Tech

US takes step toward a bruising antitrust battle with Google

WASHINGTON — The U.S. Justice Department has taken the initial steps toward an antitrust investigation of Google, a clear signal that two years of a bipartisan anti-Silicon Valley backlash in Washington may be yielding concrete action.

But such a case, if it comes to pass, would represent a major challenge for the federal governments antitrust enforcers, whose last victory against a massive corporate giant was the breakup of AT&Ts former telephone monopoly in 1984. President Donald Trumps DOJ failed in its first big antitrust test in February, when courts rejected its attempt to block to the merger of AT&T and Time Warner.

Even so, DOJ officials have begun laying the groundwork for an antitrust probe of Googles search practices, having wrested jurisdiction over the issue away from the Federal Trade Commission, two people close to the situation confirmed to POLITICO late Friday. The Wall Street Journal first reported the development.

The departments move intensifies the already considerable political pressure on Google at a time when lawmakers, regulators and government leaders in Washington, Brussels and beyond are turning a critical eye on the once-favored U.S. tech industry over everything from its mishandling of user data to its role in the subversion of democratic elections. And the action quickly got bipartisan cover with a statement of praise from Senator Elizabeth Warren (D-Mass.), a presidential candidate who called earlier this year for breaking up Google, Facebook and Amazon.

“Ive been talking for years about how Google is locking out competition,” Warren said Friday night, adding that it and its fellow online giants “have too much power and theyre using that power to hurt small businesses, stifle innovation, and tilt the playing field against everyone else. Its time to fight back.”

Google dominates the markets for online advertising and search, and has major footholds in email, streaming media, photos, e-books, television, car navigation and even its own branded smartphones. Its parent company, Alphabet, has also ventured into fields like drones and self-driving cars.

A move against Google would be in keeping with the agenda of DOJ antitrust chief Makan Delrahim, a Trump nominee who has been talking up the idea of subjecting internet firms to closer examination. In a speech last year, he said that “if there is clear evidence of harm to competition in digital platforms, enforcers must take vigorous action and seek remedies that protect American consumers.”

Representatives for the DOJ, the FTC and Google declined to comment.

The decision to hand a possible antitrust probe to the Justice Department instead of the FTC is bad news for Google, which survived a previous FTC inquiry that ended in 2013 with no serious repercussions for the company. But its far from clear that even the DOJ has the antitrust tools to rein in a sprawling internet giant like Google, after decades of an increasingly pro-business atmosphere in Washington that has heightened the difficulties of winning big antitrust cases.

Trumps Justice Department suffered a major loss in its first attempt at aggressive antitrust action, when it tried to argue that AT&Ts acquisition of Time Warner would cause higher prices and reduced choice for media consumers. And legal experts have cautioned that todays online behemoths pose even bigger challenges for antitrust enforcers than age-old corporate giants such as Standard Oil.

For one thing, courts have become more conservative since the 1970s when it comes to antitrust doctrine, requiring the government to prove that anti-competitive behavior has a real economic impact on businesses or consumers. DOJ failed to meet that standard in the 1990s when it tried to separate Microsofts operating system and browser products, a case that Microsoft won on appeal.

And even successful antitrust cases can be lengthy and expensive. It took a decade for the Justice Department to break up AT&Ts old Bell System in 1984, and another decade for the government to wage its unsuccessful fight against Microsoft. The Bell telephone case began under PresidenRead More – Source

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