The Department of Justice (DOJ) and Alphabet’s Google concluded their closing arguments on May 3 regarding whether the company violated a century-old law restricting allegedly anti-competitive behavior by companies.
The case, United States v. Google LLC, has raised questions about how the economy functions with new technology and how the law might address those issues. The DOJ filed its lawsuit in 2020, alongside multiple states, claiming that the tech giant had marketed its search engine in a way that illegally limited other companies’ ability to compete.
The complaint focuses on agreements whereby Google offered ad revenue shares in exchange for cellphone carriers making their search engine the default for customers.
Google has argued that customers could have switched to a different default search engine on their own. Rising prices for ads, they maintained, came alongside increases in product quality, which is a sign of business success rather than anti-competitive practices.
It’s unclear how Judge Amit Mehta of the U.S. District Court for the District of Columbia will rule in the case. His questions on May 3 indicated that he was skeptical about the DOJ’s claims that Google had unfairly manipulated the price for advertisers.
Whatever his decision, it will likely change how search engines operate and potentially disrupt the status quo in tech markets. Among Judge Mehta’s options are breaking up aspects of Google’s business or ordering it to refrain from certain activities.
John Shu, a constitutional law expert who served in both Bush administrations, told The Epoch Times, “I think whatever Judge Mehta decides will have significant effects on tech companies and the tech industry in general, especially if the D.C. Circuit affirms his decision.”
Mr. Shu worked for Judge Stanley Sporkin and Judge Thomas Penfield Jackson of the U.S. District Court for the District of Columbia, both of whom heard the U.S. v. Microsoft case at different times. Mr. Shu told The Epoch Times that companies will “have to assess what it was, if anything, that bothered Judge Mehta” about Google’s behavior.
Future Regulation
The Competitive Enterprise Institute’s general counsel, Dan Greenberg, told The Epoch Times, “I think there are profound questions as to whether the kind of mechanical application of antitrust law that the government is advancing here is even rational for consumer goods, like search engines, that don’t charge a penny for their services.”Mr. Greenberg argued that Judge Mehta should rule against the DOJ’s application of antitrust law in this situation.
Feds’ Broader Pursuit of Big Tech
The search engine case is considered one of the biggest since the DOJ’s antitrust lawsuit against Microsoft in 1998. That case, as Judge Mehta noted on May 3, clarified that monopolies innovate. Google attorney John Schmidtlein had suggested that Google wasn’t acting like a monopoly because it was considering ways of innovating and being more competitive.Market Size, Monopolization
The Sherman Antitrust Act was passed in 1890 amid wariness about the growing power of businesses in industries like railroads. The law has led to billions of dollars in fines for a long list of companies, according to the DOJ’s website. The law led to Standard Oil breaking up in 1911 and AT&T fragmenting into multiple regional companies in the 1980s.Section 2, which the DOJ cited in its complaint against Google, reads: “Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof.”
Much of the closing arguments and Judge Mehta’s questioning also focused on how to define the relevant market for search and whether Google’s ad products were substitutable by other services.
Overall, Google’s market cap is $1.7 trillion, and the company controls about 90.68 percent of the U.S. search engine market, while Microsoft-owned Bing claims only a 3.23 percent market share in the same segment.
