So, in the dying days of Trump’s first term, the US Department of Justice (DoJ) has finally taken Google to court. Attorney general William Barr, in conjunction with the AGs of 11 states, has filed a 58-page complaint under the Sherman Act “to restrain Google LLC (Google) from unlawfully maintaining monopolies in the markets for general search services, search advertising and general search text advertising in the United States through anticompetitive and exclusionary practices, and to remedy the effects of this conduct”.
Google’s initial response was predictable: a blog post headed “A deeply flawed lawsuit that would do nothing to help consumers”. The DoJ’s lawsuit, apparently, “is deeply flawed. People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives.” There then follow useful animated gifs showing how easy it is to change your preferred search engine on your phone etc. But of course there’s no mention of the anticompetitive behaviour cited in the government’s suit.
So far, so predictable. But this sudden outbreak of regulatory zeal in the DoJ raises two questions. The first is: what took it so long? The second is: why now? Of these, the second is easiest to answer. There’s an election coming and Bill Barr wants to be seen as fulfilling his boss’s threat to “do something” about the tech companies that, Trump believes, have recently turned against him by suddenly refusing their traditional role as relay stations and amplifiers for his lies.
The first question – about why it took so long for US authorities to complain about corporate behaviour that had been obvious for years and, indeed, had provoked responses from the European commission – is interesting. There are at least three explanations for the regulatory somnolence of several US administrations (including that of the sainted Obama).
The first is what one can only call legislative dazzlement. For well over a decade, lawmakers everywhere were hypnotised by Silicon Valley. Prime ministers and presidents alike craved an invitation to the campuses of the tech giants, where they could bask in the reflected glory of a new generation of teenage billionaires. And this translated into a lot of backroom influence for the companies. One thinks, for example, of the way Google’s former chairman Eric Schmidt became a fixture in the inner councils of the Obama administration and the Democratic party. And of the servility with which municipalities abased themselves in the hope that Amazon would deign to land a warehouse or even an office in their neighbourhoods.
It’s as if nobody in Washington read the papers of the European commission’s actions against Google in 2010
A second reason is ideological. With their contempt for regulation, their views on state incapacity and their aversion to paying taxes, the tech companies were cheerleaders for neoliberalist ideas about unshackling corporations, especially when they did stuff that dazzled politicians and the media – and provided “free” services that voters loved and valued.
And then there was the shift in judicial thinking about antitrust triggered in the late 1970s by the prominent legal thinker Robert Bork and promulgated by the economics and law faculties of the University of Chicago. The essence of this new philosophy was that the size and dominance of corporations were only a problem if they resulted in consumer harm, inevitably measured by prices. And if the products were “free” (Google, Facebook and Twitter, say), where was the consumer harm?
These three factors shaped the unregulated environment in which the tech giants flourished. So the big question now is whether that era is coming to an end. Europeans have been thinking that for a while (though the news has yet to reach the Republic of Ireland, which is still in thrall to digital monopolies). The US was slower off the mark and the first, farcical congressional hearings last year did not bode well. But then a few weeks ago we had the majority report of a subcommittee of the House of Representatives after it had conducted a major investigation of Apple, Amazon, Facebook and Google, which concluded that they were all, in their different ways, abusive monopolists. And now comes Tuesday’s legal action by the Department of Justice.
I’m no lawyer, but the chances of the Justice Department winning this one seem slim because it is focusing on the wrong targets – search dominance and special deals with Apple and other companies that supposedly hobble competition. It’s as if nobody in Washington read the papers of the European commission’s actions against Google in 2010 over its suppression of independent shopping comparison sites in favour of its own. (In 2017 the company was found guilty and fined $2.7bn.) This was, as the veteran observer of the tech industry Charles Arthur observed on Wednesday, “the right move and concerned with the correct topic: that Google was manipulating search to favour its own products over what consumers evidently wanted. Effectively, that’s annexation: using your power in the market to push others out of an adjacent market.”
A cynical observer may conclude that the attorney general isn’t really interested in winning this case. And that would be an astute assessment: the lawsuit is a token gesture to keep the boss off his back. And, besides, Barr will be on gardening leave after 20 January so he won’t give a damn.
What I’ve been reading
Does no one get Covid?
It Wasn’t Just Trump Who Got it Wrong is a bracing piece by Zeynep Tufekci on how the reality-based, science-friendly information sources many of us depend on largely failed to understand the pandemic.
Biden – his time?
Joe Biden Has Changed is an intriguing essay by Franklin Foer in the Atlantic on how Trump’s opponent has been altered by the campaign.
Seeing is believing
How to write a reference for a student in the age of Zoom. Or perhaps not. Lovely piece by Matt Cheung in McSweeney’s.