The U.S. government’s antitrust argument against Google is highly reminiscent of the landmark lawsuit it brought against Microsoft, Columbia University law professor Timothy Wu told CNBC.
The Department of Justice sued Google on Tuesday for what it claims are unlawful practices that allowed Google to amass monopoly power in online search. The DOJ alleges Google has cut off competitors from key distribution channels to retain its dominance.
“The challenge I think for this suit is even though I think they chose their best lawsuit, it’s almost an exact copy of the Microsoft case they won in the ’90s,” said Wu, who is credited with coining the term “net neutrality.” He has taught at Columbia Law School since 2006 and has worked at the Federal Trade Commission, including when it conducted a probe of Google that resulted in no charges in 2013.
Microsoft settled its yearslong case with the Justice Department in 2001, after the tech giant appealed a judge’s ruling that the company broke antitrust laws by bundling Internet Explorer with Windows.
In an interview on “Squawk Alley,” Wu said he believes the fundamental aspect of the DOJ’s claims against Google are “relatively strong” and “not that hard to understand.”
“It’s basically that [Google] … put concrete over any possible way to challenge them. That’s their lawsuit, which is exactly what Microsoft did,” said Wu, who in 2018 published a book titled, “The Curse of Bigness: Antitrust in the New Gilded Age.”
Wu said the difference between the two antirust actions is Microsoft had a more clear victim in Netscape Navigator than Google does. “I guess victim here is Bing, and Bing is not the most sympathetic victim. I have to admit,” he said, referencing the Microsoft’s own search engine offering.
In its lawsuit, the Justice Department contends that “Google’s grip over distribution also thwarts potential innovation.” The DOJ also references the Microsoft case, claiming Google is using similar practices to what the D.C. Circuit court considered anticompetitive almost two decades ago.
Google called the Justice Department’s lawsuit “deeply flawed.” In a blog post Chief Legal Officer Kent Walker said that people choose to use Google because they want to, “not because they’re forced to, or because they can’t find alternatives.” Walker also contends the lawsuit hurts consumers in a way that ultimately would render it “harder for people to get the search services they want to use.”
Wu said diminishing the quality of Google’s search service to the detriment of users is a big concern, one that was top of mind when the FTC investigated the company years ago. “You don’t want to break the product,” he said.
“The Justice Department’s suit is trying to open up some of the channels where someone could compete with Google in search. That’s their big idea,” he added. He also said he believes it is unlikely the case would end with Google having to be broken up from its parent company, Alphabet.
In the seven years since the FTC closed its investigation of Google, Wu said the public attitude toward large technology companies has shifted and resulted in more concerns over data privacy. However, he said antitrust law in the country has not kept pace with the complexities of modern-day technology companies, since potential harm to consumers is not always evident in higher prices when services are offered for free.
“It shows that really maybe the antitrust law, other than Microsoft, doesn’t have a lot bullets in the gun,” he added. “The kinds of concerns the public have have to do with data and privacy, and things like if you think about Facebook, some of the buying of competitors. Some of that newer-age control over those kind of markets … it’s not clear if the antitrust law is quite up to it for those.”
