US antitrust case against Google mirrors Microsoft battle

WASHINGTON (AP) – The Trump administration’s legal assault on Google actually feels like a blast from the past.

The United States (US) Justice Department filed an equally high-profile case against a technology giant in 1998, accusing it of leveraging a monopoly position to lock customers into its products so they wouldn’t be tempted by potentially superior options from smaller rivals.

That game-changing case, of course, targetted Microsoft and its personal computer software empire – right around the same time that two ambitious entrepreneurs, both strident Microsoft critics, were starting up their own company with a funny name: Google.

Now things have come full circle with a lawsuit that deliberately echoes the US-Microsoft showdown that unfolded under the administrations of President Bill Clinton and President George W Bush.

“Back then, Google claimed Microsoft’s practices were anticompetitive, and yet, now, Google deploys the same playbook to sustain its own monopolies,” the Justice Department wrote in its lawsuit, filed on Tuesday in Washington, DC, federal court.

The Justice Department’s 64-page complaint accuses Google of thwarting competition and potential innovation via its market power and financial muscle. In particular, the US complaint alleges, Google sought to ensure its search engine and advertising network remained in a position to reach as many people as possible while making it nearly impossible for viable challengers to emerge.

Exhibitors work on laptop computers in front of an illuminated sign of the Google logo at the industrial fair Hannover Messe in Hanover, Germany. PHOTO: AP

US Deputy Attorney General Jeff Rosen described Google as “the gateway to the Internet” and a search advertising behemoth. Google, whose corporate parent Alphabet Inc has a market value just over USD1 trillion, controls about 90 per cent of global web searches.

The Mountain View, California, company, vehemently denied any wrongdoing and defended its services as a boon for consumers – a position it said it will fiercely defend in a case that seems likely to culminate in a trial late next year or sometime in 2022.

Eleven states, all with Republican attorneys general, joined the federal government in the lawsuit. But several other states demurred.

That dynamic raised questions about whether the timing of the government’s move is politically motivated, given that Election Day is less than two weeks away. President Donald Trump has also repeatedly attacked Google with unfounded charges that it is biased against conservative viewpoints in its search results and posted on its YouTube video site.

To avoid the appearance of political animus, Justice Department officials were under intense pressure to present a strong case against Google. Some legal experts believe regulators pulled that off. The Justice Department “filed the strongest suit they have,” said antitrust expert Tim Wu, a professor at Columbia University Law School. But he also believes the suit is almost a carbon copy of the government’s 1998 lawsuit against Microsoft.

Wu believes the US government has a decent chance of winning. “However, the likely remedies – ie, knock it off, no more making Google the default – are not particularly likely to transform the broader tech ecosystem.” he said via email.

Investors so far are betting Google will prevail – or at least that its business won’t be fazed by its tussle with the US government. Alphabet’s stock rose more than one per cent on Tuesday to close at USD1.555.93.

The Justice Department is primarily targetting Google for negotiating lucrative deals with the makers of smartphones and web browsers to make its search engine the default option unless consumers take the trouble to change the built-in settings.