Sunday, August 18, 2024

Google monopoly ruling shows 19th-century law can police Big Tech. (WaPo)

Nearly 130 years old, our antitrust laws must be enforced without fear or favor of cartels, wherever they exist.  Google, Facebook, Amazon, Gannett and other cartels are a threat to democracy and free market principles.  As John Kenneth Galbraith said, "'the market' is a snare and a delusion.

I was drawn to investigate cartel behavior and its effect on people, profits and power.  At age 20, in 1977 I helped Tennessee U.S. Senator James R. Sasser with what became section 742 of the Powerplant and Industrial Fuel Uses Act of 1978,

In 1978, at age 21, the Fund for Investigative Journalism supported my investigative reporting on the U.S. Tennessee Valley Authority and its sweetheart relationship with a Northeast Tennessee coalfield monopoly and identical bids unquestioned by TVA?  I still want to know, as Chief Judge Nahum Litt would have me ask, "Qui bono?"  ("Who benefits?").  Senator HOWARD HENRY BAKER, JR., later REAGAN's White House Chief of Staff and later Ambassador to Japan.  Senator Baker's 40,000 acres of family coal, oil and natural gas mineral land was being mined and burned at TVA's Kingston powerplant.  TVA bought and paid for low-qualify coal, "layerloaded" in coal trucks, chock full of ash, slag, dirt, rocks, dead rabbits and other mine site debris, documented in 1975 by Ben A. Franklin in The New York Times and by Ann Powell of WBIR.  In 1977, I watched from the Senate staff gallery as Senator Baker won voice vote approval of a rider exempting the Kingston plant from Clean Air standards, allowing its tall stacks to count as an anti-pollution feature, as the pollutants wafted to the north. Kingston was later the site of a massive coal ash spill that ruined homes and required a massive cleanup, with massive cleanup worker exposures due to TVA's willful, wanton recklessness and indifference to worker rights. During my investigation, I interviewed coal operators, TVA employees, journalists, activists and lawyers, including Harvard University antirust law professor Phillip Arreda (for whom several Harvard buildings are now named).  Yes, my friends, I took Greyhound and Trailways busses from Washington, D.C. to Knoxville and Nashville, carrying antitrust law books in my backpack and hope in my heart.  

HOWARD BAKER was nearly named to the Supreme Court by President RICHARD MILHOUS NIXON See John Wesley Dean, III, The Rehnquist Choice, inter alia reporting that BAKER did not get the nomination because he delayed responding to Nixon, as he consulted with his banker, et al. in Knoxville about his business interests. In college and law school, I dreamed of being an antitrust prosecutor.  Then RONALD WILSON REAGAN, ROBERT BORK* and other corporate shills worked to eviscerate our antitrust laws, which forbid "every contract, combination or conspiracy in restraint of trade."  The late Senior Special Agent Robert E. Tyndall, an EPA Inspector General investigator, spent eight (8) years on an investigation of the ductile iron pipe industry, only to see it squashed by RONALD REAGAN's pro-monopoly policies.

* Luckily REAGAN's later Supreme nomination of  anti-antristust ROBERT BORK was defeated 58-42, thanks to then-Senator Joe Biden's indefatigable organized opposition.  Thanks to Joe Biden, who helped defeat BORK and who appointed antirust law enforcers with renewed support for FTC and DOJ: our government now has new hope of enforcing our antitrust laws, with FTC and DOJ benefitting from new leadership.  Three cheers!  From The Washington Post: 

 

Google monopoly ruling shows 19th-century law can police Big Tech

The first big tech-sector anti-monopoly ruling in a generation challenges the idea that the internet era has outgrown U.S. antitrust law.


Monday's ruling that Google is a monopoly is the first outcome in a series of cases underway against tech giants including Apple, Meta and Amazon. (Erik S Lesser/EPA-EFE/Shutterstock)

SAN FRANCISCO — A federal judge’s ruling that Google broke the law to maintain a monopoly in search has dealt a blow to one of Big Tech’s main arguments against regulation: that America’s antiquated antitrust laws aren’t flexible enough to address the fast-changing nature of tech innovation.

On Monday, Judge Amit Mehta of the U.S. District Court for the District of Columbia wrote in a 277-page decision that Google had broken Section 2 of the Sherman Act, a law signed into effect by President Benjamin Harrison in 1890.

The ruling was the first major antitrust ruling against a Big Tech company since a federal court ruled against Microsoft in 2000 for maintaining a monopoly through its operating system. Since then, Google and a small handful of other firms have become titans of the internet age, pulling in revenue never before seen in the history of business and touching the lives of billions of people every day. For most of the past 20 years, the U.S. government has encouraged their growth, rarely intervening in acquisitions or launching antitrust lawsuits against them.

