Antitrust law: Google’s defense against lawsuit? You

October 23, 2020 Off By administrator

Should Google’s benefits to consumers cancel out any alleged abuses of its economic might? That’s where the company and the US government may inevitably clash in court.

How a judge answers the question could have far wider ramifications than this one case. It reflects deep tensions between what critics of US law say has allowed decades of corporate concentration, and what its defenders say is a feature of the system — not a bug — that keeps the focus squarely on consumers’ welfare in a free market.

The outcome could have lasting consequences for the internet and the rest of the economy.

Where’s the harm?

Unlike in some other countries, US antitrust law is enforced by the courts, not directly by regulatory agencies. If the Justice Department or the Federal Trade Commission wants to go after a company it must first file a lawsuit like the kind now facing Google.

That’s put federal judges in an extremely powerful position. By interpreting the nation’s antitrust laws, judges can bless or reject proposed industry-shaking mergers, decide whether a company has harmed competition, and, yes, order a behemoth broken up. Or they can turn a blind eye to what many others would consider anticompetitive behavior.

Beginning in the 1970s, many judges came to adopt a strain of market-minded thought that’s shaped generations of antitrust cases. The idea went like this: There’s nothing inherently illegal about a big company, or even a monopoly. So long as consumers are benefiting, and the market is operating efficiently, the government shouldn’t get too involved.

The US government sues Google for alleged anticompetitive abuses in search

Decades of judges appointed by both parties embraced this philosophy, often looking at consumer prices as a key metric for deciding cases. Through years of court precedent, it’s now become a defining characteristic of modern antitrust litigation.

“Antitrust law requires proving three key elements: The first is market power. The second is abuse of market power. And the third is consumer harm,” said Carl Szabo, vice president and general counsel of NetChoice, a tech advocacy organization. What’s missing from the DOJ complaint, Szabo said, is the third element.

The people’s choice

The government’s lawsuit against Google focuses on two main areas. First is the company’s decision to make Google search the default on Android, its mobile operating system and the world’s most popular, which is distributed on its own phones as well as on phones made by some other manufacturers. Second are Google’s contracts with Apple (AAPL), Samsung and other device manufacturers that make Google search the default on their phones.

Both practices are anticompetitive, according to the complaint, largely because they keep other search providers from getting bigger. That allegedly reduces consumer choice and, as Deputy Attorney General Jeffrey Rosen told reporters on Tuesday, could mean “Americans may never get to see the next Google” if the company isn’t stopped.

But on a conference call with reporters Tuesday, Google…

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