The Google Antitrust Decision: An Incomplete Neo-Brandeisian Victory

Madhavi Singh is the Deputy Director of the Thurman Arnold Project and a Resident Fellow at the Information Society Project at Yale Law School.

In what is considered to be the biggest tech antitrust decision in nearly 50 years, a District Court concluded in United States v Google LLC that Google acted as a monopolist and violated Section 2 of the Sherman Act by entering into exclusive distribution agreements that had anticompetitive effects. The decision is important for several reasons. It is expected to influence the pending antitrust cases against other Big Tech companies, pave the way for future innovation, and shape the future of the internet. Others have been less optimistic, claiming that the decision comes too late to save the market for general search and that Google’s position is already too entrenched in the infrastructure of the internet. Yet others contend that the final impact of the decision hinges on the remedies imposed and although difficult, a complex web of structural remedies could still succeed in restoring some level of competition in the market for general search.

Notwithstanding these varied opinions about the impact of the judgement, the decision has been heralded as a major victory for the modern antitrust movement, also called the Neo-Brandeisian movement. This essay argues that the Google decision marks only a partial victory for Neo-Brandeisians. Although the Neo-Brandeisian movement provided the tailwind for the Google decision, the judgement itself simply applies existing legal precedents and doesn’t contribute to the core Neo-Brandeisian agenda of restoring legal standards, recasting the law, shifting normative goalposts or substituting economic dominance with intellectual pluralism in antitrust analysis. The essay calls for the Neo-Brandeisian movement to not lose sight of its core intellectual and ideological tenets as it faces a conservative judiciary.

The Neo-Brandeisian movement

The Neo-Brandeisian Movement traces its intellectual roots to Justice Louis Brandeis’ claim that monopoly power is a threat to democracy. The Neo-Brandeisians blame the Chicago School and the Law & Economics movement for crippling enforcement by subverting the law, misinterpreting legislative intent of the Sherman Act, and relying on sweeping and blatantly false assumptions about free-functioning markets and firm behavior. They attribute the growing concentration across several sectors of the American economy to this Chicago-induced laissez-faire approach.

Notably, the Neo-Brandeisian movement has transcended niche academic discussions and garnered bipartisan political support. Concepts like monopoly power, concentration, and dominance went from being inscrutable antitrust jargon to a part of popular discourse. The Biden administration appointed leading Neo-Brandeisian figures like Lina Khan, Jonathan Kanter and Tim Wu to pivotal government offices. Under this new leadership, antitrust enforcement has intensified. New rules have been passed including a ban on non-compete and updated merger guidelines. Multiple enforcement actions have been brought across sectors and several mergers have been blocked.

Regulating Big Tech has been a major focus for Neo-Brandeisian scholars and regulators. Indeed, the article that shot Lina Khan to fame and popularized Neo-Brandeisian ideas pertained to Amazon’s anti-competitive conduct. Columbia University professor Tim Wu, another popular Neo-Brandeisian scholar who served as Special Assistant to President Joe Biden for technology and competition policy from 2021 to 2023, has also extensively critiqued Big Tech’s monopolistic conduct. Unsurprisingly then, the FTC and DOJ under the Biden administration have filed multiple antitrust complaints against Big Tech companies. Google search was the first of these cases to go to trial. Thus, the decision in the Google case is important not only because of its potential ramifications for other Big Tech cases, but also to assess how this progressive antitrust movement fared in front of a conservative judiciary.

The Google search decision

The complaint in the search case pertained to Google’s distribution agreements, under which Google paid large sums of money to browser developers, mobile device manufacturers, and wireless carriers in return for Google’s search engine being given default placement at key access points. Some of these agreements also stipulated that partners do not preload any other search engine on the device making Google the exclusive preloaded search engine. In its decision, the court found that Google held monopoly power in two markets, namely, ‘general search services’ and ‘general search text ads,’ and it had illegally maintained its monopoly power in these markets through exclusive distribution agreements. Thus, the agreements were found to violate section 2 of the Sherman Act which prohibits illegal monopolization.

An important victory

The judgement is indeed a Neo-Brandeisian triumph, for multiple reasons. First, the Neo-Brandeisian movement must be credited for focusing attention on the abuse of power by Big Tech companies and the associated enforcement zeal. They have successfully converted an intellectual movement into an actual enforcement strategy by bringing a flurry of antitrust cases against Big Tech. While the Google search case was, in relative terms, amongst the most straightforward of all Big Tech antitrust cases, this victory is still notable. These agreements had been in existence for several years and it is only now that regulators have managed to take action.

Second, it is encouraging to see the court successfully avoid red-herring arguments such as zero-priced services, consumer benefits arising from efficiencies of scale, multi-homing, etc. This indicates remarkable progress. Even until very recently courts and regulators were still getting waylaid into tackling diversionary arguments like ‘competition is just a click away’ or ‘zero switching cost.’ Antitrust scholars would recall a not-so-distant past (2017) where regulators were still responding to arguments about whether Google could have monopoly power despite providing ‘zero-priced’ services! From that rudimentary discussion, our analytical frameworks have evolved significantly to accommodate a more accurate and nuanced depiction of the structure and effects of digital markets, attributable in no small part to Neo-Brandeisian scholarship. Their scholarship has explained how the conduct of Big Tech firms like Amazon, Google, Facebook, etc. constitute antitrust violations. In addition to developing and popularizing these analytical frameworks, this literature provides ready blueprints to be used by enforcement agencies in their complaints. The gradual sophistication of courts and regulators as they are becoming more conversant with the realities of digital markets is evident in the Google decision as well with the court delving into issues of default bias, stickiness, choice friction, etc.

