These days, it doesn’t seem as if there is much a successful American tech company can do to avoid scrutiny from federal regulators. This is especially true since the rise of the “hipster antitrust” movement, spearheaded by the Department of Justice’s (DOJ) chief antitrust enforcer, Jonathan Kanter, and Federal Trade Commission Chair, Lina Khan. This movement wants to bring back aggressive antitrust enforcement by the federal government. Rather than being undergirded by sound legal principles, many of these enforcement actions seem taken for their own sake.
Nowhere is this more clear than the concurrent antitrust cases Kanter’s DOJ is prosecuting against American tech giants Google and Apple. Recently, DOJ prosecutors were supposedly scandalized to discover during their trial against Google that the company pays Apple roughly $20 billion annually to remain the default search engine on Apple’s Safari browser. While Apple is not a defendant in this particular case, this deal is a large part of Kanter’s case against Google. Punishing Google for taking advantage of a deal offered by Apple, that other firms were free to bid for, remains a head-scratcher without a clear remedy.
Google is already trying to take steps to avoid remaining under the DOJ’s white hot regulatory spotlight. According to one source, that involves “encouraging users to switch to the Google or Chrome apps for their search needs.” The thought is that if Google reduces what the DOJ calls “reliance” on Apple by re-directing consumers to its own applications, there is no longer need for crushing enforcement actions.
Yet, concern over Google’s default status in Safari ignores that the privilege for which Google is paying Apple can be undone by consumers in roughly thirty seconds. Any iPhone user can go into their Settings app and change their default search engine in Safari from Google to any one of six options. There is no unreasonable barrier or exclusionary conduct. Someone has to be the default. However, it is very straightforward to use a competitor if need be. If Google places the market value of being the first at $20 billion per year, that’s their business.
Nonetheless, the fate that lies ahead even if Google is able to successfully decouple from Safari is no less daunting. Such re-direction to its own applications would also land Google in the antitrust crosshairs. In remarksgiven in March of last year, Kanter decries this act of self-preferencing. He said, “Exclusionary practices by a firm with monopoly power can be so much more pernicious. Dominant firms facing an antitrust investigation regularly label their conduct as mere ‘self-preferencing.’”
In other words, while Google might be working to decouple from Apple because of antitrust concerns, they now run the risk of being “exclusionary monopolists” because of their promotion of their own applications. It seems any effort to drive consumers to Google products on smart phones is presumptively anticompetitive according to the DOJ. With this landscape, it will be difficult for any tech company – large or otherwise – to feel comfortable promoting their own products.
None of this is hypothetical. One need only to look at the antitrust case DOJ is prosecuting against Apple to see this. One of Kanter’s main complaints in the Apple case is as follows:
“At launch, nearly all native apps for the iPhone were created by Apple. There were only about a dozen apps overall, including Calendar, Camera, Clock, Contacts, iPod, Messages, Notes, Phone, Photos, Safari, Stocks, Voice Memos, and Weather.”
Apple is in trouble for defaulting to its own apps. Google is in trouble for paying to have its service outside of its own browser app. It’s clear to see that the logic is circular, and no matter which way tech firms turn, the eye of the DOJ is there.
All of this is made even more ridiculous by claims that both Google and Apple are “monopolists” despite both being sued simultaneously for anticompetitive conduct in the same space. It would be laughable were it not being done with millions upon millions of taxpayer dollars.
The only common thread in this twisted web of antitrust “principles” and litigation is that the federal government will attack any American company it deems too large. This is regardless of whether consumers have been harmed or if there is a reasonable way to avoid such scrutiny. This saga of two mega-lawsuits running side-by-side ought to show just how devoid of logic the recent antitrust crusade is.
