Economy & Business

The Feds’ Antitrust Case against Google Is Weak

The Google sign on one of the company’s office buildings in Irvine, Calif., October 20, 2020. (Mike Blake/Reuters)

The Trump administration’s lawsuit against Google doesn’t live up to the hype. Early reports suggested a bipartisan group of state attorneys general might join together with the feds and demand the company’s breakup. Instead, the eleven AGs who joined in are all Republicans, and breakup talk is thus far limited to a brief mention that “structural” remedies could be an option.

The core allegation here is that Google has a monopoly over Internet searches and the accompanying advertising — with a roughly 90 percent share of web searches in the U.S. — and illegally maintains that monopoly through numerous business practices. For instance, Google has paid billions of dollars to other companies for the privilege of being the default search engine on various mobile devices and web browsers. These agreements make it even harder than it would be otherwise to compete against Google for search traffic.

This is not a frivolous suit with zero chance of success. Google’s actions here bear a resemblance to the behavior that got Microsoft hauled into court 22 years ago, and it may well lead to a similar result: lots of legal wrangling followed by a settlement in which the company scales back the sketchiest parts of its business model but doesn’t lose too much of value. Such a result would, frankly, not be the end of the world.

But is this a good suit, one that serves the country’s best interests? That is less clear, especially if the government eventually does pursue drastic measures such as a breakup.

American antitrust laws are broadly written, and the prevailing legal standards have changed over the years. The dominant and most economically sensible approach to enforcing these laws, however, remains the one that Robert Bork laid out in the 1970s: “Anticompetitive” behavior becomes a problem when it harms consumer welfare. In our view, officials should not pursue antitrust actions unless they can compellingly show a company is, in fact, harming consumers — not just that it is doing everything it can to attract consumers to its product at the expense of the competition.

Is it harmful to consumers for Google to pay other companies to feature its search engine as the default? That’s a hard case to make, because it’s generally easy for those who prefer other search engines to change the default, as Google and the alternative engines are all free and switching can be achieved in a few clicks; because these lucrative arrangements help to subsidize the devices consumers use; and because most users would probably choose Google anyhow, if its runaway success over the past two decades is any guide.

The argument to the contrary, as it stands so far, is highly speculative. It holds that consumers would be better off if they had to affirmatively choose Google, because other engines would then have more of a chance to compete, and the added competition and innovation would lead to better products and greater choice, and lower rates for those who advertise in web searches. That argument may find some sympathy in court, and it might even be true. We, like the folks behind this lawsuit, have no supernatural ability to see what would happen in that counterfactual world. But it is a poor excuse for a government crusade against one of the country’s most successful private enterprises.

There is much more to come in this lawsuit, and in the additional lawsuits against Google that states are expected to file soon. Google is not a corporate angel, and we will not be shocked if genuinely incriminating evidence of anticompetitive conduct emerges. Further, if Google’s size and influence create problems that don’t fit the antitrust framework, that may be a case for changing other laws rather than stretching antitrust enforcement. Much of the current discontent with Google and other search and social-media companies is about their ideological biases, their internal corporate cultures, their impact on the public marketplace for free speech, and how they relate to China and other hostile foreign governments. But we should not use antitrust law as an all-purpose stalking horse for entirely separate agendas.

This opening salvo, however, is rather underwhelming.

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