Nicholas Johns, senior policy and government affairs manager at the National Taxpayers Union (NTU), said the government’s arguments within its antitrust case against Google demonstrate a clear shift from past precedent, which could be very damaging to American competitiveness.
If the Department of Justice (DOJ) is successful in this case, Johns said it could create a chilling effect on U.S. innovators, which would further reduce their abilities to invest in the technological development of the future. It could also hinder these companies from providing hundreds of thousands of individuals with great-paying jobs.
“At a time when global tech competition is stronger than ever before, this could damage and restrict a sector that has empowered America's prestige, economic growth and global influence like few others,” Johns said.
The U.S. Department of Justice and 11 state attorneys general filed an antitrust lawsuit against Google on Oct. 20, 2020. The lawsuit alleges Google unlawfully maintained monopolies in search and search advertising through anticompetitive and exclusionary practices.
The complaint cites exclusivity agreements, tying arrangements and preferential treatment as tactics used by Google to stifle competition and consumer choice. The DOJ said their action seeks to halt Google's anticompetitive conduct and remedy the competitive disadvantages inflicted upon consumers, advertisers and internet-reliant companies.
According to USA Today in an opinion article written by Barbara Comstock, the DOJ alleges 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.
These collaborations have allowed Google to designate its search engine as the primary service on a significant number of consumer electronic devices, including smartphones, according to the DOJ. The government claims this practice has deterred users from investigating alternative search engines like Bing, DuckDuckGo and others.
Johns said the government’s case seems relatively weak given how sweeping the allegations are. The crux of its case is focused on the business-to-business deals between Google and other parties within the mobile sphere. The government is arguing that these deals amount to monopolistic behavior and point to the Microsoft antitrust cases as a corollary.
But there are key differences between the Microsoft and Google cases, specifically regarding consumers’ choice, Johns said.
“Consumers today are well-versed in technology and can easily navigate to an alternative search engine or can easily switch their default search engine on their phones,” he said. “In the Microsoft case, a key fact was that Microsoft was allegedly restricting access to the necessary code for competitors to build on their operating system.”
“We have a situation where a great product is currently the best out there in the marketplace, and so can secure deals because of that,” he said.
In this case, the government must show that Google went against the consumer welfare standard, the North Star for antitrust law since the 1980s.
This standard, generated and supported by decades of precedent, focuses on whether a market actor with substantial market power is raising prices above competitive levels or is diminishing product quality by its use of market power.
“Clearly, the DOJ and the FTC under Chair (Lina) Khan is seeking to move backward from this successful standard by a pattern of attacking large companies using novel legal theories,” Johns said. “In this case, consumers have benefitted for decades from a free product from Google. It's difficult to reconcile the norms of antitrust law with this particular case.”
“Consumers are clearly able to select competitors, and there are several other options available for search queries,” he said.
Johns advocates for pro-taxpayer policies across various sectors, including budget, telecommunications and healthcare. Before NTU, Johns was a legislative fellow at the Republican Study Committee and held a position at the International Franchise Association.
