is vying to be the company that gives you the proper response when you speak to a device that plays music, tells you the weather, and reminds you that you’re late for an appointment. Google isn’t necessarily winning that race.

Filing an antitrust complaint begins a lengthy process. If Google decides to employ all its legal resources—and it has indicated that it intends to—we’re in for a struggle that could eat up much of the decade. A trial is more than a year away. Appeals of the verdict will take much longer. But there’s a second approach: a relatively speedy settlement that would free the company of the distractions suffered by Microsoft 20 years ago. The DOJ’s main complaints are relatively easily addressed. Google could stop paying Apple, Mozilla, and others to make its search the default choice. According to Google, most people would switch away from a rival to reinstall its search engine anyway. Meanwhile, Google could be less onerous in demanding prime placement of its apps in Android phones. Since it already controls the operating system on those phones, its apps will continue to perform well. I think Google would survive those setbacks quite handily.

social experiment by Livio Acerbo #greengroundit #wired https://www.wired.com/story/the-anticlimax-of-the-google-antitrust-suit