The Trump administration’s lawsuit against Google doesn’t live up to the hype. Early reports suggested a bipartisan group of state attorneys general might join together with the feds and demand the company’s breakup. Instead, the eleven AGs who joined in are all Republicans, and breakup talk is thus far limited to a brief mention that “structural” remedies could be an option.
The core allegation here is that Google has a monopoly over Internet searches and the accompanying advertising — with a roughly 90 percent share of web searches in the U.S. — and illegally maintains that monopoly through numerous business practices. For instance, Google has paid billions of dollars to other companies for the privilege of being the default search engine on various mobile devices and web browsers. These agreements make it even harder than it would be otherwise to compete against Google for search traffic.
This is not a frivolous suit with zero chance of success. Google’s actions here bear a resemblance to the behavior that got Microsoft hauled into court 22 years ago, and it may well lead to a similar result: lots of legal wrangling followed by a settlement in which the company scales back the sketchiest parts of its business model but doesn’t lose too much of value. Such a result would, frankly, not be the end of the world.
But is this a good suit, one that serves the country’s best interests? That is less clear, especially if the government eventually does pursue drastic measures such as a breakup.
American antitrust laws are broadly written, and the prevailing legal standards have changed over the years. The dominant and most economically sensible approach to enforcing these laws, however, remains the one that Robert Bork laid out in the 1970s: “Anticompetitive” behavior becomes a problem when it harms consumer welfare.