With the U.S. government's antitrust lawsuit against Google underway, Patrick Hedger, Executive Director of the Taxpayers Protection Alliance, says that the lawsuit reflects a shift in antitrust policy, prioritizing the interests of competitors over consumer welfare. He goes on to suggest that the government's approach signifies a broader strategy to regulate various aspects of the economy to promote a more interventionist model of competition.
"What's novel about the government's case is it's very much in line with this new approach we're seeing to antitrust policy of looking after the interests of competitors in the marketplace and not necessarily competition on the merits," Hedger told Federal Newswire. "A lot of the government's case hinges on how Google's competition has potentially harmed competitors, and there's not been a lot of focus on the overall impact to consumers, which is what we would traditionally expect in an antitrust trial."
The government's case relies on the claim that Google has used its partnerships with manufacturers of mobile devices, computers, and browsers in an illegal manner to stifle competition within the online search market and designate its search engine as the primary service on a significant number of consumer electronic devices. Hedger highlighted that the government's case seems to focus on how Google's actions affects its competitors and not how it harms consumers.
"The big problem that the government has is Google purchasing default status on browsers and on smartphones as the search engine, but the people that offer that default status are not the ones on trial," Hedger said. "It does seem that the consumer is being neglected here."
According to Hedger, for an antitrust lawsuit to succeed, the government must demonstrate actual harm to consumers in line with existing antitrust precedent. However, the case's focus on regulating broader aspects of the economy suggests a shift in the government's role in antitrust regulation, aiming to micromanage industries and pursue objectives beyond traditional consumer welfare considerations.
Hedger says that the government's strategy could have far-reaching implications for the future of the industry, signaling a move towards promoting competition among various competitors while avoiding excessive dominance by a single entity.
"What we're seeing right now is both the DOJ and the FTC pursuing fairly novel cases, in my opinion. The FTC's leadership has effectively admitted that they are pursuing cases that may not be in line with existing antitrust precedent in order to try and signal that Congress should act to create new laws that would make these cases more successful. So there's been an admitted strategy, at least in other tech cases that they pursued, that they're losing in order to try and win the long game."
Hedger says that the government's arguments could signal a shift in how it views its role in antitrust regulation and that this could be a way of increasing oversight over much broader aspects of the economy and industries.
"I think this is very clearly part of a broader strategy for the government," Hedger said. "The FTC, even though they're not the lead on this case, has brought similar cases against Amazon and has admitted that they want to use antitrust to pursue things like climate objectives and social justice objectives, things that wouldn't traditionally be considered in antitrust trials. It may not necessarily be a shift entirely away from looking after the consumer, but not looking after the consumer directly and assuming that they're enhancing consumer welfare by enhancing the business prospects of various competitors. So it's almost like a participation trophy model for competition where everybody has to win, but nobody can win too much."
According to a press release, earlier this year, the Justice Department, along with several States' Attorneys, filed a civil antitrust suit against Google, accusing the company of monopolizing multiple digital advertising technology products in violation of Sections 1 and 2 of the Sherman Act.
Globe Banner reports that Microsoft CEO Satya Nadella provided testimony during the trial, claiming that Google's unfair tactics had obstructed Bing's success, making it challenging for Microsoft to outbid Google's multibillion-dollar deals in securing the default search engine position. Google's defense argued that it is not illegal to offer a superior product that consumers prefer.
The Taxpayers Protection Alliance Foundation (TPAF) is a non-profit organization aimed at educating the public about the effects of excessive taxation and government spending through research and investigative reporting. Patrick Hedger serves as its Executive Director, having previously been a Research Fellow at the Competitive Enterprise Institute’s Center for Technology and Innovation, and Director of Policy at FreedomWorks Foundation.
