Antitrust Issues

In August of 2024, which perhaps feels like more than a lifetime ago for observers of American politics, Judge Amit P. Mehta found Google to be in breach of U.S. antitrust law. “After having carefully considered and weighed the witness testimony and evidence,” Mehta wrote in the decision, “the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly.” This was, in antitrust law terms, kind of a big deal. Google had categorically lost on liability; the next step was for the judge to work out how this should be remedied.

Julia Angwin wrote in a justifiably optimistic spirit for the New York Times about how this marked a potential sea change in the regulation of Big Tech. “It’s easy to miss it amid the nonstop avalanche of news, but we are on the cusp of a technology revolution—one that could usher in an entirely new information landscape,” she wrote this June. Noting that this initial liability decision was early in a wave of judgments due from courts that were to consider the market power and conduct of the industry, she observed that “finally, our courts are beginning to push back.” No doubt part of this was a sense that courts might be among the few public institutions robust enough to have withstood terrorizing by DOGE and the like, which had ravaged government departments and services across the country since Trump returned to the White House.

Google braced itself for the worst. Apple, Meta, and Amazon contemplated their futures.

But did this pushback turn into a back off? This September, the court shied away from imposing the most serious of penalties as a consequence of its initial ruling. Judge Mehta decided against forcing Google to divest itself of Chrome—a step some had advocated. He did bar Google from making exclusive contracts relating to the distribution of Google Search, Chrome, Google Assistant, and the Gemini app; but he did not ban it from making payments for preloading or placing these apps on devices. He required some sharing of technical information and disclosure of search data by Google with relevant competitors. Part of the justification for this underwhelming set of remedies was the possible impact of generative AI tools on Google’s search dominance: “GenAI chatbots are not yet close to replacing [general search engines],” the decision reads, “but the industry expects that developers will continue to add features to GenAI products to perform more like [general search engines].”

The upshot: Google will be required to open their search technology to competitors in a limited way, while leaving the distribution network in place that entrenched their dominance in the field. The judgement figures that this will do the heavy lifting of the court’s twin objectives of “denying the fruits of the violation” and “ensuring that anticompetitive behavior will not recur in the same or related ways.” The problem is that, ironically, this distribution network for Google search is the same infrastructure that will likely be used to generate monopolistic power in the market for GenAI products like Gemini. This network is worth billions to multiple Big Tech companies that share in revenue generated by search in exchange for making Google the default search product on their devices. The most obvious example is the tens of billions that flow each year from Google to Apple. Both companies mutually benefit: Google through ad revenues and a growing and protected user base, Apple from being paid to make Google the default in Safari.

In the space of a year, the fate of Google went from downcast to cautiously optimistic. Res ipsa loquitur: the share prices of both Apple and Google bounced in response.

It feels quaint to remember this, but in 2019 there were billboards around San Franscico calling for the breakup of Big Tech. The resentment among Democrats for the ways in which social media had facilitated the electoral success of President Trump (whether real or imagined), had, among other things, made criticism of centralization within the industry the norm—on both sides of the aisle. This was confirmed with President Biden’s appointment of Lina Khan to the top job in the Federal Trade Commission. What followed was significant regulatory activity against major technology companies. While not without controversy, Khan applied significant scrutiny to mergers, an expansive understanding of the harms generated by market concentration and, by association, the necessary remedies that might be required.

Her Trump-appointed replacement, Andrew N. Ferguson, marks a distinct shift. A documented dissenter to Khan’s approach, he couldn’t have been clearer in a statement issued in January: “The Biden-Harris FTC has no future.” And then, of course, on the day of the inauguration itself, a rogue’s gallery of toady tech executives were in attendance, more than happy to prostrate themselves before the president—signaling unity between corporate and state power. Things were looking up for Big Tech, an industry that now appeared to be a very long way from the regulatory heat of the Biden administration, let alone the progressive vision that dominated Silicon Valley during the Obama years.

President Trump has so far delivered: a litter of executive orders and memoranda arrived within days, which yelped about American tech dominance and swiped at perceived enemies with threats of trade sanctions. And yet, the union between Big Tech and Trump has not been without hiccups. After all, the case against Google for search dominance was issued under the first Trump administration. And Trump’s immigration reforms—including fees for H1-B visas—have become a source of tension for an industry reliant on skilled workers from abroad, not to mention how the president’s peripatetic approach to tariffs has caused unease within an industry with globally integrated supply chains.

When it comes to antitrust, not all of Silicon Valley is unified: Peter Thiel, probably the most influential billionaire outside of the administration, has flip-flopped on the issue. He once claimed that competition is for losers: “Creative monopolists give customers more choices by adding entirely new categories of abundance to the world,” he wrote in 2014, citing Google as an example. Fast forward five years, and he was claiming that Google is a traitor to the United States for its supposed closeness to China.

Antitrust policy has likewise never fallen neatly across the partisan divide. For Senator John Sherman, monopolies were a problem because they generated “a kingly prerogative, inconsistent with our form of government.” In 1890 when introducing his eponymous act, which became the key statute in American antitrust law, the Republican declared: “If anything is wrong this is wrong. If we will not endure a king as a political power we should not endure a king over the production, transportation, and sale of any of the necessaries of life.” But it was not until the early twentieth century that the field gained momentum, as the insidious power of trusts captured the attention of lawmakers. This prompted the creation of regulatory authorities, including the Department of Justice Antitrust Division and the FTC, which were granted the power to protect consumers and stamp out unfair business practices, including monopolistic behavior. In recent decades, as the tech sector has consolidated, antitrust has again come back into the public eye.

