DOJ, States: Court Must Weigh Google's Entire Conduct in Antitrust Case
Don’t look at Google’s anti-competitive actions in isolation when considering if there's a Sherman Act violation, said DOJ, states and amici in recently posted filings at the U.S. District Court in Washington (case 1:20-cv-03010). They opposed Google seeking summary judgment to avoid trial in the antitrust case. DOJ and states cited as precedent the 2001 decision in U.S. v. Microsoft at the U.S. Court of Appeals for the D.C. Circuit.
That decision “sensibly instructed courts to examine the cumulative effect of a defendant’s conduct in light of market realities,” said the plaintiffs’ joint Jan. 26 filing, posted in redacted form Thursday. The decision "analyzed the anticompetitive effect of each of Microsoft’s agreements in light of the others,” but Google inappropriately argues the court should analyze whether each of its acts in isolation violate Section 2 of the Sherman Act, they said.
Google wants the court “to resolve disputes of material fact by ignoring documents and deposition testimony demonstrating that Google has engaged in exclusionary conduct that harms competition and the competitive process,” DOJ and states said. Google has “durable monopolies” in general search services, with nearly 90% U.S. market share, plus in search ads (74%) and general search text ads (88%), they said. “Google has maintained and reinforced these monopolies … through a variety of anticompetitive tactics that deprive consumers and advertisers of the benefits of competition.” The D.C. Circuit’s Microsoft decision said “a monopolist cannot entrench its monopoly with exclusionary distribution agreements, including default and preinstallation agreements,” plaintiffs said.
“Google wages a campaign of misdirection,” said Colorado and other states in a separate opposition memo, which was corrected Feb. 9 and posted in redacted form Thursday. “Silent on evidence of misconduct that it apparently wishes not to defend, it vigorously defends the merits of conduct that is not challenged. It ignores the proof that the States will offer at trial to show that competition has been and is being harmed through the combined effects of anticompetitive distribution contracts, the operation of [Google Search Ads 360] -- by which Google inserts itself between its advertising rivals and critically important advertisers -- and the conduct it directs at selected specialized vertical providers … to degrade threats to its advertising revenues and limit competition in Relevant Markets."
"By neutralizing threats from all sides with mutually-facilitating and reinforcing conduct, Google limits the ability of rivals to mount a realistic challenge to its monopoly power and weakens the firms with which those rivals might partner to infuse the market with choice and greater innovation,” the states said. “There is ample evidence to support the States’ monopoly maintenance allegations, numerous genuine disputes of material fact, and clear errors of law in Google’s Motion, all of which preclude summary judgment and warrant sending this case to trial.”
The American Antitrust Institute said Google’s “divide and conquer approach ignores the Supreme Court’s directive to consider the whole of the alleged antitrust violation and not 'wipe the slate clean' after analyzing each component.” Google’s claim there can’t be a violation if each action alone doesn’t meet Section 2 criteria is “a danger to effective Section 2 enforcement,” the institute said in a proposed amicus brief filed Friday. "Defendant cannot avoid trial on the facts by invoking a patchwork of inapplicable caselaw on narrow exceptions to antitrust scrutiny.”
Being the default search engine can have anti-competitive effects even if alternatives exist, said behavioral economists George Loewenstein, Klaus Schmidt and Paul Heidhues in another proposed amicus brief Friday. "To overcome a default’s stickiness, non-default competitors must invest capital, above and beyond what would otherwise be required, to reach potential customers." The court should "reject any assertion that defaults’ stickiness depends on whether consumers are subject to an exclusivity clause,” the economists said. “Ignoring or discounting the effects of defaults as a matter of law could impede enforcement of the antitrust laws, including Section 2 of the Sherman Act.”