President Biden’s Department of Justice is in the middle of suing Google in the largest antitrust case since Microsoft in the late 1990s. The DOJ’s lawsuit, which accuses Google of abusing its dominance in online search and advertising, is a blatant attempt to undermine Google’s competitive edge and to appease its rivals that cannot match its quality and efficiency.
Instead of protecting consumers, Biden’s DOJ is focused on picking economic winners and losers.
This is yet another front in Biden’s war on a consumer-based approach to antitrust regulation. For five decades, the consumer welfare standard has anchored antitrust law. Under the consumer welfare standard, antitrust enforcers do not act unless business conduct is harming consumers through tangible effects like higher prices or reduced quality.
Biden’s antitrust enforcers have been open about their desire to toss aside the consumer welfare standard in favor of a European-style “abuse of dominance” standard. This would allow Biden regulators to target companies with antitrust litigation without having to prove consumer harm.
Antitrust divorced from the consumer welfare standard means that Democrats can use antitrust law to advance progressive policy priorities. This is not a hypothetical situation – FTC Chair Lina Khan has said that the government should use antitrust to direct “economic outcomes.” This case sure looks a lot like government directing economic outcomes through antitrust law.
The DOJ’s lawsuit ignores the realities of the modern digital economy and the benefits that Google provides to millions of consumers and businesses across the country. The DOJ falsely claims that Google has a monopoly in online search and advertising, and that it uses its power to exclude competitors and harm consumers.
In reality, Google does not have a monopoly in any market. It faces fierce competition from a variety of players, including Amazon, Facebook, Microsoft, Apple, and many others. These competitors offer different types of products and services that cater to different needs and preferences of consumers and advertisers. Consumers can easily switch from Google to other alternatives with a click of a mouse or a tap of a finger. Google does not force anyone to use its products or services, and they are free to consumers.
The DOJ has also taken issue with agreements Google has made to become the default search engine on devices, notably Apple. The government alleges that this investment is evidence that Google is using monopoly rents to smother their competition in the crib.
In reality, the search wars have been heating up for some time. Other search engines like Bing or DuckDuckGo have been gaining ground on Google for quite some time. Investing in research and development is also crucial to robust competition. Google search boss Dr. Prabhankar Raghavan said that investment is necessary to avoid “becoming the next roadkill.”
The DOJ’s lawsuit against Google is not only wrong on the facts, but also harmful to the public interest. If successful, it would undermine Google’s ability to innovate and compete in the dynamic and fast-growing digital economy, and create uncertainty and confusion for millions of consumers and businesses who rely on Google’s products and services. It would also set a dangerous precedent for antitrust enforcement that could stifle innovation and entrepreneurship in other sectors of the economy.