In his new job as head of the FTC, Ferguson has made it clear he is definitely up for some trust busting—only of a very specific kind, as he noted last December:

Censorship, even if carried out transparently and honestly, is inimical to American democracy. The Commission must use the full extent of its authority to protect the free speech of all Americans. That authority includes the power to investigate collusion that may suppress competition and, in doing so, suppress free speech online. . . . If our investigation reveals anti-competitive cartels that facilitate or promote censorship, we ought to bust them up.

The relationship between MAGA state power and Big Tech is, therefore, perhaps better understood as volatile attempts at mutual containment, underwritten by a common commitment to imperialist dominance. Navigating such complexity, as in any common cause of diverse actors, is not straightforward. It recalls the characterization by Marx and Engels of the modern state as “a committee for managing the common affairs of the whole bourgeoisie.”

This is not to say that Judge Mehta’s remedies to Google’s monopolistic behavior were shaped by this environment—but neither was the court immune to it. A Department of Justice fully under the sway of Trump may accept the substandard outcome in terms of remedies, content to defend any appeal rather than file one itself for the purpose of winning bolder remedies. Meanwhile, and especially in the febrile atmosphere following the assassination of far-right commentator Charlie Kirk, the FTC is more likely to focus on the weaponization of antitrust law in service to a culture of victimhood among conservatives centered on an inchoate conception of free speech. (It has already started, with Chairman Ferguson writing recently to Google about concerns that Gmail was blocking Republican fundraising emails as spam but not similar ones from Democrats.)

The concept of Big Tech is sufficiently malleable in the minds of many voting Americans that it can be cast simultaneously as being run by unaccountable, smug Californians, while also being America’s best bet to fend off potential Chinese overlords. When it comes to antitrust policy and regulatory action, Trump 2.0 might talk and even act tough on collusion that limits speech—while tolerating bullish centralization of industrial power in pursuit of AI dominance.

Google may have sidestepped a catastrophic outcome in its search case, but there will be more lightness of foot required. In April, Judge Leonie Brinkema of the Eastern District of Virginia ruled that Google illegally monopolized two digital advertising markets: the open-web display publisher ad server market and the open-web display ad exchange market. The hearing on remedies just concluded.

Meta faces a potential break-up in a case brought by the FTC for anticompetitive conduct, specifically in relation to the acquisition of WhatsApp and Instagram. Amazon cut its losses and settled a lawsuit brought by the FTC which alleged the company signed up users to Prime without their consent and made it difficult to cancel, but it still faces a case brought by the FTC for, you guessed it, anticompetitive conduct. The DOJ has sued Apple for monopolization of the smartphone market. Meanwhile, numerous other lawsuits are underway against Big Tech, including by private plaintiffs.

The outcomes of these cases, like the political history of antitrust law, is likely to be mixed. (Perhaps the only truth universally acknowledged is that it is a good time to be an American antitrust lawyer.) But it is also fair to say that in the absence of a functional Congress, and as long as a petulant tyrant occupies the White House, the judicial system remains one of the few formal institutions capable and potentially willing to hold Big Tech to account. U.S. courts will continue to have numerous opportunities to shape the future of the industry, should they elect to take them up. Big Tech executives have continued to kiss the ring for a reason.

For those actually concerned about corrosion of democracy that accompanies the concentration of economic power, the moment we find ourselves in presents several opportunities. We should not be content to leave our fate in the hands of courts—or Trumpian enforcers—but the evidence that comes to light via these judicial processes confirms that what passes for “innovation” from Silicon Valley is often just a function of big money. Companies experiment on users, and then seek to monetize whatever they can with a supercilious indifference to the harms that may come about. The business model of “seek forgiveness not permission” is nefarious and lawless, and is routinely used as a strategy to build anticompetitive moats. This is also the moment to lean into campaigns for privacy rights: structural separation of big firms simply may not cut it to address the problems in the tech sector, but disgorgement of data that drives and underpins these problems can help.

For regulators, lawmakers, and litigators in other jurisdictions, U.S. court cases provide the basis for local actions (even where the U.S. case fails). But progressives, including Democrats, might also need reminding of this in future. This is particularly urgent with respect to AI, where eye-watering sums are being spent by many Big Tech firms to capture the market. There seems to be an emerging consensus that this might be justified to “win the race” against other nations. Claiming some patriotic basis for leaning into the centralization of a dangerous and environmentally catastrophic industry is a treacherous form of loyalty.   

The tech sector is obviously wary of state power, and it is reasonable to imagine that any rational captain of industry would view the Stalinesque pageantry of the White House with a touch of unease. Nevertheless, the industry is becoming a patriotic and parochial version of itself to please an increasingly mercurial administration because tech is dependent on state power to support its domination of markets abroad, and it wants to continue experimenting with its products in a permissive environment. Perhaps they see the risk of minimalist antitrust enforcement as tolerable enough, especially if it can be deferred by interminable litigation.

But might this precarious balance start to tip if the terrain shifts? Despite ostensible commitments to “disruption,” the tech industry is heavily reliant on existing policies and protections, all of which are at the mercy of the whims of the White House. Would the tech industry feel the same if a court ordered a major break-up, and pleas for special treatment fell on deaf ears? The Republican movement itself feels at times as though it is held together by nervous energy that could dissipate or erupt at any given moment.

A particularly debased and avaricious brand of politics is here to stay—but the unity that we see around Trump is more brittle than it appears. There may well be a brand of right-wing politics that favors industrial cooperation in the face of challenges from abroad, and intuits the potential of a centralized sector for the purposes of influencing the information ecosystem. Whether such an approach could survive the incoming wave of antitrust decisions, and whether it could be squared with the anti-elitist rhetoric that currently powers right-wing politics are questions for which we might not need to wait very long for an answer.