By Bhaskar Chakravorti
With so much ink spilled on the subject of reining in Big Tech, so many Silicon Valley executives summoned to Washington, so many government bodies with so many complaints, it was a fair question whether someone would eventually do something—and if so, what. But now, they have. The antitrust lawsuit filed this month by the U.S. Justice Department and 11 state attorneys general against Google marks a milestone: a specific plaintiff, with a specific complaint, against a specific company.
Antitrust lawsuits are notoriously hard to win. Whatever the outcome, though, they can reshape industry structures, markets, and even technologies that emerge on the other side. This is why it is essential to raise five key questions now.
Do we agree on what we mean by “antitrust”?
Not really. Gone are the days of Standard Oil, the Clayton and Federal Trade Commission acts of the early 1900s, and the 1940-1970 golden era of antitrust lawsuits, when competition was viewed as an antidote to fascism.
Present-day antitrust is caught between two schools. The first, dominant since the 1960s, considers impact on consumer welfare as the litmus test to determine a monopoly. The other, a newer interpretation, goes further, arguing that the underlying structure of the market matters and even the potential for powerful players to exploit is a violation of antitrust objectives broadly defined. In effect, the litmus test for this second school is the impact not just on consumers but on all stakeholders: employees, suppliers, potential competitors, and more.
The second school appears to be gaining ground. A little over a year ago, 181 CEOs, all members of the Business Roundtable, declared their commitment to all stakeholders. The declaration hasn’t amounted to much so far, and neither Google nor its parent company, Alphabet, is a signatory. But it does show that the American public’s expectations of its most prominent corporations are changing. Now, the Google case—which maintains that the company has unfairly locked in its search engine as the default option in smartphones and browsers, which creates disadvantages for competitors, new market entrants, and others affected by Google’s ranking of search results—could become another landmark en route to domination of the more expansive view of antitrust.
Is Google the new Microsoft, and was Microsoft the new…?
No, and while we are at it, neither of them is Standard Oil, the century-old analogy that is wheeled out with every antitrust case. To drive the point home, Standard Oil has even been described as the “Google of its day” and the Google case as “almost a carbon copy” of the 1998 Microsoft one—all by those who should know better. Analogies are useful to make arcane issues more accessible to a general public, but it is dangerous to point to them as legal precedent or guide to policymaking.
Such analogies can be misleading for many reasons. Breaking up Standard Oil was different from breaking up Google; at the turn of the last century, the oil industry was technologically stable. By the time one acts on today’s tech giants, the technology has moved on. In other words, a slow antitrust effort could be solving a problem caused by a technology or application that has become obsolete.
The Microsoft analogy fails as well. That case centered on the bundling of Microsoft’s Internet Explorer with its operating system. Whereas that technology did not have powerful independencies with Microsoft’s operating system, Google’s search engine is made more effective by Google’s other properties, and the web of deals that Google has made with Apple and others helps it suck more data from users.
In turn, it is hard to draw lessons from these historical analogies to interpret today’s problem or devise solutions that are appropriate to the present and future of the industry.
One of the breakthroughs associated with anti-tech sentiment is its apparent bipartisan nature in a time of polarization. Genuine consensus would indeed be welcome, since there is a real possibility that a new agency—modeled on the Federal Communications Commission or the Food and Drug Administration—will have to be created to appropriately regulate Big Tech. Creating an effective one would require lawmakers reaching across the aisle.
But the reality of partisan cooperation is more nuanced. The House has taken an expansive view on antitrust with a 450-page report laying out the case for restraining the monopoly of Big Tech broadly writ. That effort is exclusively Democrat-led. In parallel, the Senate inquiries into Big Tech’s power are an exclusively Republican-led operation.
