Thursday, November 21, 2024

Google Is On The Antitrust Chopping Block, And Trump Probably Won’t Save It

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Trump’s re-election may be an overall boon to Silicon Valley giants wary of aggressive competition enforcement. But he may have a more hands-off approach with Google’s legal battle, already years in progress.

By Richard Nieva, Forbes Staff


In 2020, then-President Donald Trump made history when his Justice Department filed a landmark antitrust lawsuit against Google, alleging the tech giant held an illegal monopoly in the online search market — the first major competition case of the internet era.

Now, as Trump returns to power, there has been optimism in Silicon Valley that his administration would take a softer line with tech competition, after years of aggressive enforcement in the Biden era. But antitrust experts told Forbes that while Trump may generally loosen the federal government’s grip regarding tech antitrust, it may do little to help Google.

“Google can’t derive much comfort from the election results,” William Kovocic, a former FTC chairman and now a law professor at George Washington University, told Forbes. “I think those federal efforts would carry on.” George Hay, an antitrust professor at Cornell Law School, argued similarly that it’s unlikely for Trump to pull the plug, especially since his administration was the one to first bring the case. “The horse is out of the barn,” he said.

Google declined to comment.

The tech giant’s search monopoly case went to trial last year. During proceedings, the federal government argued that Google signed illegal contracts with device makers to force Google products onto consumers. The cornerstone of the DOJ’s case was an agreement with Apple worth tens of billions of dollars that made Google the default search engine on iPhones and other Apple products. Google has said its dominant position comes from the quality of its products, arguing it gives consumers easy options to change their defaults. In October, a federal judge ruled against Google, triggering a second trial to determine potential remedies, like banning those types of contracts, or, on the extreme end, breaking up the company. That trial is slated to begin in April. Google has said the government’s initial potential requests, filed last month, “go too far.”

Trump suggested he was skeptical that a breakup of the tech giant would be the right move, wondering if it would “destroy the company.”

As president, Trump will have the authority to direct the DOJ to stand down on cases like Google’s if he chooses, or suggest what he sees as appropriate punishment. But asking the DOJ to back off would be an extremely rare move with huge political implications, said Kovocic, one which many presidents would be unwilling to make because it would undermine their antitrust officials. (One of the only examples of the federal government dropping an antitrust case came in 1982, when the DOJ ended a 13-year-long case against IBM that called for a breakup, because the government’s case was “very weak” and had little chance of winning, the agency said at the time.)

Even Trump, who regularly breaks precedent, might be unwilling to step in because of his personal frustrations with Google, said Kovocic. In September, Trump said he would prosecute the company for “illegally” only showing “bad stories” about him, and positive ones about his election opponent, Vice President Kamala Harris. The complaints followed a familiar refrain from conservatives that has for years falsely claimed big tech censors voices on the right.

However, at an Economic Club of Chicago event in October, Trump suggested he was skeptical that a breakup of the tech giant would be the right move, wondering if it would “destroy the company” and give China an opening for a technological advantage. “What you can do without breaking it up is make sure it’s more fair,” he said.

The other federal case against Google, which is focused on its advertising tech business, hasn’t wrapped up yet. The government argues that Google has illegally abused that market, driving up ad prices, in part through its 2008 acquisition of the startup DoubleClick, which became the foundation of its sprawling digital ad operation. Google has said there is plenty of competition in the market from rivals like Meta and Amazon, and that the cut Google takes from ads is only slightly higher than the industry average. Google and the government wrapped up their cases in September, and closing arguments are scheduled for November 25.

“There’s a new populous bent within the Republican Party.”

Mark Wagoner, Schumaker Advisors

The questions over Trump’s antitrust approach come as he has stormed back to the White House with ample support from Silicon Valley, including Tesla CEO Elon Musk and Andreessen Horowitz founder Marc Andreessen. Even big tech leaders who were critical of Trump in the past have made subtle overtures this time around. Meta founder Mark Zuckerberg called him a “badass” after surviving an attempted assassination in July. Amazon founder Jeff Bezos, who owns the Washington Post, stopped the newspaper from endorsing Vice President Kamala Harris, in what was seen by some as an attempt to avoid retribution by Trump.

Pichai has apparently also tried to make inroads with Trump. Less than two weeks before the election, Trump called him a “great guy” on the “The Joe Rogan Experience” podcast, claiming Pichai had called him to say his campaign stop at McDonald’s, where he worked the fryer and drive-thru window, was “one of the biggest things we’ve ever had on Google.”

But even such courting from billionaire tech leaders may not politically motivate Trump to make a change, since his working class base may prefer a crackdown on big tech. “There’s a new populous bent within the Republican Party,” said Mark Wagoner, an antitrust attorney at the firm Schumaker Advisors. “I don’t foresee any seismic shift in strategy.”

Whether or not Trump would intervene with a Google breakup may be a moot point. The Justice Department has listed breaking up the company — or forcing a divestment of certain businesses like its Android mobile operating system or Chrome web browser — as one of many remedies it’s considering. Antitrust experts told Forbes they think a breakup is not a realistic outcome, but instead a negotiation tactic to make Google concede some less extreme measures, such as sharing more data with third parties.

Trump has reportedly tapped Gail Slater, an aide of Vice President-elect JD Vance, to advise his transition team on antitrust policy. Slater — who previously held executive roles at Roku and the Internet Association, a defunct industry trade group — will also help select Trump’s replacement for Lina Khan, the Biden-appointed FTC chair who aggressively fought to reign in big tech.

Even if the Trump administration takes a step back on other antitrust issues like merger scrutiny, it may be too late for Google, said Wagoner. The company’s biggest window to help itself was back when Trump was first in office, before the 2020 Justice Department lawsuit that opened the floodgates. “The strategy is always to fend off the filing itself,” he said. “Once the case has been filed, it changes the dynamics of your ability to get it resolved.”

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