The Biden administration kicked off its case against Google this week, starting what some commentators have eagerly called the “antitrust case of the century.”
What makes this case so important? The federal government has advanced the argument that Google behaved anti competitively when promoting its search product. But if you listened to the opening arguments delivered on Wednesday, the DOJ doesn’t seem to have much of a case.
The Department of Justice claims that Google has a dominant position in the search market and that it has leveraged relationships with other companies to unfairly maintain that dominance. This, in the government’s view, violates the Sherman Act.
For any major antitrust case to succeed, the government has to make the case that Google’s actions harmed consumers.
The DOJ lawyer laid out the government’s case by arguing that Google’s dominance led to data access and that the access to data led to the quality of its search engine quality. Dominance, data, quality. In other words, the benefits to consumers happened after the alleged wrongdoing took place, and so Google can’t argue that their success was due, in the first place, to consumer benefit.
This is, of course, the complete inverse of what actually happened. When Google Search first launched it was just one service among many others. The secret to its success was how the company built Google Search and how they continuously revamped it. That early success drove more and more customers to the service, allowing the company to use data to add further polish that made it more attractive to customers and businesses. Ultimately this is what drove Google Search into a leading position.
Our antitrust laws don’t exist to punish success. If you make the best car, computer software, or pizza in town and customers choose your product over others, you haven’t broken the law. In Google’s case, they built the best search engine in history and now, years later, the government is trying to punish them for it.
The DOJ has a second argument that they previewed during opening statements: Apple contracting to use Google Search as the default browser on the iPhone constitutes an anticompetitive action. This argument requires a really low opinion of private businesses and the American public. For one, private companies are free to enter into contracts with each other. If Apple thinks there is value in partnering with one search engine over another, it's likely due to the inherent excellence of the product in question. That’s not much of an argument against Google that another company loves its products and knows its customers will too. Additionally, iPhone users are free to switch their search engines. If you have an iPhone you can go into your settings right now and switch to other services like Yahoo, Bing, or DuckDuckGo.
It's likely the government will eventually lose this case because of a simple reality: Google Search is popular because people like to use it, not because of any default. For example, Google is the most popular search on Bing and 90% of Windows users change the default search from Bing to Google.
The DOJ will spend the next two years fighting this case and waiting for a probable loss.
When that loss does come it could be used to justify giving the DOJ and FTC additional power and flexibility to bring charges in the future.
Proper enforcement of existing antitrust law is important, and legitimate cases should be brought when the law is violated. But these types of pie in the sky cases spell disaster for the free market and for the American consumer.