Google is facing the biggest antitrust case in a generation. What could happen?
After being hit Tuesday with the most significant monopoly-related charges to be filed in the US in decades, Google has a long road ahead in its quest to prove it does not unfairly dominate the online search engine space.
Google was accused in the long-expected lawsuit of harming competition in internet search and search advertising through distribution agreements – contracts in which Google pays other companies millions of dollars to prioritize its search engine in their products – and other restrictions that put its search tool front and center whenever consumers browsed the web.
The filing is just the first step in a battle that could take years. Google has vehemently denied the allegations, releasing an extensive rebuttal to its company blog on Tuesday that called the case “deeply flawed” and claiming it “would do nothing to help consumers”. Here’s what is next for the search giant.
Judge selected to hear the case
A court date has not yet been set for the charges filed against Google, but the US district judge Amit Mehta was chosen on Wednesday to hear the case. Mehta, who was named to the court by Barack Obama, was selected at random and has previously heard an antitrust case. Finding a judge with experience in antitrust is unusual, as the cases rarely go to court. In the previous case, he ruled to block a merger between two major food distributors.
Google’s lawsuit marks the biggest antitrust case in a generation, comparable to the lawsuit against Microsoft filed in 1998 and the 1974 case against
AT&T, which led to the breakup of the Bell System.
To win, the US Department of Justice must prove that Google gained or maintained monopoly power through abusive conduct, or something beyond fair or healthy competition. Google is expected to argue that the government overestimated the company’s power by defining its market too narrowly.
But some experts said Google’s ubiquity makes the case more likely to hinge on whether its dominance stems from consumers preferring it to rivals, or whether the Mountain View, California-based company steered them away from those rivals.
“We know Google has a large share of that market,” said John Lopatka, a law professor at Pennsylvania State University. “The question is why.”
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Experts said the federal government is unlikely to back away from the case, and in fact may press harder, if Joe Biden wins the presidency over Donald Trump in the 3 November election.
A Biden presidency could actually be beneficial for the case against Google, said Carl Tobias, a University of Richmond law professor, allowing agencies to better collaborate.
“There may currently be too many players and too many ideas,” he said. “A new administration could come in with a clean slate and move forward in a way that is better orchestrated.”
It may be quite some time before any concrete effects from the case are seen, said Dave Heger, an analyst at financial services firm Edward Jones, which is why the markets barely reacted to the announcement.
“The lawsuit will likely take years to be argued in court, and at this stage, the DoJ is not proposing any extreme remedial action, such as breaking apart the company,” he said. “With over $120bn of cash, Alphabet is financially able to fight the allegations and pay fines that might result from any government actions.”
Other lawsuits loom
The justice department was the first to file antitrust charges against
Google, but the tech giant and its peers are facing potential legal action from a number of sources. In October, a major report detailing an investigation by the House judiciary committee concluded that tech companies wielded “too much power” and was censoring political speech, spreading fake news and “killing” the engines of the American economy.
Eleven US states joined the lawsuit filed on Tuesday, and the New York attorney general, Letitia James, said her state and six others may soon file their own lawsuit. James said if they do file a complaint, they will attempt to consolidate it with the charges from the justice department.
“We would then litigate the consolidated case cooperatively, much as we did in the Microsoft case,” she said.
The US government’s antitrust case against Google appears strong, but could face an uphill battle from a business-friendly judiciary that may question whether a free search engine beloved by consumers has actually left them worse off, several legal experts have said.
Google alternatives could thrive
Though Google said it is prepared to fight the lawsuit for years, the move is likely to motivate its search engine rivals to invest in improving their technology and challenging Google’s various restrictions to gain greater distribution, technology and legal experts have said.
The lawsuit marks a huge opportunity for Microsoft to increase usage of its Bing search engine, which it spent years trying to protect through lawsuits alleging anticompetitive practices by Google.
“Markets work better when firms know there is a sheriff in town,” said
Chris Sagers, a law professor at Cleveland State University.
It may also mark a new era for lesser-known, smaller search engines, like Ecosia, a search engine that uses advertising revenues to plant trees in areas affected by deforestation and has 15 million users in the US.
Ecosia’s CEO, Christian Kroll, said “legislative action is essential” to prevent people from automatically being funneled into Google as a default search engine. Google has a global search market share of 87%.
“Ethical options like Ecosia aren’t up against a normal competitor,” he said. “They’re up against one of the most dominant players in today’s global economy, who in the absence of effective regulation has been able to abuse its position in multiple markets around the world.
Markets work better when firms know there is a sheriff in town
Chris Sagers