What’s At Stake: The DOJ’s Flawed Case Against Google Heads to Trial
This week, the DOJ’s antitrust lawsuit against Google enters a crucial phase: trial. The backward-looking case ignores the dynamism of the modern tech ecosystem and more than 40 years of case law, to present a weak and misguided argument that jeopardizes the innovative search results that help American consumers and businesses every day.
During “the midst of an overwhelming sea change in technology,” CCIA President Matt Schruers notes the rise of AI will challenge the government’s case.
— He sees “the rise of AI as complicating the government’s arguments. Google is one of the leaders in generative AI with its chatbot Bard, though OpenAI released ChatGPT first. ‘That argument could not come at a more awkward time for the government, given the amazing innovations that we’ve seen come to market by companies that are not Google,’ Schruers said. ‘We’re in the midst of an overwhelming sea change in technology, and the government has to say, ‘These contracts are holding technological innovation back.’”
— Meanwhile, new search competitors like Perplexity.ai have said that “[C]ompeting with Google would be manageable.”
As the case heads to trial, here is a brief preview highlighting the vulnerabilities of the DOJ’s case:
The DOJ’s case is about helping competitors, contradicting established antitrust law, which is designed to protect consumers and promote innovation.
The DOJ suggests Google should hinder its own product quality to help competitors. This flawed perspective ignores the established antitrust precedent that firms don’t need to prop up less-efficient rivals at the expense of their own product’s improvement. Judge Mehta is already seeing through some of the DOJ’s flawed arguments, ruling against their flawed motions in limine seeking to limit evidence of Google’s improved product quality.
— Thom Lambert, Professor of Law at the University of Missouri, pointed out that the “DOJ has filed a bonkers motion in limine” in the Search trial. “DOJ has filed a bonkers motion in limine in the Google search case. The motion asks the court to bar Google from offering evidence that the conduct the [government] has challenged improves Google’s products and is therefore not anticompetitive.”
— University of Pennsylvania Professor of Law Herbert Hovenkamp was also confused: “Yes, [Professor Lambert’s] analysis is spot on, and I don’t understand the logic of a motion in limine here, but the substantive issue is interesting: Microsoft has language that the effects of a product improvement must be balanced against the competitive harm it causes.”
— Vanderbilt University Economics Professor Luke Froeb commented on “the irony” of the DOJ trying “to exclude testimony about Google’s quality.” “[T]he Justice Dept. is trying to exclude testimony about Google’s quality. They seem to miss the irony that this makes them seem as if they are more concerned with Google’s complaining competitors than their enthusiastic customers.”
— The U.S. Chamber of Commerce explains how a successful DOJ motion would have allowed the government to “tip the scales” and lead to serious due process concerns in cases going forward. “If the government can tip the scales and prevent courts from considering pro-competitive effects, however, the government could win every case by default. Moreover, such a move raises serious due process concerns over abusive and corrosive governmental power. Every defendant has the constitutionally protected right to present exculpatory evidence that challenges the government’s narrative.”
— On the court’s summary judgment ruling, they add: “The court served DOJ an important reality check – to prevail, the government will have to produce evidence, not mere theory or rhetoric, demonstrating its belief that the competitive behavior of Google (or any company) harmed competition, not just competitors.”
Critically, the government’s case stumbles on multiple fronts. The government claims that defaults are difficult to change and provides no evidence that Google’s competitors would have gained more traction in the absence of Google’s supposed exclusionary agreements.
The reality today is that it is quick and easy to change default settings and people have more ways than ever to access information—they choose to use Google Search because it’s helpful.
Americans have consistently shown they like and trust Google search results. CCIA’s DisCo Project noted “Google’s market share responds to consumers’ preferences and choices. There is a reason why ‘Google’ is the top global search in Bing and the third top search in the U.S.”
— They add: “Being the default service in a highly dynamic and competitive market does not guarantee a higher market share. For instance, more than 88% of laptop computers in the U.S. use the Windows operating system (with its default Internet Explorer or Edge web browser), yet the Windows browsers only account for a combined 13% market share of web browsers in the country. Consumers have many choices of browsers, including Bing, DuckDuckGo, Firefox, Safari, Opera, Brave, and indeed Google Chrome. Consumers do not choose services such as Google search or Google Chrome for lack of a better option; they use these services because they are the preferred options in the market.”
— Apple CEO Tim Cook put it most succinctly, “I think their [Google’s] search engine is the best,” when asked about Apple’s choice to make Google Safari’s default search engine.
— Chamber of Progress CEO Adam Kovacevich argues that consumers would likely continue to choose Google even if the DOJ’s lawsuit outlawed commercial search engine deals due to existing preferences: “Consumers in a ‘choice screen’ scenario are likely to choose Google in very high numbers, given consumer satisfaction with Google, high brand awareness and habit. We know this because the European Commission required Microsoft to display a similar ‘ballot screen’ for web browsers, but consumer preferences remained the same.”
The lawsuit poses significant risks for the consumers and American businesses the DOJ is meant to protect.
The DOJ’s lawsuit rests on a fundamental misunderstanding of how Americans use the internet and why they rely on Google for quick and accurate search results. Consumers pick Google for its consistent usefulness, not because of a lack of competition in the industry.
Ironically, the government’s flawed case targets conduct that ultimately benefits consumers. Google’s practice of paying for default search engine placement on devices mirrors common business practices, akin to how products pay for prominent supermarket shelf space. The prohibition of such promotional deals could negatively impact consumer experience, potentially leading to higher prices and more challenging, cumbersome search experiences for consumers.
— As Brian Albrecht, Chief Economist of the International Center for Law & Economics has written, the DOJ’s lawsuit is nothing more than a misguided attempt to break a system that “ultimately helps consumers.” “Despite all the bells and whistles of the Google case…from an economic point of view, the contracts that Google signed are just trade promotions. No more, no less. And trade promotions are well-established as part of a competitive process that ultimately helps consumers.”
— As Boston College Law School Professor Daniel Lyons commented, requiring a company to reduce its product quality to protect rivals comes “at the expense of consumers” and does not follow antitrust precedent. “Antitrust does not require a company to keep prices high to protect less-efficient competitors. Neither should it require one to reduce product quality to protect rivals. Both results would benefit trailing competitors at the expense of consumers.”
— He continues: “If customers prefer Google defaults, then the government is literally asking the courts to put companies ahead of consumers.”
As the case moves to trial, the court should uphold the history and spirit of American antitrust law that serves to promote innovation and consumers, rather than favoring specific competitors or impeding people’s access to desired services.
For more from Springboard on the flaws in the DOJ’s case against Google, click here.