By Jon Swartz
A possible timeline
Google is likely to face charges as early as this month under the aggressive directive of U.S. Attorney General William Barr, according to a person familiar with the investigation and at least two recent reports.
The Justice Department and a group of state attorneys general may file antitrust lawsuits focusing broadly on how Google leverages its dominant search business to stifle competition, according to a Wall Street Journal report. At the same time, the Justice Department and state attorneys general are also investigating the pricing and operations of Google’s Network division, a business that sells services that handle almost every step a digital ad takes, said a Bloomberg report .
Of course, the political calculus of such moves during a presidential election year could complicate matters, says V.C. Chandra. “I’m growing skeptical that we will see anything definitive regarding an antitrust action before the election,” he said. “The administration, despite its feelings about monopolization, needs a strong economy. A concrete action against Big Tech could drive down their stock and blunt market momentum that has been aided by tech companies.”
Facebook is even more immune to imminent government activity between now and Nov. 3 because it is a “political hot potato” for both a get-out-the-vote push on its properties at the same time conservative groups and pages thrive on Facebook’s digital platform, Chandra said. (In the same interview with Axios, Zuckerberg refuted a narrative that Facebook is an echo chamber for right-wing views.)
Despite the relatively civil relationship between Zuckerberg and President Donald Trump, it might only take a mild disciplinary action by Facebook over Trump’s profile feed to raise his ire and prompt regulatory punishment, Chandra added. Last week, the company said it would ban new political ads in the week preceding Nov. 3.
Gaming the system
An already epic battle brewing in antitrust against Big Tech became downright Epic when the eponymous videogame maker sued Apple and Google in August. This has led to a pile-on of Apple by companies like Microsoft, Spotify Technology Inc. /zigman2/quotes/207488629/composite SPOT -0.22% and Facebook over its App Store policies. Last week, Epic filed a preliminary injunction against Apple in its latest attempt to bring “Fortnite” back to Apple devices.
“Many companies have huge components of their business reliant on mobile apps and the supporting toolsets,” Adam Landis, CEO of mobile-analytics company AdLibertas Inc., told MarketWatch. “Apple trying to block a major toolset should set anyone reliant on mobile apps on edge. Imagine waking up to find business operations halted — or your apps no longer functional. I wouldn’t be surprised if Facebook intends to lob a lawsuit of their own against Apple.”
Apple countersued Epic on Tuesday, seeking punitive damages. The case’s next hearing is Sept. 28.
Google, too, has been a lightning rod of criticism from longtime rivals.
Days after the congressional hearing in late July, Tripadvisor Inc. /zigman2/quotes/206118480/composite TRIP +0.55% CEO Steve Kaufer called for further investigation into Google’s search-ranking practices to rein in its “deceptive efforts to [keep] users on Google’s sites even if Google doesn’t have the most relevant information.”
Luther Lowe, senior vice president of public policy at Yelp Inc. /zigman2/quotes/201334325/composite YELP +3.05% , told MarketWatch he was “pleasantly surprised” to see House members grill Google for allegedly stealing content from developers, such as restaurant reviews from Yelp.
Read more: ‘Fortnite’s’ impact could be Epic on antitrust investigations of Big Tech
Why not Microsoft?
Through all the infighting and accusatory claims, Microsoft has been notably excluded from antitrust talk — which is surprising given its long and tortured history with federal antitrust investigations. During the Microsoft investigation more than 20 years ago, the government dropped the effort to break up the tech giant before eventually settling the case with a consent decree.
For more: Big Tech was built by the same type of antitrust actions that could now tear it down
By the time the government reached a settlement with Microsoft, however, many years had passed and the tech market had seen the emergence of new markets for mobile and cloud, as well as the transformation of Microsoft into a cloud and gaming behemoth.
Ultimately, federal authorities were successful in changing Microsoft’s behavior toward competitors, prompting it to soften its ruthless ways and indirectly fomenting competition in the emerging fields of search, social media and e-commerce. The man leading the push acknowledged that historical record in a speech in June 2019.
“The government’s successful antitrust case against Microsoft arguably paved the way for companies like Google, Yahoo, and Apple to enter the market with their own desktop and mobile products,” said Makan Delrahim, the Justice Department’s antitrust chief, told MarketWatch in an interview late last year.
Which brings us to today, and Microsoft’s unique standing. The company last week was awarded a 10-year, $10 billion cloud-computing contract by the Defense Department over Amazon, and it is a favorite to acquire video-sharing service TikTok.
Those developments have left many in tech wondering if Microsoft, as well as Facebook and Oracle Corp. /zigman2/quotes/202180826/composite ORCL -3.31% , have been favored by the Trump White House while Amazon and Google are punished for political reasons. (Amazon CEO Jeff Bezos owns the Washington Post, a fierce critic of the president, while Google has largely ignored entreaties from lawmakers to testify until recently.)
Antitrust lawyer Paul Swanson points out Microsoft does not run “big-time marketplaces for apps (like Apple and Google, for example) or for advertising (such as Google, Facebook, and Amazon) or for goods (like Amazon).”
What makes the Big Four so interesting, he says, is they don’t just have market power in the markets where they compete — they created and control the forum for competition, and then (at least for Amazon and Google) they compete within those competitive spaces that they operate and control.
“It’s a little like Microsoft in the ‘90s, which controlled the forum (Windows) for competition among third-party software developers (Novell, Netscape) and used its control over the forum to favor itself in competition with those developers (WordPerfect, Explorer v. Navigator),” Swanson said.
“After taking on a lot of water in antitrust litigation back then, Microsoft seems to have charted a more careful course,” he said.
A lone voice of dissent toward Microsoft, aside from Amazon over the government contract, is Slack Technologies Inc. It filed a competition complaint in Europe in July.