U.S. justice department's antitrust lawsuit against Google signals a positive shift, says expert
'We're finally starting to take action to rein in the monopolies that are ruling our economy'
The U.S. Department of Justice filed a blockbuster antitrust suit against Google on Tuesday, arguing the tech giant's search engine and search advertising dominance was a violation of the Sherman Act — a major U.S. antitrust law.
The lawsuit represents one of the largest antitrust cases in U.S. history, and has drawn comparisons to the antitrust case brought against software and hardware giant Microsoft in the late 1990s.
Sally Hubbard, director of enforcement strategy with the Open Markets Institute and author of the book Monopolies Suck: 7 Ways Big Corporations Rule Your Life and How to Take Back Control, spoke with Day 6 host Brent Bambury about what the lawsuit might mean for consumers and other major tech companies.
Here is part of their conversation.
This is one of the largest — if not the largest — antitrust suit in U.S. history. Why is it so significant that the U.S. government is suing Google for antitrust?
Google has been a monopoly for almost 20 years now. And actually, we haven't had a big antitrust case in the U.S. against a tech company since U.S. v. Microsoft, which was brought in the '90s. We've really been following what is essentially a policy of allowing our entire economy to be highly consolidated with mergers and anti-competitive conduct, and not enforcing our antitrust laws.
So the most important thing is that this is signaling a shift where we're finally starting to take action to rein in the monopolies that are ruling our economy.
Google has said that consumers don't choose Google's search services because they are compelled to. What do you think of that idea?
The entire Department of Justice complaint is all about how Google makes it so that consumers actually don't choose Google services. They are just basically steered toward Google services because they are the defaults on all of their devices, [and] their web browsers. And this is all being done through agreements that exclude other companies from having a chance.
It's interesting that they [Google] make that claim when, for example, they paid Apple reportedly almost $12 billion last year to be the default search engine on Apple devices. So if this is something that consumers are choosing, why does Google have to spend $12 billion to be the default?
Let's talk about what happens to Google if the Justice Department prevails. How significant were the changes that Microsoft was forced to make as a result of that suit?
What Microsoft was doing, it was saying to the computer makers [that] if you want our operating system, then you need to install our browser. And those computer makers didn't have a choice because Microsoft had a 95 per cent market share of the operating system market.
So we had this innovative company, Netscape, that had a browser called Navigator, and they were just cut out of the game entirely.
Microsoft wasn't trying to compete against Netscape to be the best, it was just kicking it out of the competition altogether. And the ironic thing is that if we had not brought U.S. v. Microsoft, then Microsoft could've done the exact same thing to Google. It could have said, "OK, everyone is going to use our browser and our search engine."
When we did enforce the antitrust laws, the result of that was bursts of innovation. And so we really need to unlock the market so that new innovators can have a chance at competing against Google.
You're expecting more actions from from individual states, and perhaps more from the Department of Justice. Do you expect Google to be transformed when this is over? Will it be a completely different company, if these cases prevail, either in whole or in part?
I really hope so, because if we just try to make little tweaks here and there, it won't work. We learned that from the European Commission's attempts to stop Google's anti-competitive behaviour.
So I really think we need some structure relief — by that I mean breakups. We need to actually eliminate the ability of Google to put a thumb on the scale in favour of its own products and services, by separating it out into many different companies.
That doesn't necessarily mean bad things for shareholders. Actually, oftentimes companies are more valuable in their component parts. And I think antitrust enforcement is the first step. But there's a whole suite of anti-monopoly tools we need to use, including privacy laws; including requiring their networks to interoperate, or be compatible, with other competitors; including non-discrimination rules that create fair rules of the road.
Could the election, or the outcome of the election, possibly affect this case or other cases that are pending?
Google has eight products with over a billion users. It could be actually the substance of many, many complaints, and we will see additional complaints coming from the state [attorneys general].
But what the DOJ did is incredibly uncontroversial. It advanced a straight up Sherman Act, Section 2 bread-and-butter case that looks very much like U.S. v. Microsoft. So I can't imagine that any change in administration is going to affect what's been filed so far.
What would you be thinking if you were representing one of the other major tech companies? A couple of weeks ago, Congress issued a harsh report about the powers of Amazon and Facebook and Apple as well. Is it possible those companies might be next?
The House Judiciary Antitrust Subcommittee came out with a 450-page report with just damning evidence that shows that each one of the major tech companies are not monopolies because they're just competing and being the best, but rather because they are using unfair tactics and anti-competitive mergers to make sure that no one else has the opportunity to even compete.
So it is just a matter of time before all of the other tech companies either are met with antitrust enforcement by the agencies or are subject to legislation from Congress.
A lot of people are attached to their tech products. So what do you say to people who are partial to Google search engines, Gmail, Android phones and Chromebooks? How is this lawsuit going to benefit them in the long run?
You know, we think it's free, but it's not free to use Google search. We're paying with our data and our attention. And actually our data is highly valuable. There's economists who say that if we had competitive markets, we would be getting paid for our data.
There's obviously consequences for democracy when we're all under constant surveillance and tracking in ways we would never expect or agree to, which is what's happening in the current tech industry where we don't even know we're being tracked.
And then the data that's collected by us is then used to manipulate us to offer us different prices than other people; get different job opportunities than other people get; or, even worse, to target us with manipulative propaganda, as is currently a major issue in our upcoming presidential election in the U.S.
Written and produced by Sameer Chhabra.
