Ex-DOJ and FTC Officials: Google Breakup Is Unlikely

DOJ will push to end Google’s distribution agreements with companies like Apple, but a structural breakup isn’t likely to gain traction in the department’s antitrust lawsuit against the search giant, former DOJ and FTC officials said Tuesday (see 2410090035, 2410100036 and 2410160035).

In August, U.S. District Court for the District of Columbia Judge Amit Mehta ruled that Google has monopoly power over general search services (docket 1:20-cv-03010-APM). Google’s distribution agreements, Mehta ruled, are an anticompetitive tactic. The schedule has DOJ filing a revised remedy proposal in November and a final version in March.

Former agency economists predicted during a Technology Policy Institute livestream that DOJ has a realistic chance of ending distribution agreements that allow Google to self-preference its platform and products. University of Maryland economics professor Ginger Zhe Jin, who served as FTC Economics Bureau director in 2016-17, agreed with Lawrence White, DOJ’s Antitrust Division Economic Policy Office director in 1982-83, on this point. White, now a New York University economics professor, said DOJ will “shoot for the moon” on potential remedies, as it did in its initial draft framework, but the court will likely whittle it to more realistic options. White predicted final remedies will include an end to the distribution agreements, better consumer choice for search options on Android devices and a one-time disclosure of Google’s Search database to improve competition. Randal Picker, a University of Chicago law professor, agreed on those three points.

However, structural remedies for Google’s Android and Chrome businesses wouldn’t “exactly” target the “disease,” said Jin, noting the key element of the case is the distribution agreement with Apple. “I just don’t see a very clear connection of how ownership of Android, Chrome or Google Play Store has a direct causal impact” on consumer welfare.

Requiring divestiture of Chrome or Android isn’t an “outrageous idea,” as a similar remedy was initially considered in DOJ’s antitrust case against Microsoft in the 1990s, said White. Indeed, it could result in a new, independent company providing Google with search market competition, he said. However, he doesn’t endorse the idea because even after decades of analysis, enforcers don’t fully understand the economic efficiencies of these “complementary” business arrangements within the tech industry. Forcing divestiture is “not what I would do,” he said.

Picker said the Google case is unlike the 1982 antitrust case against AT&T, which resulted in the Bell System's breakup. The AT&T case was driven by “AT&T proper’s desire” to enter the computer market and necessary structural changes for regional Bell operating companies. “So there was a conceptual clarity to what was going on there,” said Picker. “I’m not sure that maps here particularly well.”

Picker said Mehta “seems like a smart, reasonable" person based on the ruling. The judge will likely agree to a proposal “along the lines” of what White predicted, he said: But if DOJ wants to set a stronger precedent, it must “go bigger” with the department’s final remedy proposal. “The question is: Do they want the precedent, or do they want the chance for more immediate, rapid progress in this market?” said Picker: If DOJ wants a more immediate impact, it should consider the options White laid out.