While at first glance the decision seems to be an unconditional victory for the Neo-Brandeisian movement, on closer scrutiny, there are some important qualifications to this success.

Neo-Brandeisian agenda to recast the law and effect a normative shift

The Neo-Brandeisian movement is ultimately an exercise in ideological and legal revival – reviving the original goals of antitrust (shifting from narrow notions of ‘consumer welfare’ to original broader goals), restoring the dormant legal and analytical antimonopoly tools (such as essential facilities doctrine, merger review, and others), and reclaiming the substantive and procedural regulatory powers (like FTC’s policymaking and quasi-legislative powers). Thus, initiating more enforcement actions is only the first step in the New Antitrust movement’s strategy. Their ultimate goal is to undo decades of enfeebled antitrust jurisprudence and recast the law in line with a much more progressive and expansive antitrust mandate. And on this metric of recovering and recasting the law, the Neo-Brandeisian performance as evidenced by the Google decision has been less encouraging. Three details in the Google decision are indicative: 1) Conformity to existing legal precedents and no expansion of presumptions of illegality; 2) Continued prominence of economistic methods and consequentialist goals; and 3) The adverse finding on duty-to-deal.

1. Conformity to existing legal precedents and no expansion of presumptions of illegality.

The Google decision doesn’t recast the law. It applies the existing (and relatively uncontroversial) exclusive dealing framework from U.S. v. Microsoft which requires the plaintiff to prove: 1) the defendant’s monopoly power in the relevant market, and 2) anticompetitive effects resulting from the challenged conduct. If this prima facie case is made out then the burden shifts to the defendant to offer procompetitive justifications for its conduct. Such a legal standard which requires proof of anticompetitive harm under a detailed rule of reason analysis (as opposed to per se analysis) is uncontroversial even amongst Chicago and Post-Chicago scholars. The bolder Neo-Brandeisian claim which distinguished it from its Chicago and Post-Chicago predecessors relied on pushing back against neoclassical price theory (that relied exclusively on short-term price increases or output reduction as proof of anti-competitive harm), the incessant expansion of the rule of reason (which made proving antitrust violations extremely difficult), and the reinstatement of presumptions of illegality for some types of conduct (for example, where monopoly product harmed structures of competition).

Google’s exclusive agreements could have been a worthy candidate for this project of restoring presumptions of illegality. Google was shown to: 1) possess monopoly power in the market for general search, and 2) enter into exclusive agreements. And yet the court went into a detailed analysis of the anti-competitive effects of the challenged conduct. This was a good opportunity for the DOJ to at least try to cast one type of unilateral conduct i.e., exclusive agreements by a monopolist as per se illegal but this exercise in legal recasting didn’t occur. Instead, the court repeatedly emphasizes that exclusive agreements even when entered into by a monopolist are not per se illegal.

2. Continued prominence of economistic methods and consequentialist goals.

Another distinguishing precept of the Neo-Brandeisian movement is that it rejects claims that the economisation of antitrust and its increasingly technocratic nature has made the discipline more objective, apolitical or precise. Instead, they demand that antitrust analysis should account for a much more diverse range of economic and non-economic factors, for instance, by assessing the effects of monopoly power on inequality, innovation, democracy, power, labour, etc. The intellectual pluralism of the Neo-Brandeisians, which looks beyond economics to the methodologies of other social sciences and emphasizes the role of law in shaping the relationship between politics and economy, places it firmly within the larger intellectual movement of Law and Political Economy. The Google decision, however, is not intellectually plural. Economic analysis continues to dominate the court’s reasoning, although the nature of this economic analysis has become more nuanced and sophisticated.

In keeping up with the changing times, there was not a single reference to ‘consumer welfare’ in the entire judgement, and the assessment of anticompetitive effects was also not steeped in neoclassical price theory but instead looked at the impact of the conduct on the structure of competition (foreclosure and exclusionary effects). Nevertheless, the underlying legal standard or even the goals of antitrust assessment did not change in the Google case -- antitrust analysis as applied in this case continues to be what Pasquale & Cederblom call ‘consequentialist’ (“in which decisionmakers prioritize the predicted consequences of action and inaction over the characteristics of the action itself”). They claim that a rejection of consequentialist goals and exclusive reliance on economics (or economistic consequentialism) is the distinctive feature of the New Antitrust movement. Instead of looking at price and output effects, the court in Google looked at proof of foreclosure or exclusion. But their analysis continued to be a consequentialist one. Despite a consequentialist analysis, the ruling was in favour of the government because the anti-competitive consequences (of foreclosure) of the challenged conduct were abundantly clear. While the Google decision epitomizes a more sophisticated and nuanced analysis of digital markets, it does not mark a break from economistic consequentialism.

