Google vs. DOJ: Breaking down federal prosecutors’ antitrust claims
The Justice Department’s antitrust lawsuit against Google (GOOG, GOOGL) — accusing the tech giant of unfairly gaining market dominance through its forceful search engine contracts — has entered its second week. Yahoo Finance legal reporter Alexis Keenan joins the live show to analyze the arguments presented by attorneys on both sides, the similarities shared between past technology lawsuits, and ultimately to assess what a potential outcome of the case would look like. The ongoing case has been compared to AT&T’s (T) lawsuit against Google several years ago and the DOJ’s antitrust case against Microsoft (MSFT) in 2001.
video transcript
– Well, we’re in the second week of the trial in what is being called one of the largest antitrust cases ever. That’s “The United States vs. Google.” The tech giant is being accused of gaining market dominance through a series of forced contracts, making it the default search engine on millions of devices. The company says it is being punished for its success.
In these early stages, it is difficult to predict which side will prevail. However, one way to read the tea leaves is to look through the pages of history in a case that is often described as the largest antitrust case of all time. There’s more Alexis Keenan here. You are talking to some unbelieving veterans. How do they view the Google case?
Alexis Keenan: Yes. So I’ve been talking to lawyers on both sides of that AT&T case. It ended with a settlement that broke up the telecom giant. And one of them is Philippe Verveer. And at the time, he was a 30-year-old Justice Department lawyer. And he’s the one who drafted this case and ultimately brought it, led it against AT&T.
Now, he says this case and the case brought against Microsoft by the Justice Department are similar. And they’re instructive about how this case might proceed because they’re all vertical criminal cases. And what that is, it’s an attack on companies that have used vertical integration of companies, of services, to stifle competition.
Now, in AT&T’s case, of course, that was local and long distance service as well as phone equipment. In Microsoft’s case, they owned Internet Explorer, the browser they included with Windows. But it’s still a tough win for the DOJ here in antitrust because since that time, since the AT&T case, the interpretation of the law has really narrowed. And so, Verveer said, the environment here is really different. And that will present a challenge to the DOJ.
On the other side of the aisle, I also talked to another attorney, Carl Hittinger. And he was representing AT&T at the time. He said, look, if antitrust violations are found, that’s fine, but the knee-jerk reaction should not be to go and break up and solve the problem like what happened with AT&T. He said that judges, lawyers, and the public should be aware that a logical solution to any problem can be found through this test.
– And Alexis, let me ask you a quick question. I mean, it is– listen, this is a matter, Street, investors are paying very close attention to. Alexis, what’s the deadline here for investors?
Alexis Keenan: Yes. Therefore this trial is going to last for nine weeks. I’ve heard anything from 7 to 10 weeks. This positions us well a few months from now. Furthermore, we don’t know how long it will take for the judge to make a decision. This is a bench trial. This will not be decided by a jury. But it is not necessary that it should run fast or slow. Then on top of that, you have to consider that the case will be appealed if Google loses.
So it may run well till 2024. And then on top of that, you have a separate DOJ case that will go on in the Eastern District of Virginia. And he is yet to be tried. That’s a jury trial. So, I would say investors have a lot to look forward to in the year ahead. And so far, it’s not really visible in the numbers and the way the stock is trading, but I think as we get closer to this judge’s hearing, we might start to see some action there. .
Source: finance.yahoo.com