Politics

The DOJ went narrow on Google. That may be good news for the rest of Big Tech.

The antitrust complaint focuses on facts specific to the search giant. But there are warning signs for Facebook, Amazon and Apple, too.

The DOJ went narrow on Google. That may be good news for the rest of Big Tech.

Despite all the bluster, the DOJ's legal argument is narrow and fact-based, focused not on Google's size but primarily on the contracts it has with other companies.

Photo: Alex Tai/SOPA Images/LightRocket via Getty Images

In the opening paragraphs of Tuesday's antitrust complaint, the Justice Department suggests that the problem with Google is … pretty much everything. The "scrappy startup" has become not just "a monopoly gatekeeper for the internet," but an "empire" that's too big, too rich and too much in control of everything related to search.

But that's not what the DOJ is suing over. Despite all the bluster — "Google is so dominant that 'Google' is not only a noun to identify the company and the Google search engine but also a verb that means to search the internet" — the DOJ's legal argument is narrow and fact-based, focused not on Google's size but primarily on the contracts it has with other companies.

That should be a relief to the other big tech companies. Instead of making legal arguments that could apply with equal force to any of them, the DOJ's case takes aim at a set of facts that are unique to Google.

"It's factual and narrow, and that may limit its scope," said Gary Reback, a veteran Silicon Valley lawyer who has been credited with getting the government to bring a case against Microsoft in the 1990s.

Before the Google case landed, industry watchers had speculated that the case would include some discussion of self-preferencing, or the allegation that Google prioritizes its own products in search results. But the DOJ didn't go there, instead homing in on Google's agreements that require mobile phone manufacturers like Apple to keep Google as their default search engine.

A discussion of "self-preferencing" might have left Amazon vulnerable, as critics have long accused Amazon of prioritizing its own private-label products. And a broader indictment of Google's practice of buying market dominance could also spell trouble for Facebook, which deals with its competitors in a similarly spendy way. Facebook could have come off even worse, given the email evidence that Mark Zuckerberg wanted to buy up competitors to kill competition.

And — big talk at the beginning notwithstanding — the complaint specifically avoids concluding that the sheer size and success of Google is a cause for legal concern. That might be too much for pro-business Republicans to swallow.

The big tech companies are certainly not out of the woods. One worry: the way the DOJ defines the relevant market.

Google has argued that it's got plenty of competition because Expedia offers search results in travel and Amazon offers search results in retail. Similarly, Amazon has argued that it's in competition with every brick-and-mortar store in the world, and Apple has resisted the argument that its App Store is a market unto itself.

With Google, the DOJ has taken a much narrower view of the relevant market, defining it as "general search"; think less Amazon and Expedia, more DuckDuckGo. Similarly narrow definitions could spell trouble for the other big tech firms.

"This confirms what [the tech companies] suspected, which is that government agencies are not going to accept their universe-and-all-it-contains market definitions," said former FTC Chairman William Kovacic.

There's one other big worry for Google's big tech brethren: the line where the DOJ says, "When a consumer uses Google, the consumer provides personal information and attention in exchange for search results. Google then monetizes the consumer's information and attention by selling ads."

For years, some experts have argued that digital platforms can't violate antitrust laws because they offer their services for free. The DOJ has now taken the view that companies like Google and Facebook don't really offer their services for free because they monetize users data with ads.

"This confirms that the government is looking at these issues not in the way the tech companies would like," Kovacic said.

Fintech

The crypto crash's violence shocked Circle's CEO

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Allaire said what really caught him by surprise was “how fast the death spiral happened and how violent of a value destruction it was.”

Photo: Heidi Gutman/CNBC/NBCU Photo Bank/NBCUniversal via Getty Images

Circle CEO Jeremy Allaire said he saw the UST meltdown coming about six months ago, long before the stablecoin crash rocked the crypto world.

“This was a house of cards,” he told Protocol. “It was very clear that it was unsustainable and that there would be a very high risk of a death spiral.”

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Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.

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