How US History and Google’s Own Behavior Justifies a Break-Up to Restore Competition in Search
Karina Montoya / Nov 22, 2024
The US Department of Justice has formally requested that federal district court Judge Amit Mehta, who ruled that Google illegally monopolizes in search, break up Google. As part of its final proposed judgment – which will go to trial next year – the DOJ wants Judge Mehta to force Google to sell its Chrome web browser.
A spin-off of the operating system Android would follow suit if other behavioral remedies prove insufficient to prevent Google from using Android as a vehicle to monopolize search or if Google “attempts to circumvent” the remedy package. The proposed remedies also include prohibiting Google from re-entering the browser market for five years, either through acquisitions, investments, or partnerships.
It is notable that Google and other spokespeople from groups that either lobby directly for the company or have it as one of their members want to characterize the DOJ’s break-up request as a “massive blunder " and say that it will harm both “consumers and developers” who benefit from this Google-controlled market, POLITICO reported.
The DOJ’s request to break up Google, known as a “structural remedy” in antitrust enforcement, is far from a “blunder.” Historically, antitrust enforcers have used structural separations to dismantle monopolies in various sectors in times when the concentration of market power was visibly making society overly reliant on a handful of private actors to access services such as transportation, finance, or telecommunications.
But if the antitrust historical record does not suffice, we can also examine Google’s own pattern of behavior with law enforcement, which should justify structural separations as a remedy to stop its anticompetitive conduct.
A brief history of structural remedies in the US
The US has enforced separation regimes in various sectors: railroads, oil and gas, banking, television networks, and telecommunication carriers. In a 2019 paper for Columbia Law Review authored by current Chair of the Federal Trade Commission (FTC) Lina Khan, she reviewed how different separation regimes targeted conflicts of interest that dominant market players exploited to stifle competition and innovation.
In many cases, such conflicts of interest come down to one thing: a dominant company that operates in more than one sector will often leverage its advantage in one of them to control another. Applied to Google’s case, this would mean Google is leveraging its ownership and control of Chrome and Android to cement the dominance of its search engine, which in turn kills its rivals that also need access to the browser and operating system to compete.
The case of railroads is the first example in Khan’s paper. In the 1900s, the problem in this sector was that only six companies controlled both coal mining and transportation tracks. “Independent coal companies found, for example, that the railroads refused to provide them with sufficient cars to transport their coal to market, giving the railroad-owned coal superior access to markets.”
Through legislation and through antitrust cases brought forward by the attorney general back then, it was a court ruling that ended restructuring this market: railroads would no longer be able to own or control any commodities, and this included banning exclusive contracts that would help railroads replicate such market structure.
Another example applies to telecommunication carriers. We may not immediately recognize it, but the only reason our telephone carriers aren’t allowed to make a business out of “data processing”—based on our calls’ data, for example—is a separation regime dating back to the 1970s that prohibits them from doing so.
Per Khan’s paper, back then, the Federal Communications Commission (FCC) decided that telecommunication carriers could own affiliates to do business in data processing as long as they did not self-promote those affiliates or discriminate against their competitors when it came to providing connectivity.
A 2023 report by the Center for Journalism & Liberty shows similar examples in the television broadcast market. From the 1940s to the 1970s, the FCC checked monopoly by preventing the cross-ownership of radio, television, and newspaper companies. In 1970, the FCC prevented the three dominant networks (ABC, CBS, and NBC) from monopolizing the production of TV programming by limiting the hours they could broadcast their own content in prime time. All this led to a period many called “the golden age of television,” as independent TV production companies were able to flourish.
Although antitrust enforcement in various sectors has retreated since then, this does not mean that the US government's proposal for a structural separation regime in today’s digital markets is either a mistake or an unthinkable scenario.
Google’s behavior with law enforcement is damning
If we want to remain strictly within the reality of recent events, Google’s conduct speaks for itself about why a structural separation would be the most effective and efficient measure to restore competition in search and prevent the US government from spending valuable resources monitoring Google’s conduct for the foreseeable future.
A key example dates back to 2007 when Google bought DoubleClick, a rival in the advertising technologies (ad tech) market. Google is also facing a separate antitrust lawsuit in this case. Given Google’s growing power in search, this acquisition was already subject to significant scrutiny.
To assuage concerns, Google told Congress and the FTC that it would not combine the user data it got from assets in search, e-mail, or GPS maps with information from DoubleClick about which consumers visited which publications. And so, the acquisition was greenlighted. Ten years later, though, Google did not hesitate to break its promise.
This behavior travels to other countries too. More recently, Google also broke a series of commitments it made to the French Competition Authority in a dispute with news publishers. In 2020, the French regulator fined and ordered Google to negotiate compensation to news publishers for using their content in Google search and other products in compliance with regulations in the European Union.
Google itself presented seven commitments to comply with the law. Fast-forward to 2024, and Google has now implemented AI features in search but has not yet complied with EU law in France. As news publishers found that their content was being used to train Google’s AI foundation models without notifying them, the French regulator fined Google again and disclosed that it had failed to meet four of its seven commitments. It won’t be until next year that we see whether this failure has been corrected.
Last but not least is what US courts and the public have learned in all the three trials Google has faced, in search, mobile apps market, and ad tech — that Google will go to great lengths to conceal internal information that it knows would be valuable in discovery for antitrust enforcers.
The DOJ has shown that Google doubled down on sealing communications under “attorney-client privilege” and that its executives put the burden of saving internal chatlogs on employees as public scrutiny loomed over the corporation. This behavior will perhaps have more weight in the ad tech monopoly case, considering that the judge leading that trial scolded Google and called its behavior “disturbing” and “a clear abuse of [attorney-client] privilege.”
Nothing is set in stone for the antitrust remedies that will be applied to Google. The corporation will file its own proposal by December 20 while discovery moves forward in preparation for a trial set to start next April. The DOJ will also have the opportunity to present a revised remedies proposal next March. But in light of both historical precedent and Google’s own behavior with regulators, ordering divestitures to solve for Google’s self-preferencing and exclusionary behavior seems to be the most straightforward solution for a corporation that seems not to think twice about doing whatever it takes to protect a business model built on foreclosing real and fair competition.
Related Reading:
Authors
