Google Antitrust Case Could Have Major Implications for Big Tech

Google's logo pictured at the Mobile World Congress in Barcelona, Spain, on Feb. 27, 2024. Pau Barrena/AFP via Getty Images

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.

He noted that “any kind of exclusive arrangement [by tech companies], similar to the one that Google and Apple had, probably will receive extra examination.”

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.

“The judge has a great deal of discretion in deciding whether to apply statutes and case law that were produced in a very different time, for a very different kind of economy, based on a very different understanding of economics,” he said. “Judge Mehta has an opportunity here to find that, ultimately, the application of antitrust law here just doesn’t make sense.”

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.

A separate antitrust lawsuit has been filed in which the DOJ alleges that Google monopolized digital advertising technologies. Apple is also facing a DOJ suit related to its dominance in the phone market.

The Federal Trade Commission is pursuing Meta for allegedly creating a monopoly through its purchase of Instagram and WhatsApp. Amazon has been accused by the DOJ of inflating prices and degrading quality through illegal conduct.

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.”

According to the DOJ, Section 2, at its core, “makes it illegal to acquire or maintain monopoly power through improper means.”

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.

Rashi Varshney and Naveen Athrappully contributed to this report.