That has changed in recent years, as politicians, regulators, smaller competitors and consumers have become more critical of Big Tech’s power. This court case is the first in a series that have been launched against Google, Meta, Amazon and Apple, all of which have pushed back. In its defense in this case, Google argued that the rapid evolution of the internet, including the rise of TikTok and the artificial intelligence boom, meant that the company did not have a monopoly. Even Google competitors and critics who welcomed the government’s lawsuit worried that Washington didn’t have the tools to constrain tech giants.

“The one lesson I take from this is that antitrust law has a lot of flexibility in it. It seems able to accommodate dealing with these large companies,” said Neil Chilson, who previously served as the Federal Trade Commission’s chief technologist and is now head of AI policy at the Abundance Institute, a tech think tank.

For decades, most judges and antitrust experts subscribed to a view of competition law that focused on whether company behavior increased prices for end consumers. Big Tech products such as Facebook’s social network, or Google’s Gmail or search engine, didn’t come under scrutiny because they were free for regular people to use. But as the companies acquired competitors, grew rapidly richer and became gatekeepers to the internet, some scholars argued that the consumer price-focused approach to antitrust needed to be revolutionized.

Politicians also began souring on Big Tech as concerns grew in the late 2010s about social media’s impact on polarization and children’s mental health. While lawmakers were previously loath to be seen as anti-tech or anti-innovation, Silicon Valley has more recently become a popular political punching bag for people from both parties.

The investigations into Big Tech began under Donald Trump’s administration, as tech CEOs were repeatedly hauled in front of Congress to answer questions on misinformation, competition and alleged bias. Trump’s Justice Departmentsued Google in October 2020, and the department continued the lawsuit after Biden took power, culminating in last fall’s trial and Monday’s ruling against the company.

Many Big Tech critics were thrilled about Mehta’s decision, suggesting it bodes well for prosecutors in pending Big Tech antitrust cases and bolsters the argument that internet giants are using their dominance to stifle competition in emerging technologies. Nidhi Hegde, interim executive director of the American Economic Liberties Project, a think tank that has advocated for more aggressive antitrust enforcement, called it “a resounding signal that the anti-monopoly movement is here to stay.”

The Justice Department’s antitrust lawsuit against Apple bears some similarities to the Google search case, alleging that the tech giant uses its prominence in smartphones to control app developers. But as with the Google case, much will depend on how the court defines the relevant market — as the tighter iPhone ecosystem or the broader smartphone market in which Apple is one of multiple rivals. Apple has said it would “vigorously defend” itself in the case and has sought to have it dismissed.

The Federal Trade Commission has also filed antitrust lawsuits against Amazonand Meta. The agency is challenging the online retailer over the fees it charges merchants on its marketplace, while it argues in the Meta case that Facebook has quashed competition, especially by buying rivals Instagram and WhatsApp. Both companies have promised spirited defenses and say they aren’t monopolies. (Amazon founder Jeff Bezos owns The Washington Post.)

“This decision generates momentum for those other cases in the coming months,” said Notre Dame Law School professor Roger Alford, who is consulting for state attorneys general in a second anti-monopoly case against Google, involving its role in the digital advertising market.

But other antitrust experts say Mehta’s decision itself is not likely to have such influence. “Antitrust cases are so case-by-case,” said Sam Weinstein, a professor at Cardozo School of Law and a former Justice Department antitrust lawyer. “What happens in a Google case will have very little bearing on what happens with a Facebook case or an Amazon case.”

Google has already said it would appeal Monday’s ruling to the U.S. Court of Appeals. A ruling from that court could have a more widespread effect on how judges around the country think about antitrust and Big Tech, Weinstein said. “That’s going to be a very important decision.” If Google loses there, it could try to get the matter before the Supreme Court.

However Google fares in any appellate court, the judgment will be grounded, like Mehta’s, in the body of antitrust law that has grown up over more than 130 years. U.S. lawmakers have periodically proposed updating legislation to specifically address new internet technologies. Such efforts have never drawn enough backing to pass into law.

Gerrit De Vynck is a tech reporter for The Washington Post. He writes about Google, artificial intelligence and the algorithms that increasingly shape society. He previously covered tech for seven years at Bloomberg News. Twitter
Eva Dou is a Washington-based reporter covering technology policy for the Washington Post. A Detroit native who studied journalism at the University of Missouri, she reported on business and politics in Asia for a decade. She is the author of the forthcoming book House of Huawei: The Secret History of China's Most Powerful Company. Twitter

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