By Ronan Dunne & Philip Lee
As a staunch Trump ally, former Attorney General Bill Barr will be remembered for a lot of things. His role in the redaction, and then subsequent disclosure, of the Mueller report and his interventions in cases involving Trump associates spring to mind. However, perhaps his legacy will be something entirely different, with wider ramifications for citizens across the globe, far beyond the Washington political bubble.
Under Barr’s watch, the US Department of Justice (DoJ) initiated a major lawsuit against Google in October for alleged violations of US competition law. Announcing the action, Barr said this was “a monumental case both for the Department of Justice and for the American people.”
The DoJ’s case has been taken in conjunction with 11 state Attorneys General (including the likes of Florida, Georgia and Texas). It is a civil antitrust lawsuit which alleges that Google has unlawfully maintained monopolies through anticompetitive practices in the search and search advertising markets.
The significance of the DoJ’s action cannot be underestimated. Google is one of the wealthiest corporations on the planet with a market value of over US$1 trillion. In announcing the action, Barr threw down the gauntlet to Google saying the “lawsuit strikes at the heart of Google’s grip over the internet for millions of American consumers, advertisers, small businesses and entrepreneurs beholden to an unlawful monopolist.” He compared the lawsuit with the historic antitrust actions taken against AT&T in 1974 and Microsoft in 1998.
Barr’s references to AT&T and Microsoft are significant. This is the first time that the US has initiated court action against a major tech company since Microsoft in the late 90s. While Microsoft was able to cut a deal that left its business intact, the same cannot be said for AT&T. The Bell System of companies, led by the Bell Telephone Company and later by AT&T, had dominated telephone services in the USA for over a century before it was broken up in the early 1980s as a direct consequence of the DoJ’s actions.
Could a similar fate befall Google? That is the great unknown at this stage. The DoJ has stated that “nothing is off the table”. But the litigation is likely to drag on for years at a minimum. A settlement may, ultimately, suit all parties. That’s unlikely to lead to a break-up of Google, though divestments of specific business functions cannot be ruled out. It is too early to tell how the chips will fall.
The action does, however, mark a turning of the tide against the US tech titans which, up until now, had seen antitrust action concentrated in Europe. The early years of the Trump administration were set against a backdrop of global trade wars and increasingly protectionist policies. The Google lawsuit reflects a clear departure from those days, in a direction that is only likely to continue under president-elect Joe Biden. Indeed, early December saw further lawsuits filed by the Federal Trade Commission (FTC) and over forty states against Facebook. These proceedings accuse Facebook of buying up rivals to suppress competition. DoJ and FTC investigations into Amazon and Apple are also ongoing, reflecting the growing bipartisan support in the US for action against Big Tech.
