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What a Biden administration might mean for DOJ's antitrust case against Google


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What a Biden administration might mean for DOJ's antitrust case against Google

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The Trump administration launched its antitrust legal challenge against Alphabet Inc.'s Google LLC this week, but policy experts say federal antitrust legal scrutiny will likely rage on regardless of the election results this November.

The U.S. Justice Department filed an antitrust lawsuit against Google on Oct. 20 alleging that the company unlawfully maintained monopolies in the general search, search advertising and general search text advertising markets through "anticompetitive and exclusionary practices." The lawsuit, which was filed in the U.S. District Court for the District of Columbia, accuses Google of paying "billions of dollars each year" to device-makers such as Apple Inc. and Samsung Electronics Co. Ltd., as well as to major U.S. wireless carriers including AT&T Inc., T-Mobile US, Inc. and Verizon Communications Inc. to secure default status for its general search engine.

Eleven states, all with Republican state attorneys general, have joined the suit, and White House economic adviser Larry Kudlow told reporters that President Donald Trump consulted with the Justice Department before the suit was filed. But despite these partisan elements, antitrust concerns around big tech stretch across the political aisle, and policy experts say the suit will continue no matter who wins the upcoming U.S. presidential election.

Biden vs. Trump

"I do not think a change in administration will demonstrably impact the [DOJ] complaint," Sally Hubbard — director of enforcement strategy at the Open Markets Institute, a research and advocacy organization focused on antitrust — said in an email. Hubbard noted that she expects Democratic state attorneys general to join the suit when their case is ready.

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A Justice Department official noted on Oct. 20 that the agency has a line of communication open with states that have not joined the lawsuit. Seven additional states, some with Democratic attorneys general, could sue Google in the coming weeks over its alleged anti-competitive behavior, New York Attorney General Letitia James said Oct. 20.

John Yun, who previously was acting deputy assistant director in the economics bureau in the antitrust division at the U.S. Federal Trade Commission, said in an interview that an administration change "doesn't quite have the same dramatic effect" on antitrust regulation as it does in other areas of government.

For instance, Yun pointed to how the U.S. Federal Trade Commission brought an antitrust complaint against QUALCOMM Inc. at the tail end of the Obama administration, and then the Trump administration continued to pursue the case.

Should former Vice President Joe Biden take the White House, Yun said he expects the Democrat will be "very reticent to completely withdraw" the Google suit.

"The best they've got"

Charlotte Slaiman, competition policy director at public interest group Public Knowledge, said in an email that a Biden administration would have the opportunity to amend the complaint or expand the case to include other areas of Google's business where there appears to be anti-competitive conduct, such as the ad tech industry.

"I'm hopeful that this would lead a Biden administration to want to push hard on any antitrust case against Google where they find facts indicate a violation," said Slaiman. "At the same time, the role of Congress and agencies to do more than antitrust enforcement is hugely important, so I'm also hopeful a Biden administration would make new laws and rules for big tech a priority," she added.

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Yun, however, does not think it is likely anything would be added to the current complaint, noting that the Justice Department has been working on its case for quite a long time.

"This is something they've been thinking about, and this is sort of the best they've got," he said of the DOJ. "So the idea of adding more, even if you want to be more aggressive, you're still bound by precedent, and what would be considered legitimate complaints against the company. And I think, for me, this is probably the 'best they have.'"

Hard comparisons with Microsoft

As for the strength of the case, Hubbard says she thinks DOJ has alleged an "incredibly strong" case.

"Google is doing the same thing Microsoft [Corp.] did more than 20 years ago. It was illegal then, and it's illegal now, as U.S. v. Microsoft is still good law."

In its complaint filed on Oct. 20, the DOJ repeatedly cites its previous antitrust case against Microsoft case as case law and compares Google's current practices to what it alleged Microsoft did.

"Almost 20 years ago, the D.C. Circuit in United States v. Microsoft recognized that anticompetitive agreements by a high-tech monopolist shutting off effective distribution channels for rivals, such as by requiring preset default status (as Google does) and making software undeletable (as Google also does), were exclusionary and unlawful under Section 2 of the Sherman Act," wrote the agency in its Oct. 20 complaint.

The agency even went so far as to claim that Google used "the same playbook to sustain its own monopolies" as Microsoft.

However, Yun says he does not believe the Microsoft comparisons are likely to be a successful strategy.

"They are trying to import Microsoft and use the power of that precedent to create a similar complaint against Google," he said. "The difference is any sophisticated court will ask a very simple question: What's the difference between Microsoft's case in 1999-2000 and Google in 2020? And I think those differences are going to be largely in favor of Google" he added.

Joe Kennedy, senior fellow at the Information Technology and Innovation Foundation, a nonpartisan group that focuses on the intersection of innovation and public policy, said in an interview that while it makes perfect sense to draw the parallels to the Microsoft case, the court will look at the new suit independently.

"In the end, [it] is going to depend less on how they structure the case and more on the evidence that they have … whether or not Microsoft engaged in substantial anti-competitive behavior, I mean that has zero relevance to whether Google engaged in similar behavior," he said.

Smoking gun

As for the evidence presented in the complaint, Kennedy says the complaint lacked a smoking gun and was not very compelling, but cautioned that the agency could still produce more evidence.

However, Slaiman noted that if the DOJ can effectively draw parallels between Google's alleged anti-competitive behavior and relevant precedents, such as Microsoft, it could bode well for the agency's case.

"Exclusive dealing is an area of antitrust law that is strong and has strong recent precedents, so it's smart to position themselves there," she said.

When asked on an Oct. 20 press call to elaborate on the types of relief that the DOJ is seeking, Ryan Shores, associate deputy attorney general and senior adviser for technology industries, said, "Nothing is off the table, but a question of remedies is best addressed by the court after it has had a chance to hear all the evidence."

Hubbard believes that it is too early to say what the remedies could be.

"The case is likely to take a few years to resolve, and only after additional fact-finding will we have a sense of the remedies," she said.