What does everyone make of today's Google antitrust action? Only the stock market is happy with the status quo

Some state AGs feel US govt lawsuit is limited, tech groups worry about implications


Analysis The US government finally unveiled its antitrust case against Google on Tuesday, accusing the tech giant of abusing its monopoly of the search and search ad market to keep out competition.

But despite the historic nature of the case and the long delay in its arrival, it’s fair to say that pretty much nobody is happy with it. Most stark of the response came from the attorneys general of those states not named in the lawsuit, many of whom put out an immediate statement saying they were going their own way – in part because the Department of Justice case against Google is too narrow.

A joint statement from the AGs from New York, Colorado, Iowa, Nebraska, North Carolina, Tennessee, and Utah was diplomatic but the fact that they weren’t among the 11 state attorneys general – all Republican – that signed up to today's the Dept of Justice lawsuit was telling in itself.

“This is a historic time for both federal and state antitrust authorities, as we work to protect competition and innovation in our technology markets,” the statement reads.

“We plan to conclude parts of our investigation of Google in the coming weeks. If we decide to file a complaint, we would file a motion to consolidate our case with the DOJ’s. We would then litigate the consolidated case cooperatively, much as we did in the Microsoft case.”

What is this about? Unfortunately, politics. US Attorney General William Barr insisted that the Google case be launched before election day – presumably to give Republicans and the president the opportunity to talk about how they were coming down on Big Tech – but there are plenty of indications that in the rush to file, the Dept of Justice fell back on the successful case against Microsoft in the 1990s rather than build an updated antitrust case designed for today’s digital age.

Nevertheless, the end result may be the same with the largely Democratic AGs providing the necessary add-on to the Dept of Justice case to account for online services, data retention and privacy issues.

Double-edged

Even praise for the lawsuit was double-edged with multiple lawmakers on both sides noting that it has been a long time coming.

Senator Josh Hawley (R-MO) who has decided to make tackling Big Tech a big part of his political persona – and is even planning to write a book about the topic – tweeted: “As the first state attorney general in the country to launch an antitrust investigation of Google, I applaud this suit as desperately needed and long overdue. Big Tech’s free pass is over.”

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Likewise Democrat David Cicilline (D-RI) who chair’s the House’s antitrust subcommittee: “This step is long overdue,” he wrote. “It is time to restore competition online.” Senator Tom Cotton (R-AK) also: “Google’s anticompetitive conduct is harming the public and American business. I commend the Department for finally holding Google accountable.”

The man famous for net neutrality advocacy, Tim Wu, of Columbia Law School made petty much the same point as The Reg made in our analysis of the case: “The Justice Department is showing that it isn’t just Silicon Valley who clones successful products: they’ve basically cloned the Microsoft case and added Google’s name to it.”

One of the sharpest voices about Google and its market intervention, Yelp’s head of public policy Luther Lowe had plenty to say about the news – he has been banging the drum about Google stealing Yelp’s market and promoting its own listings for years.

As well as appearing on the TV talking about the case – and then tweeting his appearances – Lowe picked a fight with Facebook turncoat Alex Stamos (“Alex, it is okay to not tweet if you don't know what you are talking about”), retweeted attacks on Attorney General Barr for rushing the case, and pre-empted a possible Google’s line of attack: “Some might try to characterize today's filing as a partisan vendetta by the Trump Administration. That is the false narrative Google wants you to hear.”

Video

He even managed to link to Yelp’s official response, which noted both that the case was long overdue and that it was lacking. But it also included a nice little animated video that highlights how Google has used its monopoly over search to skew results to its own best interests.

A lengthier and more thoughtful response also came today in the form of a report to The American Conservative by Mozilla’s former director of public policy, Chris Riley. With tedious inevitability, the blog post introducing the report felt obliged to attack the Democrats – this time because of the earlier Congressional report on Big Tech abuse – before settling down to make its main point: the solution is to force tech companies to interoperate.

“Interoperability, paired with but above and beyond data portability, is at the heart of the digital economy, and protecting it will be both critical and challenging,” he argues.

“It’s not a trivial exercise to implement the principles of interoperability in the framework of existing antitrust and competition law. But it’s also not an intractable one. The path ahead starts by recognizing what [other] reports make clear, as several academic studies over the past few years have also shown: the digital economy is different, and benefits from applying a different approach.”

Which is a more constructive way of making Tim Wu’s point: that the Dept of Justice has jammed the Google case into a 1998 Microsoft box.

Defenders

And lastly, there was Google and its proxies.

Google had a long blog post ready to go and accused the Dept of Justice of submitting a “deeply flawed” lawsuit. “This lawsuit would do nothing to help consumers,” wrote its global affairs head Kent Walker.

“To the contrary, it would artificially prop up lower-quality search alternatives, raise phone prices, and make it harder for people to get the search services they want to use.”

Meanwhile, tech industry lobbying group NetChoice – of which Google is a member – claimed the lawsuit was “not backed by evidence of consumer harm” and ignored “the hugely pro-competitive impact of Google Search.”

“Google Search might be popular, but it’s no monopoly,” claimed its general counsel Carl Szabo. “The Department’s case stands on shaky ground, convincing only a handful of state attorneys general to join, all of them Republicans.”

Was there anyone at all happy with today’s lawsuit? Yes, Wall Street.

Google’s share price actually went up. At the time of writing it is up 1.4 per cent – almost certainly because the market had expected a slightly tougher, slightly more solid lawsuit, and one that tackled, rather than skirted, the entire data economy that Google and other tech giants feed off. Facebook’s share price is currently up 2.4 per cent, indicating the same point.

So a good day for… shareholders? ®


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