3. Adverse finding on duty-to-deal

Hidden towards the end of the judgement is the one count on which the court sided with Google, namely ‘duty-to-deal.’ While the court found in favour of the government on all other counts, the one count on which the court sided with Google was probably the most jurisprudentially significant. The facts for this count are complicated but in essence, the plaintiffs alleged that Google through its search engine management tool (SA360) failed to integrate some features for Microsoft Ads which it had already integrated for Google Ads. This feature disparity had the anti-competitive effect of advantaging Google’s own ad platform over Microsoft’s. While assessing this allegation the court concluded that even a monopoly like Google has no ‘duty to deal’ or offer equal treatment to rivals like Microsoft.

As Erik Hovenkamp notes, the doctrine of ‘duty to deal’ is “one of the most confounding and controversial subjects in antitrust law” and yet most antitrust allegations against Big Tech companies involve thorny refusal-to-deal questions. For instance, allegations of Google favouring its own verticals like YouTube or Google Flights on its search engine, Apple and Google favouring their own apps on their app stores, Amazon preferentially treating its own private labels on the marketplace, Facebook denying API access to competitors, etc. all involve claims of refusal to deal or discriminatory dealing. The success of refusal-to-deal claims was already an uphill task due to the Supreme Court’s judgement in Trinko which all but abandoned the duty-to-deal doctrine. Antitrust scholars like Khan, Hovenkamp, Vaheesan, Guggenberger and many others have attempted to reconceptualize and revive the essential facilities doctrine.

In the Google case, the Court had an opportunity to rely on some of this scholarship to revisit the doctrine (even if within the confines of binding legal precedent) but unfortunately, the court dismissed any attempts to distinguish Trinko and upheld its strict limits. While few other Big Tech antitrust cases involve exclusive dealing agreements of the sort which was found anti-competitive in the Google case, most Big Tech cases involve some version of refusal to deal or discriminatory dealing allegations. Therefore, the court’s adverse finding on this count is a cause for concern. This failure to revive the ‘duty to deal’ doctrine bodes ill for what is expected to be one of the central regulatory tools of the Neo-Brandeisian movement. The inability to shift the needle on the legal standards of Trinko is also damaging for the broader Neo-Brandeisian agenda of restoring and recasting the law.

A Neo-Brandeisian victory which looks a lot like Post-Chicago

The Neo-Brandeisians weren’t the first to challenge the presumptions of the Chicago School. Post-Chicago scholars have for long critiqued the Chicago School claiming that its scholarship was too theoretical and un-empirical. However, their critique of the Chicago School was modest. They continued to operate within the normative paradigm of ‘consumer welfare’ and viewed law and economics as the primary lens for antitrust analysis. Their economic models were more nuanced and empirical, for example, by embracing behavioural economics and game theory. Although both Neo-Brandeisians and Post-Chicagoans are united in demanding antitrust regulation of Big Tech, Neo-Brandeisians like Lina Khan have vigorously distinguished themselves from Post-Chicago scholars by rejecting the normative and ideological paradigm of the Chicago School. The Google decision, by using predominantly economistic tools and pursuing consequentialist goals, seems more aligned with Post-Chicago rather than Neo-Brandeisian principles.

The economistic and consequentialist nature of the Google decision might reflect an intellectual and ideological movement undergoing inevitable evolutionary mutation within the confines of the rigid formalistic court processes where the accommodation of a multi-disciplinary analytical framework strains imagination. Alternatively, it could be a part of the litigation strategy to increase the chances of a courtroom victory. As Post-Chicago scholar Jon Baker notes, “the prospects for litigation success in antitrust…..are enhanced by framing cases in economic terms and making economic arguments supported by economic evidence.” Therefore, he urges Post-Chicagoans and Neo-Brandeisians to find common ground in order to mobilize support for antitrust reform and push back against a conservative judiciary. Notwithstanding, whether the Google decision indicates an intellectual movement undergoing evolutionary mutation or is part of the litigation strategy to secure courtroom victory – it seems clear that the Google decision is a Neo-Brandeisian victory won on Post-Chicago terms.

Conclusion

When assessing the Google decision against the metric of recasting the law or changing legal standards, two caveats are necessary: 1) a District Court is limited in its ability to recast the law or render creative interpretations to established legal tests, and 2) Rome wasn’t built in a day – an intellectual movement to reshape decades of jurisprudence and recoup large swathes of lost regulatory power will undoubtedly take more than a single District Court judgement.

The aim of this essay is not to understate the successes of the Neo-Brandeisian movement which have undoubtedly been numerous. The objective is to remind Neo-Brandeisian scholars and enforcers to not lose sight of the essence of their movement amidst court victories and to advance their project of reviving legal standards and effecting a normative shift, especially as this decision goes through the appellate stages. Many intellectual and ideological movements have been lost to the processes of evolutionary mutation or compromises forged in the wake of litigation strategy, and have ended up being indistinguishable from their predecessors. The New Antitrust movement must tread carefully to avoid such a fate.