The US Federal Court’s ruling on Google could be the first domino in a long overdue reckoning on how major platforms operate
On August 5, 2024, the US Court for the District of Columbia (DC) decided that Google was a monopolist, meaning it has durable market power as the dominant player in its field of “general search services”. This is a violation of competition law.
As a remedy, the DC Court may seek Google search neutrality, requiring it to make its search results transparent. But this decision seems unlikely to be the harbinger of a strongly regulated Federal Search Commission, or even a better search experience.
Fines will have no effect on Google, or its peers Apple or Amazon—each of whom is facing major cases of their own.
When a company is as rich as Croesus and can employ every competition law firm in the world to appeal decisions, that will not worry the boardrooms.
What will worry them is being forced to interoperate their systems with those of smaller, more innovative and cybersecure rivals.
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When consumers can send a message from their iPhone to any platform, not just iMessage, just as you can with email or text messages, that will scare Apple into compliance.
The US Department of Justice is seeking interoperability as the remedy in the case against Google, and hopefully also for Apple and Amazon. It’s not a magic bullet, but it is the most pro-competitive position short of breaking up these vertically integrated platforms.
In the 1990s, American legal scholar and activist Lawrence Lessig called to break up Microsoft, which is still the most profitable of all the tech giants. Instead, the regulators in the US and the European Union imposed some interoperability, though they botched the details so benefits to consumers were restricted, despite record fines imposed.
In 2024, there is less appetite to break up the behemoths, but some to impose interoperability, which regulators now understand much better than in the 1990s.
In the EU, the Digital Markets Act 2022 has imposed interoperability on those platforms since 2023, though it is imperfectly implemented as yet, with teething troubles in the EU unit responsible for enforcement.
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How we got here
In 2008, law professors Oren Bracha and Frank Pasquale critiqued the fast emerging monopoly on internet search by the “do no evil” Stanford start-up turned billion-dollar company, Google.
That year, Barack Obama—the “Blackberry candidate” addicted to his smartphone—was elected the 44th President of the United States in what was known as the “Facebook Election” for his team’s revolutionary online campaigning.
Obama’s technology policy was dominated by a commitment to network neutrality, declared in a Googleplex Talk in Silicon Valley in late 2007, when he was mentored by his old University of Chicago Law School colleague—Lawrence Lessig.
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Lessig had been a Special Master in the Justice Department prosecution of the Microsoft software-into-Internet browser competition case. He praised Obama for finally ensuring net neutrality in 2014, against the wishes of the Republican-controlled Congress.
Google supported the Obama network neutrality policy and he failed to adopt the congruent Pasquale policy of search neutrality.
Why did the Democrats take so long to tackle Google? They tackled the Global Financial Crisis immediately after taking office and repaired the global economy at the cost of creating a moral hazard by telling Wall Street banks they were too big to fail (proved by letting Bear Stearns fail and watching global markets meltdown).
By 2015, these banks underwrote Donald Trump’s revolutionary bid for the White House, a campaign which benefited from free coverage from cable news and some Facebook advertising fuelled by Cambridge Analytica, itself funded by billionaire hedge fund manager Robert Mercer and his daughter Rebecca.
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Meanwhile, Google, Facebook, Apple and the other big tech firms including Amazon, were moving from billion-dollar companies into trillion-dollar companies, raised by their voracious appetite for swallowing smaller rivals such as LinkedIn and Skype (Microsoft), AdSense and Motorola (Google), WhatsApp and Instagram (Facebook).
Obama’s Department of Justice and Federal Trade Commission (FTC) waved through all of these mergers, with economists claiming that the price of free service was vertically integrated advertising-funded platforms.
They also blocked moves towards a new federal privacy law, despite a valiant attempt by US academic Danny Weitzner to achieve a basic legislative standard.
This period of laissez-faire unregulated growth created the unregulated Silicon Valley monstrously dominant platform environment of the Trump presidency.
Economists even hailed such monocultures as a healthy wealthy outcome, despite the huge cybersecurity liability they created.
If Google does get broken up, what will it mean for all of us? (Photo by Justin Sullivan/Getty Images)
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