Public Knowledge has closely tracked the proceedings for the U.S. v. Google (2020) case regarding search and search advertising. Be sure to view our remarks during the trial to learn more about how we got here while this post explores what should happen next.
The D.C. District court announced its decision in U.S. v. Google last week, and Judge Mehta rightfully agreed with the Department of Justice that Google violated Section 2 of the Sherman Act through its actions in the search and search text advertising markets. The court has agreed to bifurcate the liability and remedies phases – meaning the next phase determines the remedies. While we can speculate what the remedies (and industry impact) might be, I’d like to take this opportunity to think beyond remedies and talk about how the United States can confront the harms of digital platform consolidation more proactively.
Google operates as the informal gatekeeper of the internet, controlling nearly 90 percent of the online search market. Consequently, the remedies in this suit will have a monumental impact on how consumers search for information online. This suit is commonly regarded as the biggest tech antitrust trial since U.S. v. Microsoft, a case which Judge Mehta skillfully analogizes to Google’s conduct in his decision. Both cases highlight the ways platforms of significant size and influence can impact technology markets and consumers.
Google’s capacity to implement mechanisms to reinforce its role as a dominant firm is not unique to it. The dominance of Big Tech takes on many forms and roles in a variety of markets – e-commerce, mobile phones, and social media, to name a few. As the tech industry evolves, it is essential to consistently address any consumer protection concerns that arise. The government has acknowledged this need by taking on a slew of antitrust lawsuits. They’ve also sued Amazon, Apple and Facebook parent Meta for anticompetitive conduct that allegedly hurts both rivals and consumers.
The consent decree that came out of U.S. v. Microsoft arguably cleared the path for not only browser rivals like Google Chrome and Firefox, but also, more broadly, many of the tech giants we see today. But in the face of these giants, we can no longer solely rely on landmark litigation to change the tides of dominant market power. The days of David and Goliath antitrust litigation are over – the U.S. government is in the throes of a fight between skilled but outmanned soldiers and a rumbling army of titans. In short, the government needs reinforcements.
Remedies for an increasingly complex tech industry, particularly for any judge not necessarily steeped in subject-matter expertise, may be difficult to craft and execute. Given the narrowness of the case – and, ultimately, the decision – it’s likely that Mehta will issue a series of injunctions, which would bar Google’s exclusionary conduct. Injunctions would be the simplest path; however, they won’t have the strongest impact. As Mehta indicated, many of Google’s actions would raise little concern absent Google’s oversized market power. Structural separation should be the solution, as it targets the underlying source of the problem – Google’s dominance.
The breakups derived from both Standard Oil Co. of New Jersey v. U.S. and U.S. v. AT&T certainly set the precedent for Mehta to do so. From AT&T’s breakup, we learned how monopolies can leverage their dominant power to overtake adjacent markets. Similar to AT&T, Google’s monopoly in the search engine space allowed it to dominate the search text ad market. There is, however, an important historical distinction with AT&T’s breakup – it was accompanied by over a decade of regulatory expertise from the Federal Communications Commission. In AT&T’s case, its control over copper loops created monopoly power in several markets – thus, a successful structural separation necessitated disentangling AT&T’s role in information services, long-distance telephone services, and equipment. This required both structural and behavioral remedies to address dominance, which were well-supported by the expert regulatory framework in these markets crafted by the FCC.
The remedies in this case would benefit from similar expert analysis of digital platforms and their practices, informed by research on the complexities of building competitive technology markets. A sector-specific agency can provide such guidance by offering expertise on matters like interoperability or data portability; in other words, a digital regulator can execute means for healthy competition. This is not to suggest that a digital regulator is necessary for a structural separation remedy – structural separation can, and should, be considered by Judge Mehta as a remedy in this case. Simply put, we need both. History has shown that structural separation is best supported by a sector-specific enforcement framework. Beyond remedies, a digital regulator would provide judges and agencies with necessary reinforcements like technical guidance to better adjudicate and regulate anticompetitive conduct by digital platforms, as well as proactively promote competition based on its technical expertise as digital platforms evolve. Finally, a digital regulator can protect against public interest hams that arise from specific digital platforms that are separate and apart from antitrust harms.
Public Knowledge believes the combination of antitrust laws, enforcement agencies, and sector-specific regulation will pave the way for reining in the power of dominant Big Tech firms. Moreover, just as regulation should strengthen antitrust, so should legislation. Litigation takes years, but Congress need not and should not wait years before it enacts legislation to establish a digital regulatory agency. That agency can be working even as litigation goes forward, and it can make meaningful contributions to both the litigation and any remedy even as Congress continues work to fine tune and address improvements of the agency’s mandate. Moreover, even as the litigation goes forward under existing law, Congress must strengthen antitrust law and the agencies with bills like the Competition and Antitrust Law Enforcement Reform Act, and pass sector-specific legislation like the bipartisan Ending Platform Monopolies Act, American Innovation and Choice Online Act, and the Open App Markets Act to protect consumers and foster competition.