Google has edge in antitrust fight

The Justice Department took a big swing at Google last week, alleging in a lawsuit that it violated antitrust law by stifling competition, particularly with its search engine and lucrative advertising business.

It’s a compelling case, positioning Google as an anticompetitive behemoth that suppresses wouldbe rivals through exclusive deals and runs up prices for marketers through its byzantine online advertising sales process. Consumers, the Justice Department contends, are suffering from a lack of choice when they search travel deals, local restaurants and answers to everyday questions.

It would be great to see competitors like DuckDuckGo given a fighting chance to challenge Google’s clear market dominance, but the case here is both too narrow and too long coming to dethrone the company. The

Justice Department appears to have rushed the suit in a quixotic attempt to make it an Election Day issue, and it is outgunned by Google’s legion of attorneys and mountain of cash. There’s no question about Google’s dominance: It commands as much as 90% of the search market, and nearly 75% of mobile phones use its Android software.

“The Google of today is a monopoly gatekeeper of the internet,” the Justice Department wrote in its suit. “For the sake of American consumers, advertisers and all companies now reliant on the internet economy, the time has come to stop Google’s anticompetitive conduct and restore competition.”

But U. S. consumers shouldn’t hold their breath. The case will most likely drag on for years while appeals are heard, meaning Google can continue operating largely as it does today.

Justice Department lawyers will have to convince federal judges of the central allegation in the lawsuit: that Google’s contracts paying Apple and other smartphone manufacturers to make it the default search engine and operating system on those phones are anticompetitive rather than just savvy deal- making.

The government will also need to make plain the overly complicated online advertising market and demonstrate how Google’s control forces marketers to pay higher fees, resulting in higher prices for consumer products.

The coming weeks are likely to bring a cascade of suits from state attorneys general who have also investigated Google and will contend it hurts consumers by crowding out competitors. Eleven states joined the Justice Department’s action.

The 58- page complaint will be a distraction for years to come, potentially degrading Google’s reputation. But if the way Google approaches its business operations is any guide, this will be anything but a fair fight. The company had $ 17.7 billion in cash as of June, and it has hired an all- star bench of outside attorneys with antitrust experience to help defend it.

George Hay, a professor at Cornell Law School and former economist for the Justice Department’s antitrust division, said that the most likely outcome of the case is that, after years of litigation, Google will have to unravel some of its exclusive deals — such as the billions it pays annually to be the default search engine on Apple’s iPhones and the default operating system on Samsung devices.

Nonetheless, business should continue largely as usual for Google. “Apple can still choose to use Google’s search engine, and phone makers can still choose to use the Android software,” he said.

The Justice Department’s lawsuit is commendable, as a shot across the bow. It’s the federal government’s job to protect consumers from the excesses of big business. Good things can come from settlements and shining a light on corporations’ practices.

Google can certainly afford to defend itself until the bitter end, but it cannot afford complacency. This month, the company was the subject of a Democraticled House committee report accusing it of anticompetitive practices and arguing for antitrust law reform.

Google and other tech firms may indeed have little to fear from regulators today. But for consumers’ sake it would be nice if Google had to fear real competition.

After all, Google was once the upstart scrambling to overtake what was then the dominant search engine: Yahoo.