Far from working together on a cohesive approach to tackling the issues, the political parties are following separate paths with separate motivations. The Republicans seem more focused on social media platforms using their power to throttle conservative voices. Democrats speak of a “Glass-Steagall for the internet,” referencing the laws that forced banks to separate their commercial and investment banking activities to ensure the combinations did not dampen competition. In the context of tech, that could mean forcing social media companies to run their platforms separately from applications and businesses that profit from user data. Such extreme measures may raise fears among many Republicans of government overreach.
A case in point on the continued distance between the parties is the lawsuit against Google itself, which has been exclusively Republican-led thus far. Some critics claim that it was rushed out in advance of the U.S. elections to ensure that some action has been launched even in the event of a Republican loss.
Bottom line: If you are hoping for wise, forward-looking bipartisan agreement on a regulatory regime down the road, keep your expectations in check, and keep up the pressure on lawmakers to work together.
Will this lawsuit lead to the holy grail: giving consumers rights to their data?
Ultimately, the only way to truly check the power of Google or any other tech company is to grant consumers agency over their own data; digital agency, therefore, is the holy grail of antitrust. That could mean consumers owning rights to their personal data, managing access to this data, and, potentially, being compensated for such access. With this power, consumers are in a better bargaining position with the tech giants no matter how large these giants are.
But the case filed against Google is remarkably narrow: Its sole claim is that the company’s contracts with device-makers to prioritize Google’s search engine are exclusionary and give Google an unfair competitive advantage. Given the numerous and deeper worries about Big Tech, this seems almost petty.
The narrow focus makes sense as legal strategy: a specific charge now with bigger issues and additional charges building leverage for negotiations down the road. From a societal perspective, though, we should not rest until there is an endgame strategy for giving users that digital agency.
Digital agency would make data similar to other forms of personal property: a home, a bank account, or even a mobile phone number. Getting there will be hard for three reasons: Consumers don’t seem to care enough to take action on their own; there are many competing proposals for solutions, without a clear winner; and, ultimately, it is difficult to even define what constitutes personal data belonging solely to an individual. It is time to stop declaring the Google suit as a pivot point until we see work being done on an endgame strategy.
Wait. Did we forget there is a pandemic on the loose?
It is ironic that the first significant antitrust action against tech comes after years of inaction and even looking the other way in a year when consumers have huddled in their homes and must rely on tech products for remote work, schooling, health care, and personal connections. The experience of the last several months has laid bare the many problems that stem from inequalities in reliable access to the internet. The Google lawsuit only focuses on the inequities between Google and its competitors. But surely we can agree that inequities in schooling, health care, and remote working are far more consequential.
Among the many lessons of the pandemic, we should acknowledge that internet access has been proved a necessity—not a luxury. Any action against Google or others should focus on that fact en route to any settlement. Today, about half of the U.S. population is without adequate internet access, which ought to be considered a national crisis. It helps that Google is in the internet access business. Viewed in pure business terms, that business—its Google Fiber project—may be a failed experiment. However, Google Fiber’s launch did galvanize action by incumbent internet access providers, former phone and cable companies, and even new low-Earth orbit satellites and “fixed wireless” outfits to serve outlying areas.
A major lawsuit can be leveraged to convince Google to help with narrowing the access gaps, through its own investments and by encouraging those of others. Ultimately, Americans should care less that Google’s reviews reach us before those from Yelp; a responsible policymaker ought to first see to it that everyone in the United States can get access to online reviews in the first place. Or forget about reviews, every child in the United States should be able to attend online school or be seen by a doctor using telemedicine, if the need arises.
It is all too easy to google “Google antitrust” and find a running jeremiad about the evils of Big Tech and how the government should do something. It is too easy to come up with a narrow legal strategy to rush through a lawsuit just before an election. It is too easy to haul tech CEOs before Congress and grandstand before cameras. Now is the time to raise more difficult questions. We can’t be afraid to ask them just because the answers aren’t straightforward. The lawsuit has already been billed as “huge and historic,” “the biggest antitrust case in a generation,” and an “opening salvo” in the battle against Big Tech. Let’s make sure the opening salvo closes with efforts to begin the hard work of making the Google economy work for everyone.
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