Lawyers for the United States government have formally requested that Google should be broken up. In the first and most advanced of two ongoing antitrust actions, Google was found guilty of acting illegally to protect its search business. While the second trial awaits a verdict, the first is now into its formal remedies phase.
This would be the biggest competition decision of the internet era, and the biggest in the US since the Bell telephone monopoly was broken up in 1982.
After being found guilty of abusing a monopoly position, a company may agree to conduct its business in a different way to restore a competitive market, an agreement known as a behavioural remedy. But if the court thinks it cannot comply with such measures, prosecutors may call for a breakup of the company, requiring it to divest itself of key assets too. Which is the argument made by Department of Justice lawyers here: Google is too big and complex to be trusted to behave.
So the US has requested that Google divest itself of the Chrome web browser, the most used browser on both mobile and web devices, with over three billion active users. Prosecution lawyers also want action on Android, Google’s smartphone platform, and also the largest by some margin. Google must also stop paying huge amounts, over $26 billion a year — largely to Apple — to be the default search engine in browsers it does not control. And the DoJ wants to prevent Google’s search monopoly being extended into Artificial Intelligence-powered search, by prohibiting it from investing in or buying AI search products. All of these deliver traffic to Google’s search business. Their dominance therefore deters investment in superior alternative search engines, the court concluded.
It’s a significant break with four decades of competition policy. Over these years, the Chicago school of antitrust became dominant, based on the belief that the market was self-correcting, and that government intervention would do more harm than good. From Reagan onwards, Republicans strongly upheld this laissez faire philosophy. Shortly after the Bush administration took office 2001, for example, the US vs Microsoft case was rapidly brought to a conclusion with the company agreeing to a lesser penalty, even though a judge had ordered a breakup of the company.
But loyalty to the Chicago school is no longer a given. The libertarian Koch wing of the Republican Party has not been the dominant voice in competition policy for some years. Populism recognises that global technology platforms who enjoy an income exceeding the GDP of nation states are a new and quite different beast. Voters see themselves as more than mere consumers, and even as consumers they see a small number of companies acting as they please. In fact, this case was one of the last acts of the first Trump administration, brought by Attorney General Bill Barr, who served on staff in the Reagan and George H.W. Bush administrations, in October 2020.
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SubscribeChina is currently monopolizing their state-supported business, driving producers in other countries out of business. I suggest we not forget this in the search for “cheap products”. A monopolist always charges cheaply, to drive competitors out of business; prices are then raised again, sometimes much higher than before. Those who yelp about “tariffs!” should remember that ….. steel production, equipment manufacturing, solar panels, clothing …. all has moved to China, putting good people in the US and UK out of jobs. But that’s okay, they can buy cheap goods, with their meager income! 😉
As a technologist I’ll just say that far more important to break up than Google is Microsoft. Microsoft has much more of a monopoly and I promise you they are doing just as much if not more shady shenanigans in the back then Google is.
Google should be compelled to sell YouTube to Elon.
Can’t happen soon enough.
I was hoping that Elon Musk might start a search engine in the spirit of X, showing all searches free of left wing biases. Any subject on Google’s search engine is politically tinted and you have to work yourself through pages to find alternative opinions. I now use DuckDuckGo, but it doesn’t seem to be so different.
During COVID all searches were tinted towards “Government approved” scientists, and the same happens, if you search for alternatives to main stream scientific opinions regarding the Green Religion and “Climate Crisis”…
Why doesn’t anybody dare to come up with an independent search engine? I also have to use Chrome, according to the tech guys at UnHerd, to be able to post comments under UnHerd articles as it seems to be impossible with my current web browser. Maybe some kind UnHerd reader could explain why?
It’s not that the Chicago school became dominant, it’s that competition enforcement authorities have to prove an abuse of dominance in order to pursue a case.
In a nascent market (which many of these markets were until, like, yesterday), this is legally impossible: how can you argue that they are abusing their position in a market which only yesterday did not even exist?
The fact is that for many years, Big Tech could credibly argue that they were creating value for consumers, despite their dominant market positions. After all, who buys a paper map these days when on a city break?
The development of tech ecosystems has changed that equation, in particular as Big Tech leverages its dominance in core markets like search to establish anti-consumer positions, for example in online shopping markets that are shouldering out retail competitors in an unfair way.
The EU has been well ahead of the US in tackling this problem, and the recent American cases are in fact largely reliant on the EU’s case law and experience.
The EU is also first to come up with new digital regulation, which is complementary to antitrust enforcement.